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The New Jersey Condo Blog

NO BANK ACCOUNT, NO EMPLOYMENT, NO PROBLEM

02/07/2017 Angela Morisco
 
Once a judgment for condominium arrears is entered and various post judgment enforcement remedies have proved unavailing to locate assets, i.e. there are no bank accounts in the debtor’s name and no employment information can be located, there is one more tool in the toolbox!

New Jersey Court Rule 4:59 - 1 (d) (1) permits a judgment creditor to file a motion for an order to sell real property where the judgment debtor's assets are insufficient or cannot be located. The Appellate Division recently reversed an order denying such relief where the lower court held that notice to the mortgagee was a prerequisite. The relevant consideration under the rule is whether the judgment creditor made reasonable efforts to locate personal property. If you have an unsatisfied judgment, this remedy may be available as an alternative to a lien foreclosure. This strategy has been effective to bring delinquent condominium owners to the table when no bank accounts or employment can be located.

Submitted by :  Angela M. Morisco, Esq.

01/12/2017 Martin Cabalar
Q&A: Disclosure of Tenant Information


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Q:        Does a condominium association board have an obligation to disclose information to an owner about an individual who is leasing a unit? If the lessee has a permanent guest with a criminal background does the board have an obligation to disclose this to the owner? 

A:        Typically, a condominium association in New Jersey would not have an obligation to disclose information to an owner about another resident who is renting a unit or is a guest in a unit. The New Jersey Condominium Act sets forth the duties of a governing board of a condominium association. With respect to disclosures, the Condominium Act specifically requires the association to maintain accounting records, in accordance with generally accepted accounting principles, open to inspection at reasonable times by unit owners. See N.J.S.A. 46:8B-14(g). Such records include (i) a record of all receipts and expenditures and (ii) an account for each unit setting forth any shares of common expenses or other charges due. The Condominium Act further states that the board shall have such other duties as set forth in the master deed or bylaws. N.J.S.A.46:8B-14(i). Therefore, unless the master deed or bylaws set forth disclosure obligations in addition to those above, there is generally no duty to disclose information with respect to tenants.

Nevertheless, the Condominium Act still requires the board to exercise its power and discharge its functions in a manner that protects and furthers or is not inconsistent with the health, safety and general welfare of the residents of the community. Thus, where there is a risk of foreseeable criminal harm, an association has an obligation to take reasonable action.  What that reasonable action may be depends on the particular facts. Therefore, the board must balance the possibility that any specific notice to other residents of the community may result in the resident that lawfully resides in the community being harassed by other residents, thereby creating a potential liability for the association. This is a very complex balancing act for the board and it should not be undertaken without the advice of the association’s attorney. 


It would be a rare case in which notice of past criminal history of a resident should be reported to the other owners in the community. That determination should be made in consult with the association’s attorney and consider the type of crime committed (such as whether the crime was violent in nature), the age of the person at the time the crime was committed, the length of time since the crime was committed, and the amount of time during which the person has not been subject to incarceration and has not committed another crime. Even where the decision to disclose such matters is made, the board should ensure that the notice is limited to purely factual matters. 

CondoMundoUSA

Votación Por Linea - Video

10/18/2016 Martica Miguez Platts



Si usted vive en una comunidad residencial que está dirigida u operada por una asociación, o si usted sirve en la junta directiva de la comunidad, quizás desee obtener la comodidad de votación por línea.   Nuestra firma de abogados acaba de lanzar un breve video de instrucción sobre nuestro producto por línea llamado BPBALLOT.   Dedíquele unos minutos a este video.
La votación por línea le permitirá a su comunidad aumentar la participación de su membrecía a la vez que reducirá la posibilidad de fraude electoral.  Estamos seguros que usted disfrutará y obtendrá beneficios del video.  Si tiene cualquier pregunta, por favor envíenos un correo electrónico a condomundousa@bplegal.como llámenos al 561-820-2870. 

Martica y Marilyn
Sus amigas de CondoMundoUSA






Estudio de Votación y Fraude en las Asociaciones / Community Association Voting and Fraud Survey

06/17/2016 Martica Miguez Platts
CondoMundoUSA les trae el Estudio de Votación y Fraude.  Este estudio tiene el propósito de identificar las preocupaciones relacionadas con el proceso de votación de los miembros de las asociaciones de comunidades.  Los resultados ayudarán a crear materiales educativos y ayudarán a encabezar cambios en las disposiciones legales que gobiernan el método de votación en las comunidades.

Solamente le tomará 5 minutos haga "click" en el idioma que prefiera. 

Español                       Inglés

Gracias, 

Martica y Marilyn


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CondoMundoUSA has created a survey intended to help identify concerns of community association members related to voting. The results will help create educational materials and help spearhead changes in statutory provisions governing voting in communities.

It should only take 5 minutes, please click on your preferred language.

Spanish                       English



Thank you, 


Martica & Marilyn

The Community Association Law Blog

Part III of the Breaking Up Series: Leaving the Past Behind You

03/23/2017 Donna DiMaggio Berger
In this final installment of my Breaking Up series, I want to talk about what a new board needs to do to get out from under the legacy left behind from an old board, particularly when that legacy is not a positive one. 

"The secret of change is to focus all of your energy, not on fighting the old, but on building the new." 

Some new boards find that they need to depart entirely from the manner in which the association had previously been operated.  This is especially true when a prior board had been in place for a long time.
Some of the unpleasant discoveries that new boards may make include:
  1. A pattern of signing unfavorable service contracts which were never reviewed by legal counsel and which now bind the association for many years without any possibility for early extrication.
  2. The failure to routinely and consistently enforce important provisions in the governing documents.
  3. A disorganized jumble of association books and records which makes swift and successful document inspections unlikely.
  4. Large delinquencies which have not been properly handled.
When I meet with boards who are confronting the foregoing problems, my first piece of advice is to look forward and focus on setting better patterns in place. Typically, the only exception to this advice is if a crime or fraud was perpetrated by prior board members in which case we discuss all legal and criminal options available to the Board.

In terms of cleaning up the problems inherited from a previous board, the following steps can help put a healthier pattern in place:
  1. Have association counsel review all existing contracts; renegotiate when possible and send out termination notices for those no longer desirable contracts where are up for renewal or for which a verifiable breach exists.
  2. Just because a previous board has failed to enforce certain use restrictions does not mean subsequent boards are forever barred from doing so.  A new board can undertake a process known as "republication" which allows you to once again enforce overlooked restrictions by sending out proper notice of your intention to do so. Please speak with your association attorney to discuss the proper steps to take in order to accomplish this republication process.
  3. Work to digitize your books and records, create an association website if you don't already have one or update the one you do have and upload those newly digitized records to your website. The more organized and transparent you make your operations, the easier your board's job will be.
  4. Large balances are much more difficult to collect than small ones. New boards should discuss their existing collection policy with counsel and decide what is and is not working. You want to strike the right balance between not allowing a delinquency to balloon out of control while not being too harsh in terms of your policy.  Speaking of counsel, assess whether or not your current attorney is proceeding expeditiously with your collections or is part of the problem.
Perhaps the most difficult aspect of breaking free from a prior board is the fact that in many communities the previous board members remain residents in the community and often become very vocal critics of their successors. Moreover, a board is often not overhauled entirely but in a piecemeal fashion which means holdovers from the "old days" may become an impediment to changing the association's culture since they are usually fans of "business as usual".

Change is usually not easy but in the association context, it can make a world of difference when it comes to the board's ability to move critically important projects forward and resident satisfaction.

Email Intelligence-does your Board possess it?

03/07/2017 Donna DiMaggio Berger

In my last blog entry, I discussed the considerable downside to sending a resignation via email. Today, I am discussing the pros and cons of board members and managers using email for other purposes and how to craft a sound email policy for your association.
Board members, managers and association residents are no different from everyone else you know inasmuch as they are all heavily reliant upon electronic means to communicate. Phone conversations and, even more rarely, in-person conversations do still occur but not nearly as frequently as emails and text messages.
Whether you are a member of an association board of directors or are a manager assisting such a community, it is important to understand that (a) everything you put in writing can and will be used against you and (b) some topics and situations are not well suited to an email response.
Whenever I teach a Board Certification or other educational course, I always ask the directors and managers in attendance to raise their hands if their community has a comprehensive email policy in place. Surprisingly, not a single hand is raised.  Deciding in advance how your Board will handle emails from residents, professional advisers and vendors is not only advisable, it is necessary.
Here are some questions you need to ask yourselves and then craft the appropriate email policy with your association attorney's assistance to ensure it complies with both your documents and applicable law.
  •         If a resident emails the entire board with a complaint, who should respond? Without protocol in place, chances are everyone will respond (and sometimes with different answers and conflicting information) or no one will respond as a result of assuming someone else did.
  •         If a resident's email is akin to a rant with no specific purpose or request, how should it be answered, if at all? Florida law requires certified inquiries and written requests to inspect the association's books and records to be answered within a certain time period. However, nothing requires boards to respond to venomous email rants. Decide as a board how you wish to handle these kinds of communications. Some boards choose to use a simple auto response such a-"Thank you for your email. Your input will be reviewed and should a response be necessary, you will receive one."
  •         Email communications to and from professional advisers, particularly the association attorney should be deliberate and thoughtful. Since reading and responding to emails is typically a billable event, the board should determine who can send such communications to the attorney or the attorney's staff. In addition, when litigation is being discussed extraneous people should not be added to the recipient list for fear of jeopardizing the attorney-client privilege.
  •         Replying to all on an email and allowing Outlook to automatically complete email addresses (and thereby send to the wrong recipient if you don't check carefully) are the bane of most emailers' existence. This is doubly true for board members and managers so be sure to review your recipient list prior to hitting send. Also, know that blind copies are  no guarantee that your email recipient will not reveal having seen a copy of your email so think twice before doing that as well.
  •         Emails are typically part of the association's official books and records. As a director, if you do not wish to have your personal email address used to send and receive emails related to the business of running your association, it is wise to set up an official association email address for your directors. You should also discuss with your association attorney how many years you must retain those emails and the best method to do so.
These are just a few areas that need to be covered in your association's email policy. If you don't have such a policy, what are you waiting for?

Biz Law Today

What Is “Product Hopping” and Why Should You Care?

08/04/2015 Becker & Poliakoff

ThinkstockPhotos-97429646This post was authored by Ann Marie Effingham, an intern for Becker & Poliakoff who is based out of the firm’s Red Bank, New Jersey office.

New Jersey is home to 14 of the world’s 20 largest pharmaceutical companies so when our sister circuit—the Second Circuit Court of Appeals—issued a decision of first impression regarding pharmaceutical patents, we should take notice. To summarize, the state of New York brought an antitrust action against Actavis PLC claiming the manufacturer’s introduction of the once-daily capsule that treats Alzheimer’s disease at the end of the manufacturer’s patent exclusivity period for the twice-daily tablets impeded competition in violation of the Sherman Act. The Southern District of New York granted a preliminary injunction barring Actavis PLC from restricting access to the twice-daily version until after generic competition entered the market, and the Second Circuit Court of Appeals affirmed the injunction.

The Second Circuit Court of Appeals explained that neither product withdrawal nor product improvement alone is anticompetitive. However, when product withdrawal is combined with some other conduct—the overall effect of which coerces consumers and impedes competition—a manufacturer’s actions are anticompetitive under the Sherman Act.

The Actavis PLC case is an example of “product hopping”—whereby a manufacturer introduces a “second-generation” formulation of a drug and removes the previous formula that is nearing the end of its patent lifecycle which then restarts the regulatory approval process for the generic manufacturer. In theory, a manufacturer could keep reformulating its patented product if it can show that continuous improvement in the drug is being made. However, under some circumstances this type of behavior is anti-competitive. Generic manufacturers enter the market at the end of the brand name’s patent lifecycle so when a brand name manufacturer engages in “product hopping” it keeps generic manufacturers from entering the market—which could ultimately lead to a monopolization.

So what does this mean for the biopharmaceutical and medical device industry? The timing and rationale behind product reformulation is key. When product redesign is done simply to coerce consumers and impede competition, it is anticompetitive under the Sherman Act. The Second Circuit Court of Appeals noted that Actavis PLC’s own CEO admitted that the Defendants were “trying to . . . put up barriers or obstacles” to generic competition. Conversely, a large market share that is gleaned from natural growth, development of a superior product while simultaneously giving consumers the option of choice between products, or exceptional business acumen are all justifiable explanations for why a manufacturer may control a significant portion of the market.

A second product hopping case has arisen in the Third Circuit Court of Appeals. There, the Federal Trade Commission (FTC) has filed an amicus brief strongly supporting antitrust causes of action against companies that product hop. Hopefully the Third Circuit can provide more insight as to how to evaluate product hopping cases.

Employers Beware: You May Be Liable to Whistleblowers Without the SEC Ever Getting Involved

07/28/2015 Becker & Poliakoff

ThinkstockPhotos-184747120 (1)This post was authored by Peter Wojcik, an intern for Becker & Poliakoff who is based out of the firm’s New York office.

On June 17, the Second Circuit U.S. Court of Appeals heard oral arguments in Berman v. Neo@Ogilvy, LLC, making it the latest court to venture into the arena of interpreting Dodd-Frank’s whistleblower provision. In Berman, U.S. District Judge Gregory H. Woods of the Southern District of New York held that, before a whistleblower may be protected under Dodd-Frank’s whistleblower anti-retaliation provision, he or she must report securities violations to the SEC. This stands in stark contrast to other district court decisions that have allowed individuals to sue if they only disclosed the violations to their employers.

In Berman, the plaintiff alleged that he was fired after complaining to his employer about seeing transactions that he believed to violate U.S. securities laws, including Sarbanes-Oxley and Dodd-Frank. Never having reported these violations to the SEC, the plaintiff sued his former employer, alleging violations of Dodd-Frank’s whistleblower provision. The provision essentially prohibits an employer from retaliating against a “whistleblower” who:

  • Provides information to the SEC concerning violations of securities laws;
  • Initiates, testifies in, or assists in any investigation or judicial or administrative action of the SEC; or
  • Makes disclosures that are required or protected under the Sarbanes-Oxley Act and any other law, rule, or regulation subject to the SEC’s jurisdiction.

However, the provision also defines a “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the Commission . . . .” The plaintiff in Berman argued that he was entitled to protection because, although subsections (i) and (ii) protect disclosures to the SEC, subsection (iii) includes disclosures to supervisors. Judge Woods remained unpersuaded. In dismissing the plaintiff’s claim, Judge Woods noted that the provision’s language was clear: In order to be a “whistleblower” under the Act, the individual must provide the information “to the Commission,” i.e., the SEC.

District courts that have allowed Dodd-Frank whistleblower protection for individuals who report violations to their employers have essentially followed the plaintiff’s reasoning. Despite the plain language definition of a “whistleblower” under the statue, they have held that subsection (iii) is a narrow exception to the definition and encompasses protection for individuals who report to supervisors.

The Second Circuit is expected to hand down its decision later this year. Although the Fifth Circuit is the only circuit to already decide the issue (holding that whistleblowers must report violations to the SEC in order to sue), district courts across the U.S. are in disagreement. Regardless of how the court in one’s jurisdiction rules, however, the law is still subject to change. If courts continue to disagree, it is likely that the Supreme Court will take up the issue in the future. Until the High Court decides the issue, employers must be aware of the fact that they may be subject to liability under Dodd-Frank’s whistleblower provision once their employees report violations internally.

Construction Law Authority

William Cea Wins Summary Judgment in Federal Bid Protest Case

04/03/2017 Becker & Poliakofff

cea_william_20170118Becker & Poliakoff attorneys, led by shareholder William Cea, have secured a significant court ruling in favor of their client, Premier Parks, ending this case and providing for open competition to bid on a future water park planned for 65 acres in Fort Lauderdale (Premier Parks v. City of Fort Lauderdale).

Premier Parks, the parent company of Rapids Water Park in Riviera Beach, filed suit in October 2015 after the City tried to allow Schlitterbahn, a waterpark operator, to build on a 65-acre property owned by the City, including the existing Ft. Lauderdale and Lockhart Stadium facilities. After buying out the Federal Government’s interest in the land in 2015, the City agreed to enter into a 30-year lease with Schlitterbahn. Premier Parks argued that the City should have been required to obtain competitive bids for the project and the court agreed.

Gary Rosen, managing shareholder of Becker & Poliakoff, said: “This was a challenging case and we believed in our client’s right to compete for an opportunity to develop the property. We are extremely pleased for our client and are very gratified that the court has agreed with our view that the city should have submitted this to public bid.”

Media inquiries should be directed to Andi Phillips, Media Director, andi@roarmedia.com, (305) 403-2080, Ext. 128.

Keeping ‘Green’ Contracts Clear

02/21/2017 Mark J. Stempler

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The green building industry is arguably more popular than ever. The number of certified green buildings grows every day across all sectors of the building industry. Unfortunately, the contracts for sustainable projects are sometimes behind the times. Standard construction contracts are often not tailored to address the numerous issues and nuances that may come up on sustainable projects. This potentially puts all contracting parties at greater risk of uncertainty if disputes arise on the job site. Preparation on the front end of a green building is usually the best way to alleviate problems later on, and it starts with the contract. This is true whether the project is one for new construction or for renovations or retro-fitting.

First, the contract should be as clear and specific as possible about what the green goal is. Simply using terms like “green building,” “sustainable building” or “high-performing building” are not enough, because it is unclear what the precise goal is. For example, the goal may be to reduce electricity costs, and the owner may have a specific energy saving cost or usage goal in mind. That should be identified in the contract. In addition, an owner may require a third-party green rating certification. That could mean LEED certification, but LEED alone has multiple levels. Or, it could mean Green Globes, the WELL Building Standard, or a handful of other third-party rating agencies. If so, then specificity is needed. If the goal is not achieved, there will be no confusion as to what the goal was. Related to this issue is which party will bear the costs for certification fees, inspections and tests that may be necessary to the green certification. Again, this is best addressed in the contract.

Second, the contract should reflect who is responsible for achieving the project’s green goals. That might be a design professional like the architect or an engineer. Or it may be general contractor, sub-contractors, suppliers, a sustainability coordinator or a combination of construction professionals. Each segment of the construction project should be aware of what responsibilities it is undertaking in the green building process. The person or entity that is responsible also may want to get paid more for taking on the added risk.

Making Guarantees

All contracting parties should be aware of what guarantees they are making or receiving in terms of sustainable performance or certification. For instance, if a contract requires LEED Gold certification, but the final product does not achieve that, the contract should be clear about what the repercussions are. Similarly, the contract can address what happens when a component such as a solar energy system or a HVAC unit does not achieve the level of performance a contractor or otherwise represented.

An alternative to a guaranty is a performance bonus or bonuses based on the certification or performance levels achieved. In other words, a contract will describe a base fee for services on the project and then allow for additional compensation depending on the level of certification the building gets or based on the level of performance of the building after occupancy. This is helpful because it can be difficult to guaranty these levels on certain projects. Green building warranties may also be provided, but carry greater obligation or risk to the warranty provider.

The parties can also tie final completion benchmarks to the achievement of the sustainable goal, depending on the type of project. Money may be held back on a project pending the receipt of the green rating. However, when a rating will be bestowed by the rating agency is not always certain, and cannot be entirely controlled by the contracting parties.

A contract can also address the types of damages that may be obtained if the project fails to achieve the agreed-upon sustainability goals. For example, if the purpose of building green was to achieve certain tax credits, and those credits

are not achieved, they may become the measure of damages. Damages may be more difficult to ascertain in other performance metrics. Contracting parties may also want to consider capping those damages, or setting forth a method to measure them.

When it comes to green building contracts, there is no one size that fits all. Goals, methods, specifications and components can greatly vary. However, all parties involved in a sustainable building project have added incentive to consider and address the unique issues that may appear. Reliance on the standard building contract may not suffice. If the issues are not properly addressed upfront, the chances for dispute and litigation will significantly increase. As the old saying goes, an ounce of prevention is worth a pound of cure.

Mark J. Stempler is a Florida shareholder with the law firm Becker & Poliakoff. He is board certified in construction law, is certified as a LEED Green Associate and focuses his practice in the areas of construction litigation, government law, and civil litigation. He may be reached at mstempler@bplegal.com.

Florida Condo & HOA Law Blog

Eligibility to Run for Condominium Board Depends on Governing Documents

04/19/2017 David G. Muller
Question:  The wife of an owner (only the husband is on the deed) is running for the Board of our condominium association.  Is she eligible to run for the Board?  I thought you had to be an owner under Florida Law to serve on a condominium association Board?  D.A. via e-mail Answer:  Florida law...

This is a summary only. Visit http://www.floridacondohoalawblog.com or click the post title for the full entry.

Can My Condominium Association Remove Palm Trees?

04/18/2017 David G. Muller
Question: Our condo board wants to remove 44 mature Foxtail palms that shade the courtyards of our 22 coach home buildings. They claim their roots threaten the sidewalk pavers, but there are low cost solutions to address that concern.  The board also raises a concern regarding the palm fronds...

This is a summary only. Visit http://www.floridacondohoalawblog.com or click the post title for the full entry.