How often should the Board meet with legal counsel?
Our firms understands that many Board Members are employed during the day and volunteer their energy and efforts for the benefit of the Association. Many times the Board cannot meet during the day. Our firm makes every effort to accommodate all its clients and attend any and all meetings where legal counsel appearance is requested.
Our firm recommends that the Board of Directors meet with us at least two (2) times per year to discuss strategy on pending legal matters. Our firm so deeply believes in this philosophy that we do not charge the client for the time spent preparing for or attending these meetings. The Board should take the opportunity to discuss strategies on energizing the Association's collections during these meetings.
When should an Association refer a delinquent unit owner to the Association’s attorney for handling?
In general, each Association should follow its governing documents (Master Deed, Declaration, By-Laws, Resolutions, Rules and Regulations) as it pertains to its collections policy. Some documents set specific time periods for collection purposes. The documents will provide guidance to the Board regarding various aspects of collections, including assessment of interest and late fees on delinquent payments, and correspondence from the Board or management company prior to the account being forwarded to the Association's legal counsel.
During these economics times, we understand that there may come a time a unit owner may fall behind and the issue should be addressed sooner rather than later. As such, if the documents do not set a time period to commence legal efforts, we recommend that all delinquent accounts should be forwarded to the Association's legal counsel within sixty (60) days of the initial delinquency.
When and how frequently does the attorney forward payments received from unit owners to the Association?
We understand that The Association receives payment when the delinquent owner issues payment to our firm, after deduction of any attorney's fees owed on that matter. Our firm forwards payment to your management company (or the Association directly if self-managed), noting the account that it should be applied to and in what increments. Payments are sent once our firm is assured that the payment has cleared our firm's trust account.
Who pays for legal fees and costs incurred incident to collections?
Expenses incurred by the association in collecting overdue assessments should be reimbursed/charged back to the offending unit owner.
Giaimo & Associates, LLC, is responsible for the leading Case Law in New Jersey that holds that Community Associations are entitled to be reimbursed for their attorney fees and costs incurred when dealing with a non-compliant homeowner. Park Place East Condo Assn v. Hovbilt 279 N.J. Super. 319 (Ch. Div. 1994).
As the court noted in Park Place, “The legislative scheme for collection of assessments for maintenance charges against individual unit owners is a recognition that such charges are the financial life-blood of the Association. They are conceptually akin to the right of a municipality to levy and collect real estate taxes. The legislature clearly did not intend that the necessary income stream be reduced by the payment of ‘reasonable attorneys fees’ incurred in the process of collection of the charges.”
What are the Association’s options when dealing with a unit owner who is violation of the governing documents?
If request for compliance from the Board and/or management company are not successful in curing the violation, the Association has two options: (1) levying a fine; or (2) injunctive relief. The New Jersey Condominium Acts sets forth the process for the Association to levy fines for non-compliance with the Association's governing documents. If the levying of a fine does not temper the violation, the Association's counsel can send a Demand for Pre-Suit Mediation and proceed with a suit for injunctive relief, should the unit owner not submit to mediation.
When can the Board have a closed meeting?
Usually when the board is receiving advice from the Association's legal counsel regarding pending or threatened litigation. Unit owners may be excluded from attending these meetings. However, the Board is still required to post notice of these meetings and maintain minutes from these meetings, but these meeting minutes will be protected by “attorney-client privilege.”
Duties & Responsibilities