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By: Mark Stephenson
The close-set nature of condominium association communities lends to the adoption of codes of conduct as an effective way to promote efficient dispute resolution and unit owner civility. Such disputes are a too-fruitful source of litigation. Recently, in Chassman v. Longview at Montville Condominium Association, the Superior Court of New Jersey, Appellate Division affirmed the right of a community association to enforce its code of conduct and approved the way in which the association did so. Docket No. A-1660-16Te, 2018 N.J. Super. Unpub. LEXIS 1325 (June 7, 2018)
Plaintiff Jacqueline Chassman lived with her son as a unit owner at the Longview condominium. On February 3, 2014, Chassman and her son were involved in an altercation with an employee of the snow removal company hired by the Association. During the altercation, the son allegedly threw a punch at the snow removal employee. Learning of the incident, the Association sent a “Cease and Desist Order, Notice of Fine” letter to Chassman, advising her that her son’s conduct was a violation of the Association’s code of conduct, resulting in a $100.00 fine.
The Association’s by-laws afforded unit owners with a dispute resolution procedure, which Chassman used to request a hearing to dispute the allegations regarding the incident. The Association’s judicial committee held a hearing and Chassman was afforded the opportunity to testify, call and cross-examine witnesses and present evidence. Based on the record evidence before it, the committee concluded that the evidence showing Chassman’s son had punched the snowplow operator was credible, the conduct violated the code of conduct and increased the fine to $150.00. The committee issued a written decision that Chassman appealed to the Association’s board, which affirmed the original decision. Chassman refused to pay the fine, causing her membership privileges to be suspended. As a result, she was unable to use the condominium’s common facilities, including its clubhouse and swimming pool.
In May 2015, Chassman filed suit against the Association, alleging, among other things, that the code of conduct was invalid, the Association’s dispute resolution procedure was unlawful, and the Board had breached its fiduciary duties owed to her as well seeking $8,500.00 in damages plus interest and costs. The trial court granted summary judgment in the Associations’ favor, holding that its actions, and those of the Board and the Committee in resolving the dispute were authorized by the by-laws. Chassman appealed. In affirming summary judgment and dismissal, the Appellate Division made clear the Association’s broad right to determine and enforce appropriate rules of conduct and impose penalties for violations, a holding helpful to Associations coping daily with vexing and often highly-personalized disputes.
The appellate court observed that a condominium association’s authority is found in the New Jersey Condominium Act and its by-laws. Such by-laws allow an association to establish a method to adopt, amend and enforce reasonable administrative rules and regulations that the association and its board are responsible to enforce, including reasonable fines, assessments and late fees on unit owners as the by-laws may authorize. In this matter, the Association’s by-laws empowered the Board to adopt rules and regulations necessary for operation and use of the property, including rules and regulations regarding the conduct of unit owners and persons residing in their units. The Association’s by-laws expressly authorized the Board to impose a penalty for violations of the code of conduct and suspend unit owners from membership privileges when they fail to pay a duly-imposed penalty. Finally, the appeals court found that the Association’s dispute resolution process fairly addressed Chassman’s claims. Eventually, Chassman paid the fine and her privileges were restored.
Disputes involving condominium associations, their board and committee members, unit owners and residents are often time-consuming, burdensome and costly. Effective dispute resolution procedures and well thought-out codes of conduct can help resolve matters more efficiently and quickly.
If you have any questions or would like more information, please contact Mark Stephenson at [email protected].