Many community association board members communicate with each other by email (or Facebook or Twitter or other social media platforms). While this is acceptable, you must remember that if the association is involved in a lawsuit, all of the board members’ electronic communications will be discoverable by the attorney for the other party. A best practice would be to establish separate email accounts for each board member that are used only for Association discussions. It is our recommendation that you conduct your electronic communications in the same manner that you would at a board meeting. Other than obvious things to avoid like making disparaging comments about residents, you should also avoid making decisions through group emails. Remember, all votes by the board must be made at public meetings, and a vote done on a group email does not count. You should have specific guidelines for the use of electronic communications in place and make sure they are enforced. This advice includes email communications with and by your property manager. Emails between the board and the board’s legal counsel are protected by the attorney-client privilege, however there is a split of authority in the courts over whether communications between the property manager and the attorney are protected since some courts have found that the property manager is a third-party and therefore not protected by the privilege. We would be happy to meet with you and help you to draft email guidelines by way of resolution if you do not already have such guidelines in place. Feel free to call George, Gregg or Jen if you have any questions.
Insurance- Community association Boards of Directors should, without fail, meet with a qualified community association insurance professional on a yearly basis to confirm that adequate insurance is in place, not only for the association but also for the board members. Those standard coverages include Property, General Liability, Workers Compensation, Employee Dishonesty and Directors and Officers Liability. It is very important to understand what is and what is not covered under all of the policies. For instance, some D & O policies do not cover claims of discrimination and therefore, if an individual board member is accused of discrimination in a lawsuit, they may not have coverage from the D & O policy. Some D&O policies do not provide coverage for procedural claims so it is important to review each policy. A board should also inquire as to the availability and applicability of an umbrella policy that would provide additional limits. Not just any insurance broker will do – it is important to perform appropriate due diligence and to make sure that the Association’s insurance professional has experience and qualifications specifically related to insuring community associations. Failure by a Board of Directors to obtain insurance or failure to obtain appropriate insurance may not be covered by the Association’s D & O policy.
NEW LAW AFFECTING COMMON INTEREST COMMUNITIES IN NEW JERSEY
On July 13, 2017 new legislation was signed into law which could significantly impact community and condominium associations in New Jersey (P.L. 2017 Chapter 106, known as the “Radburn” bill). Portions of the new law addressing association elections go into effect on October 1, 2017 in order to give associations an adequate opportunity to review these new provisions to determine if and how they affect their current election procedures; the balance of the provisions in the new law take effect immediately. We will be providing more information to our association clients in the coming weeks, however here are a few highlights of the new law:
- In any elections occurring after October 1, unit owners in good standing will have the right to nominate themselves or other owners in good standing. Bylaw provisions requiring nomination by a Nominating Committee or requiring the signing of a petition by other owners will no longer be valid. Nominating Committees may still nominate owners for election to the board but they may no longer be the exclusive source of nominations to an association’s governing board.
- Notices seeking nominations for the board must be sent to all owners not less than 30 days before the notice of the election meeting is sent.
- Notices of the election meeting must be sent to all members 14 or more days before the meeting date, but not more than 60 days before the meeting date.
- Unless the governing documents set a specific time or interval, the elections shall be held at two-year intervals, and terms shall not exceed 4 years, although board members may serve more than one term.
- Candidates’ names must be listed alphabetically on all ballots, proxy ballots and absentee ballots.
- Electronic voting in board elections is statutorily authorized and electronic notice of meetings is also authorized if permitted under the bylaws of the Association.
- A somewhat complicated provision allows an association’s board to amend the bylaws without a vote of the members if no more than 10% of the owners object to the proposed amendment.
How these new laws affect each Association depends on their existing governing documents. Upon request, we will review your specific governing documents and provide you with detailed direction on what steps need to be taken to ensure that you are in compliance.
Board Training – each new community associationboard member should receive training on their duties, obligations and restrictions as board members. Remember that a board member has a fiduciary duty to the association and if they fail to properly carry out that duty, they can be held personally liable. Hopefully, all of you have Directors & Officers (D & O) insurance policies but there are instances where the insurance company will disclaim coverage because the board member(s) acted outside the scope of their duties and responsibilities. Therefore, it is important that board members receive training before they engage in the administration of the association. If you have a claim made against a board member and you submit it to your D & O insurer, you may well be asked if all of the board members received training. If training has not been provided, you better be prepared with a good answer as to why not. At a bare minimum, it should be a written requirement that any new board member certify that they have read all of the governing documents. The lawyers here at Shivers, Gosnay & Greatrex, LLC can provide that training to you at our normal hourly fee. Most management companies also have training available.
We are proud to welcome JENNIFER L. WEBB, as an associate attorney in our Cherry Hill offices. She focuses her practice on the representation of condominium and community associations. She advises the firm’s clients on matters including the collection of delinquent assessments and related charges, daily operations, the creation and enforcement of restrictive covenants and regulations, and fair housing compliance.
Ms. Webb has been practicing law in New Jersey and Pennsylvania for over 8 years. She graduated from The College of New Jersey, magna cum laude and received her Juris Doctorate from Rutgers University in Camden. She was born and raised in Burlington and currently resides in Springfield Township with her husband and children. She can be reached at firstname.lastname@example.org.
The New Jersey Supreme Court has recently determined that condominium associations are not immune from claims alleging injuries that occurred on private sidewalks which comprise part of the association’s common property. In Qian v. Toll Brothers Inc., a resident of a condominium association (who was not the record owner of the unit) alleged injury following a slip and fall on the ice on the association-owned sidewalk. The resident filed a lawsuit against the condo association, the developer, the management company, and the contractor responsible for snow and ice removal. In finding that the condo association is not immune from such lawsuits, the Supreme Court focused on who owned and controlled the sidewalk rather than who used the sidewalk. By doing so, the Supreme Court distinguished the facts in Qian from its 2011 decision in Luchejko v. City of Hoboken, which held that condo associations were not liable for injuries sustained on a public sidewalk adjacent to the Association. Unlike the association in Luchejko, the condo association in Qian owned the sidewalk in question and was responsible to maintain the common property in accordance with its governing documents and the NJ Condominium Act.
Ultimately, the Qian holding confirms that condominium associations have the duty to maintain their common elements, including but not limited to sidewalks, in a reasonably safe condition. If the common elements are not reasonably maintained, the association may be liable for any injuries sustained. While this case involved a condominium association, it is likely that such a holding would also apply to a non-condominium community association charged with the responsibility to maintain its common area in a reasonably safe condition.
Importantly, one issue the Supreme Court in Qian did not address was whether the tort immunity provision contained in the condo association’s governing documents protected the association in that case because the plaintiff was only a resident of the community, not an owner (the record owner was the plaintiff’s son). The tort immunity provision as set forth in N.J.S.A. 2A:62A-13 was designed and worded to protect common interest community associations (including condo associations) against personal injury lawsuits by unit owners. So, the Supreme Court in Qian left unanswered the question of whether it also protects the association from personal injury claims by a resident who doesn’t own the unit. This issue was remanded for further exploration by the trial court.
If you have any questions concerning this case, including your association’s duty to maintain the common elements and whether your association’s governing documents contain (or should contain) the tort immunity provision, please contact any of the lawyers at Shivers, Gosnay & Greatrex.
The New Jersey Supreme Court recently held that a rule imposed by the Board of Directors of a NJ cooperative apartment building that prohibited its members from distributing election leaflets in the building violated the free speech guarantee in the New Jersey State Constitution (see Dublirer v. 2000 Linwood Avenue Owners, Inc. published December 3 2014). Mr. Dublirer, a resident of the co-op, was interested in running for the Board in an upcoming election and asked the Board for permission to distribute campaign materials in the building. The Board, citing a “house rule” that barred soliciting and distributing any written materials, denied his request, claiming that the rule’s purposes were to preserve the residents’ quiet enjoyment of their apartments and to cut down on litter in the building. The resident sued the Association, and the matter was litigated up to the NJ Supreme Court, where the court found that the resident’s message was akin to political speech and thus entitled to the highest level of protection in our society. Citing to its prior well known free speech decisions in the HOA context, the Twin Rivers and Mazdabrook opinions, the Court determined that while an HOA board can adopt and enforce restrictions that are reasonable as to time, place and manner, in this case the ban on the member’s right to disseminate his election materials to his neighbors in the building was unreasonable. In short, the member’s right to free speech in this matter was found to outweigh the Board’s concerns about the use of the apartment building.
So, the lesson learned for HOA boards in New Jersey is to ensure the rules and regulations of the Association are reasonable as to time, place and manner, particularly when they apply to free speech issues (such as political signs, leaflets and speeches).