In South Florida where planned communities are common, condominium associations—and homeowners’ associations—are often the norm, not the exception.  Florida Statutes Section 718.103 defines a condominium association as “any entity responsible for the operation of common elements owned in undivided shares by unit owners, any entity which operates or maintains other real property in which unit owners have use rights, where membership in the entity is composed exclusively of unit owners or their elected or appointed representatives and is a required condition of unit ownership.”

Similarly, under Florida Statutes Section 720.301, a homeowners’ association is defined as “a Florida corporation responsible for the operation of a community or a mobile home subdivision in which the voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the Parcel. . . .”

Simply put, whether it is a Condominium Association or a Homeowners’ Association, it is that Association that is charged, generally through its Board of Directors, with managing and operating the development in question.

Disputes frequently arise between a condominium unit owner and the Association when that unit owner suffers damage to her unit because of something that occurred in a neighbor’s unit.  For example, a hot water heater that bursts in a second floor unit can flood and cause significant damage to the unit immediately below it.  Under such circumstances, is or can the Association be responsible for that damage?  The answer is it depends upon what was damaged.

Under Florida Statutes Section 718.113, maintenance of the common elements is clearly the responsibility of the Association.  As such, if there was damage to the drywall or ceilings in the downstairs unit, both which are considered common elements, that would be the responsibility of the Association although the Association would likely seek indemnification from the upstairs unit owner if his negligence caused the incident.

Common elements do not, however, cover “all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit.” Florida Statutes Section 718.111(11)(f).   Assuming there was damage to any of these and assuming, again, the upstairs unit owner was negligent, the unit owner suffering the damage would have to look to that upstairs owner or his insurance company to address those damages.

The Appellate Division has once again confirmed that “distinctions between renters or property owners in the application of zoning and land use laws have no place in the application of legitimate objectives of zoning.”

In Tirpak v. Bor. of Point Pleasant Beach, A-5088-17T1/A-5147-17T1, decided Feb. 11, 2019, the property owner sought to remove a deed restriction imposed as a condition in connection with an earlier use variance. The restriction allowed for the use of the property as a two-family residence only if one of the units was owner-occupied.  The trial court vacated the condition after finding it legally impermissible and the municipality subsequently challenged that determination.

On appeal, the court confirmed that it was improper for the zoning board to condition its grant of a use variance on whether the residence was occupied by an owner or tenants.  In so doing, the court recognized the well-established principle that while zoning may be utilized to regulate the usage of property it cannot be applied to control the identity or status of the persons occupying the land. See DeFelice v. Point Pleasant Beach Bd. Of Adj.,  216 N.J. Super.  377 (App. Div 1987) and United Property Owners Ass’n of Belmar v. Borough of Belmar, 185 N.J. Super. 163, 165 (App Div. 1982)).  While the Zoning Board argued that the condition furthered the legitimate objectives of controlling noise and nuisance conditions, the court held that such objectives must be achieved through the police powers of the municipality, not its zoning laws.

In sum, a municipality may not employ its zoning laws in a manner that favors property owners and discriminates against tenants.

When a contractor is hired by a commercial tenant to improve the leased property, the contractor’s lien will ordinarily attach only to the leasehold interest, and not the property itself. In a recent Court of Appeals decision, however, the Court clarified in what circumstances the contractor can file a lien against the owner’s interest in the property.  Ferrara v. Peaches Café, 32 N.Y.3d 348 (Nov. 20, 2018).

In Ferrara, the tenant leased the commercial property for purposes of operating a restaurant, and its lease agreement with the owner contemplated that the tenant would build-out the space for purposes of operating the restaurant. After allegedly not being paid for work performed, the tenant’s electrical contractor filed a mechanic’s lien naming the owner, and sought to foreclose on the owner’s interest in the property.

Lien Law § 3 provides that the owner must have requested or consented to the work in order for a mechanic’s lien to attach to its interest.  Because the owner had no direct dealings with the contractor, and did not “expressly” or “directly” consent to the work, the owner argued that the lien was unenforceable against it.

The court rejected the owner’s argument and held that the owner need not have expressly consented to the particular work at issue, nor had any direct dealings with the contractor, for the lien to attach to the owner’s interest in the property.  Rather, “the owner must either be an affirmative factor in procuring the improvement to be made or having possession and control of the premises assent to the improvement in the expectation that he will reap the benefit of it.”

To determine whether the owner’s interest can be subject to a lien, the terms of the lease agreement are important. In particular, where the lease agreement requires the tenant to make certain improvements, the owner will be deemed to have consented to those improvements. The Court contrasted its prior decision in Rice v. Culver, 172 N.Y. 60 (1902) where the lease agreement, at best, merely authorized the tenant to make certain improvements. There, the tenant leased the property to build and maintain an athletic field, and was given the general right to construct and improve buildings upon the land. While the owner “must have known” that the tenant intended to make improvements upon the land, that general knowledge was insufficient to show that the owner consented to the specific work in issue which resulted in the filing of a mechanic’s lien.

The Ferrara Court found that the lease agreement evinced owner’s consent to the work. The lease agreement “not only expressly authorized [the tenant] to undertake the electrical work, but also required it to do so to effectuate the purpose of the lease[.]” Further, the lease provided that owner was “to retain close supervision over the work” and permitted owner to “review[], comment[] on, revise and granted ultimate approval for the design drawings related to the electrical work.”

Although the Court did not look to the parties’ course of conduct, it noted that consent need not be founded on the lease agreement alone. Consent can also be founded on the “owner’s overall course of conduct and the nature of the relationship between the owner and the lienor[.]”

Ferrara makes clear that an owner cannot insulate itself from liens on their real estate solely because it does not have direct dealings with the lienor. Where the lease requires certain improvements, and a lien is filed as a result of such improvements, the owner faces liability under the lien law despite having no direct dealings or even knowledge of the particular lienor’s work.

In a recent unpublished decision, the Appellate Division again confirmed that a zoning board may not reverse course without justification once it has made findings regarding a specific property.

In Oster v. Zoning Board of Adjustment of the Township of Middletown (Docket No. A-0037-17T3, decided January 11, 2019), the applicant sought and obtained a hardship variance from the Zoning Board (the “Board”) pursuant to N.J.S.A. 40:55D-70(c)(1).  The variance, which was obtained in 2009, permitted construction of an underground storage area and above-ground conservatory within the side yard setback.  The Board concluded that a variance was warranted because of the construction difficulties posed by the property’s unique shape, irregular configuration and use as a vineyard.

In 2016, the applicant abandoned the original development plan approved by the Board and filed an application seeking a variance to build an underground storage area/garage with a peaked roof in the same location.  The Board, however, disregarded its prior 2009 ruling concerning the property’s unique characteristics (even though the property’s shape and use remained unchanged) and denied the requested variance relief.  The applicant subsequently challenged the decision in a prerogative writ action, but the trial court sided with the Board.

The Appellate Division reversed after finding that the Board was required to honor its prior ruling concerning the property’s unique character.  The court held that the doctrine of collateral estoppel bars a zoning board from re-litigating any issue that was actually determined by it during a prior application.  Consequently, the court instructed the Board to conduct further proceedings on the sole issue of whether the applicant had satisfied the other requirements for c(1) variance relief.

This decision underscores the importance of reviewing all prior land use applications and decisions when pursuing or objecting to variance relief for any given property.

In Farmland Dairies, Inc. v. Borough of Wallington, N.J. Super. App. Div. (per curiam) (unpublished decision) (35-2-7909), the Appellate Division upheld the decision of the Tax Court in denying an unrelated neighboring property owner’s efforts at intervening in a pending local property tax appeal between the property owner and the Borough.  The court concluded that the intervention application of the putative intervenor was out of time and barred by the statute of limitations.  Although all residents of municipalities have standing and maintain the right to pursue tax appeals as “aggrieved” parties under the statute, including those related to their neighbor’s properties, any such contests must nonetheless comply with the statutory filing deadline.

The New Jersey Supreme Court has consistently recognized the necessity of complying with filing deadlines in the area of taxation.  The statutory scheme establishing the court’s jurisdiction in this area is “one with which continuing strict and unerring compliance must be observed.” See McMahon v. City of Newark, 195 N.J. 526, 546 (2008).  Indeed, our Supreme Court has declared that the “failure to file a timely appeal is a fatal jurisdictional defect.”  F.M.C. Stores v. Borough of Morris Plains, 100 N.J. 418, 425 (1985).  The Supreme Court has also explained that strict adherence to statutory filing deadlines is of particular concern in tax matters, given “the exigencies of taxation and the administration of local government.”  F.M.C. Stores, 100 N.J. at 424.  The Legislature “has attempted to set out a well-organized time-table for the purpose of enabling a municipality to ascertain the amount of taxable ratables within the jurisdiction in order that it might adopt a responsible and fairly accurate budget.”  Id. at 425.  “By incorporating a strict deadline in [the statute], the Legislature intended to ensure that municipalities receive timely notice that a particular property’s valuation is subject to challenge.”  Prime Accounting Dept. v. Township of Carney’s Point, 2013 N.J. Lexis at *31.

After previously remanding the matter to the Tax Court for further proceedings concerning the timeliness and propriety of the putative intervenor’s application for permissive intervention, the Appellate Division made it plain, mindful of the above-referenced well-settled jurisprudence, that any effort to intervene must, in the first instance, be timely pursued and that the annual tax appeal filing deadline will effectively wait for no one.

Although as demonstrated above, the inviolate nature of this statutory deadline is plain, the court’s decision here may have been made easier by the attendant distasteful nature of a case involving an unrelated party’s efforts at meddling with pending litigation between the real parties in interest (the actual owner of the property in question and the municipality).