For condo disputes, litigation is the last resort, ADR is used before court.
The housing market is rebounding with June numbers showing strength across the nation and locally. In the townhouse, condominium and adult community markets, more deals are closing and inventories are shrinking.
Many of these buyers will be moving, for the first time, into homes governed by the “Condominium Act”. Realtors field lots of questions about the unique aspects of living in a “condo”. What may come as a surprise is that there are 38 sections to that statute, many of which make it very different from single home ownership. One topic that doesn’t get much notice is dispute resolution.
The Condominium Act mandates that all unit owners who have a dispute with their Association, as well as those with a dispute with another unit owner, must be permitted to take advantage of an alternative dispute resolution (ADR) process. This provision is designed to save money, time and aggravation for all parties and preserve the community’s cohesiveness. We agree with Judge Sylvia Pressler, who said,
“Litigation ought to be a last resort, not a first one. It is expensive, it is burdensome, and when it involves a claim against a unit owner, it may well be counter-productive to the harmony and commonality required for successful community living.”
This observation was made in a lawsuit arising from a “mutual misunderstanding” between a condominium unit owner and a condominium association “about the installation of an HVAC system”. That case included an attempt by the Association to foreclose on the property based upon $661 lien. The matter took eight years and cost thousands of dollars in legal expenses to resolve. In the end, neither party “won”.
In another case born from an argument about the nature and scope of repairs to certain common elements, the Court reminded us of this common sense approach and further emphasized this State’s strong public policy in favor of arbitration, while highlighting a portion of The Condominium Association Act:
“An association [must] provide a fair and efficient procedure of the resolution of housing-related disputes between individual unit owners and the association, and between unit owners, which shall be readily available as an alternative to litigation.”
Focusing on the “broad and unconditional language chosen by the Legislature” the Court determined that everything that arises from the condominium relationship is subject to this edict.
So what does this all mean to condominium owners and Association Boards?
It means all condominium associations in New Jersey are required to establish a fair and efficient procedure for the resolution of “any…dispute…that arise[s] directly from the parties condominium relationship”, as an alternative to litigation. This includes disputes between the association and unit owners and disputes between unit owners.
It means unit owners should check to be sure their association is compliant with the law.
It means unit owners should be sure that their association is using litigation as a last resort, not a first one.
It means that associations should contact Posternock Apell, PC to learn more about how easy we are to work with and our cost-effective and efficient mediation and arbitration services.
At Posternock Apell, PC, we believe every effort should be made to solve problems before resorting to litigation. Although we know that certain disputes will require reliance upon our experienced trial attorneys, we remain steadfast in support of a more practical common sense approach to conflict resolution. Try us. You might find the path to a solution is faster and less expensive than more traditional means.