In a matter recently decided in the Chancery Division, Morris County, John Abromitis, Esq. defeated an owner's attempt to sever itself from a community association. The Court denied the owner's request, and also upheld the method of assessment for maintenance fees.
The matter involved a community comprised of varying forms of ownership, including single-family residences, multi-unit apartment-style buildings, and vacant lots. The matter began as a garden variety collection action against the owner of an 8-unit apartment-style building, which was instituted by John Abromitis, Esq. on behalf of the association. The building owner was assessed as eight units, in accordance with the eight dwelling units/residences contained within the building. The owner filed a counterclaim, asking the Court to permit the property to be “severed” from the community, arguing, in part, that the property was located on the outskirts of the community, and that the owner and/or the tenants did not use the common elements. With regard to the manner and method of assessment, the owner contended that the building should be treated as one unit for purposes of assessments, and not eight, despite the fact that the building had the potential of housing eight families.
The Court rejected the owner's request to be severed from the community, citing various principles of law pertinent to community associations. Case law in New Jersey indicates that an owner cannot avoid the responsibility to pay maintenance fees by “waiving” the right to use the common elements. As to the method of assessment, the Court applied the “Business Judgment Rule” to analyze the association's manner and method of assessment. The Rule essentially indicates that the decision of a board as to the manner and method of assessment will be upheld, so long as the manner/method is not the product of fraud, self-dealing, or is otherwise not unconscionable. The Court recognized that association boards have discretion with regard to the manner and method of assessment, and upheld the association's determination to assess the property as eight units. Mr. Abromitis successfully argued that it would be unfair for the building owner to only be assessed as one unit, due to the fact that the building in question had the potential of housing eight families, and therefore the potential of eight times the number of people using the common elements as a single-family residence.
In addition to dismissing the owner's counterclaim and granting the association's Motion for Summary Judgment, the Court also awarded counsel fees and costs to the association, in accordance with the association's governing documents and case law, which provide for same.