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Recent cases of HOA injustice

Fair Lawn, NJ
In the historic planned community of Radburn, one of the oldest planned real estate developments (PREDs) in the United States, only current and former trustees are considered “members” of the Radburn Association, which governs the community and maintains its common properties. There are currently no more than 40 homeowners out of approximately 1,300 total with “member” status, leaving 97% of Radburn homeowners disenfranchised. The association’s nine-member board of trustees, controlled by a small group of insiders, has sole power to nominate candidates to run in elections. The Radburn Association systematically locks out anyone from the community who may have an opposing view of how things should be run. This has led to much abuse, including the secret sale of recreational property to a high-density developer and discrepancies of up to 300% between the expenditures reported to residents during a “budget meeting” at the beginning of December each year, and the amounts filed with the IRS for the annual period ending three weeks later. The Radburn Association claimed it was not a homeowners' association and refused to grant any rights to homeowners, including financial disclosure. Responding to a complaint brought by a number of Radburn residents, Superior and Appellate courts in New Jersey have ruled that Radburn is a Planned Real Estate Development (PRED and that its homeowners are entitled to financial disclosure, open meetings where binding votes are taken and alternative dispute resolution.  However, the courts also ruled that the NJ Planned Real Estate Development Full Disclosure A ct’s 1993 amendments do not provide membership for all homeowners because they not explicitly equate “member” with “unit owner. This ruling now provides NJ homeowner associations to limit membership to a select group of homeowners.  We do not know of any other state in the country that does not provided membership to ALL homeowners.   The courts suggested that residents go to the New Jersey legislature for clarification. Assembly Bill A469 would remedy the situation, providing membership to all homeowners, but was stuck in committee for months and remains on a slow track through the legislature. The Radburn Association still does not provide financial disclosure, ADR and refuses to take binding votes at open meetings.

Lawrenceville, NJ
Water seepage into the walls of a unit led to the growth of mold. The owner contacted the associations management company, which refused to investigate or correct the problem. An inspection by a town official indicated that water was leaking into the walls from the roof, gutter, and down spouts. Although this problem has existed for two years, the management company refused to file an insurance claim. After the owner contacted NJDOH, an expert was hired to inspect the water seepage and mold problem. The management company billed the owner for the experts inspection. Having exhausted all other remedies, the owner is seeking legal advice.

Bedminster, NJ
The recent election was improperly conducted. Election ballots were not sealed and many ballots were crossed out and scribbled over. The bylaws were violated in the election proceedings. The property manager and HOA attorney conducted the election. A letter was written to the HOA attorney suggesting the election be declared null and void. The attorney's response was to take it to the Superior court or mediate."

Gutenburg, NJ
The Board of this association hired an outside election coordinator to supervise the annual Board election. The election coordinator did not show up on the day of the election. Explanations offered included locking keys in the car, heavy traffic, and a breakdown of communication between the election coordinator and the head of the election committee. The election was postponed for two weeks but instructions about voting procedures for the rescheduled election did not arrive until the day before the election, depriving some owners of the opportunity to vote. The voting register was not accurate and some owners had difficulty establishing their right to vote. Errors were made in checking off the names of owners who had voted by mail prior to the election. Some owners who voted by mail were not checked off on the list, while others who had not voted were received by the election coordinator a day before the election, the ballots were not date-stamped.

Ortley Beach, NJ
At this HOA the president appointed his neighbor and wife to the board. The president harasses people until they move. He wants all owners as residents, no rentals. By-laws are violated or ignored. Fines are assessed indiscriminately and liens are placed without proper legal procedures. Impartial ADR is denied. A special meeting requested by owners was denied. All issues must be in writing prior to a meeting and then the president invalidates the request or complaint. The 2004 annual election was denied by the president. His rationale is nobody wants my job."

Florence, NJ
The Board did not pay this association’s bills in a timely manner. Several years ago, the association fell far behind in payments to the local utility company, which threatened to shut off all gas and electricity service. The Board voted for a special assessment to pay the bill, but defaulted on the payment plan. Two years later, the association owed more than $1 million in unpaid bills. The Board declared bankruptcy and thousands of dollars in a special assessment was levied against each owner. A number of homeowners established a task force and hired an attorney. They went to court in order to force the board to disclose financial information. It took a court order to force the board to hold a new election.

Somerset, NJ
The Board is suing a homeowner over a storm door claiming it is not in compliance with the architectural standards. The owner has proven it was “grandfathered” by others exactly like it. A meeting with the Covenants Committee was not granted to discuss the issue. An ADR procedure is not in place which is out of compliance with NJ law. The board allows the attorney for the HOA to make all their decisions.

Fort Lee, NJ
The hot water heating pipes burst in the walls. The board is telling owners a new system is needed which will cost $3.3 million. Owners believe there is a cheaper, more efficient way to repair the system. Owners attended a special meeting with 95 present that met the requirement of 83 percent for a quorum to oppose the special assessment. Owners visited the legislators in their district and were advised to hire lawyers. The lawyers contacted quoted an average fee of $25,000 to start. The fee would be paid by individual owners who would want to fight the board over the decision to spend $3.3 million. All owners also pay condominium fees that pay for the Board’s attorney, thus paying for their attorney and the Board’s attorney.

Manchester, NJ
In this senior community, the purchase of a unit entitled owners to receive free bus transportation for essential shopping, banking, and travel to and from doctor and dentist appointments. The Board reduced bus service to one trip daily and cut back on night time security services. Although the Board said the service reductions were made to reduce costs, plans for refurbishing the swimming pool, and the community room are in the works. The rules of the community were amended recently to require owners to show respect for Board members at all times. The Board recently urged owners to petition against bill S-2016 and is sponsoring a meeting at which owners will be presented with a petition to sign. The Board president is not allowing other homeowners to post a petition in support of S-2016.

Toms River, NJ
In 1994, the board was involved in a lawsuit because a member of the board visited shareholders at their homes in an effort to get them to sign absentee ballots. The board settled and the judge ordered another election. Cost: $26,000.

In 1995, the board illegally appointed a trustee to join the board and was sued by a shareholder. The board gave up and settled and the person was removed from the board. Several days later the board sent out revised bylaws, changed the rules for electing trustees, claimed that everyone approved it, and reinstated the person back on the board. Cost: $20,000.

In 1999, five members of the board illegally removed a shareholder from the board because they did not like the fact that financial information was requested regarding bus trips and other functions wherein tickets were being sold. The board did not allow the requester to continue the line-dancing classes (non-paid volunteer). A lawsuit began that lasted 18 months. The board finally gave up before trial and the requester was reinstated. Cost: $43,000.

In 2003, a member of the board who was also involved in the 1999 case was voted back on the board and brought a suit to eliminate the line dancing class. The judge refused to change the terms of the settlement and dismissed the case. Cost: $8,000.

C-IHC would like to hear your story. Call 732/873-3446  from 9am to 9pm ET or email us at jazln17@hotmail.com.

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