Thomas C. Martin, Esq.
Nowell Amoroso Klein Bierman, P.A., Chair, CAI-NJ Legislative Action Committee
A lot depends on perspective.
Depending on your perspective, recent news about the relative slowing in foreclosures is either good news or bad news.
It is good news if your perspective is that there are fewer instances of mortgage default (and likely fewer instances of maintenance fee defaults).
It is bad news if your perspective is that defaults are still high but lenders are delaying starting new foreclosures (and allowing the property to go into disrepair) in order to avoid taking possession of land or a condominium unit that now may have a greatly diminished resale value.
In either event, at the Community Associations Institute we want to make every effort to have laws on the books to allow common ownership interest associations to secure their interest in the maintenance fees. Although one piece of legislation is not likely to cure all issues with the stroke of a pen, we are hopeful Senate Bill 2036 may help Associations. That Bill, currently in the Senate, would expand the ability to record a lien to include types of planned real estate development associations. We are monitoring this Bill to explore its impact on our Associations.
Hopefully, there are fewer instances of mortgage default and less instances of maintenance fee defaults. Nevertheless, in the meantime, we want to preserve the rights of the paying unit owners to have a modicum of greater security when neither the maintenance fees nor the mortgage are being paid. This, of course, tends to preserve the equity of the unit owners.
In addition to maintenance fees, we are still keeping tabs on legislation designed to address potential conflicts of interest of Board governance. Disclosure remains an important and useful goal in order to preserve the integrity of the decision making process.
As part of the overall effort of the Legislative Action Committee for the Community Association’s Institute, we are working on other issues as they relate to mortgages and the federal housing home loan procedures.
We are also closely monitoring additional proposed legislation related to further inspections which may be duplicative of the existing inspections which are already required by the Department of Community Affairs. Inspections are important and we want to make sure our membership has guidance from one source as to what is appropriate for any particular structure as the case may be. Of course, costs are also an important issue facing our Associations.
Security measures are of great concern as well in today’s climate. The choice is made by each Association regarding the level of security. We are eying legislation which is still pending related to certain security requirements. Security is of great concern and so is the impact of legislation affecting the ability of Associations in terms of their self-governance.
We are monitoring a number of other bills in Trenton and we will keep you advised.
In the meantime, enjoy the rest of the summer.
