ASSEMBLY HOUSING COMMITTEE
STATEMENT TO
ASSEMBLY, No. 465
with committee amendments
STATE OF NEW JERSEY
DATED: FEBRUARY 5, 1996
The Assembly Housing Committee reports favorably Assembly Bill No. 465, with committee amendments.
As amended, this bill provides statutory authority for provisions found in condominium association master deeds and bylaws that allow for the imposition of reasonable fines on unit owners who fail to comply with the master deed, bylaws, or rules and regulations of the condominium. The bill also specifically indicates that condominium associations may include provisions in their master deeds or by-laws for the imposition of late fees upon unit owners who fail to pay monies duly owed the association after proper notice. Furthermore, the bill provides that by-laws may provide for rules including the imposition of fines and late fees which may be enforced as a lien pursuant to section 21 of P.L.1969, c.257 (C.46:8B-21). However, an association will not be permitted under the bill to file a lien consisting solely of late fees. The bill specifically validates bylaw provisions that provided for the imposition of reasonable fines and late fees that were adopted prior to the bill's effective date so long as those provisions are not inconsistent with the provisions of the bill and the bill also validates fines levied pursuant to such bylaw provisions.
This bill is in response to the decision rendered in Walker v. Briarwood Condo Ass'n., 274 N.J. Super. 422 (App. Div. 1994) which held that the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.) does not empower condominium associations to enforce their rules and regulations by imposing fines or enforcing fines imposed on unit owners by the placement of liens on units. In Holbert v. Great Gorge Village, 281 N.J. Super. 222 (Ch. Div. 1994), the court followed the decision in Walker by finding that a condominium association exceeded statutory authority by charging a unit owner late fees.
The bill circumscribes the discretion of condominium associations that wish to provide for the imposition of fines in their governing documents by setting forth the following guidelines:
A fine may not be imposed unless the unit owner is given written notice of the action taken and of the alleged basis for the action, and is advised of the right to participate in a dispute resolution procedure in accordance with subsection (k) of section 14 of P.L.1969, c.257 (C.46:8B-14). A unit owner who does not believe that the dispute resolution procedure has satisfactorily resolved the matter shall not be prevented from seeking a judicial remedy in a court of competent jurisdiction.
In order to forestall future court decisions from holding that actions of condominium associations exceed statutory authority, the bill provides associations with such other powers as may be set forth in the master deed or bylaws, if not prohibited by the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.), or any other law of this State.
The committee amended the bill to provide that, although the bill validates bylaw provisions that permitted fines to be levied prior to the enactment of the bill into law, the bill will not affect any case in which a judicial determination relative to the legality of such a fine has been rendered prior to the effective date.
Assembly Bill No. 465 was pre-filed for introduction in the 1996-1997 legislative session pending technical review. As reported by the committee, the bill contains changes required by technical review which has been performed.