Court Says Owner Must Pay Maintenance Fees But Has Claim for Damages against Homeowners Association

New Jersey Appellate Court decision (June 6, 2017)

This case involved a dispute between a homeowners association (“Association”) and an individual condominium owner /member of Association (“Owner”) over Owner’s refusal to pay monthly assessments because of a dispute over the lack of maintenance being performed by Association.

Specifically, Owner took issue with Association over the growth of roots in the front and back yards of his unit, the manner in which the grass was being cut, and a failure to power wash mildew from the exterior of the roof. Owner further contended that, in retaliation for Owner’s non-payment of his assessments, Association purposefully did not provide, treat and remove snow and ice from his driveway and walkway in the manner it did for other unit owners.

Association initiated the court action seeking unpaid maintenance fees, late fees, and attorney fees based on Owner’s breach of Association’s governing documents. Owner then filed a counterclaim against Association seeking damages for Association’s failure to provide the services and maintenance required under the governing documents. The trial court found in favor of Association and awarded Association a judgment for the unpaid assessments plus attorney fees. The trial court also dismissed Owner’s counterclaim against Association. Thereafter, Owner appealed the trial court’s judgment.

The appellate court affirmed the trial court’s judgment in favor of Association for the unpaid maintenance fees (plus the attorney’s fees) based on established law that an owner’s obligation to pay condominium fees is “unconditional” and a breach by Association of its duty to perform maintenance does not relieve an owner of the obligation to pay assessments. Thus, absent a provision in Association’s governing documents which permitted an owner to withhold monthly payments of the owner’s share of assessments if the owner is dissatisfied with services performed by the homeowners association, an owner is obligated to pay their share of maintenance fees even if there is dissatisfaction with the services provided.

In reviewing the dismissal of Owner’s counterclaim against Association, the appellate court ruled that a unit owner who is improperly denied services by a homeowners association is entitled to recover damages for the reasonable value of the loss of use of the owner ‘s property as a set off against the owner’s obligation to pay the maintenance fees. Thus, Owner was entitled to a setoff against the assessment obligations he owed to Association for the amount of the damages as a result of Association’s breach of the state laws, the governing documents, or its duty of good faith and fair dealing by improperly failing to provide services or by improperly retaliating against Owner. Because Owner had a burden to establish the amount of his damages and he failed to offer proof of the damages for most of the alleged failures to maintain and retaliation, the trial court properly dismissed those claims. Nevertheless, because the trial court failed to determine whether or not Owner should have been credited with any portion of the costs relative to the failure to maintain the roots in Owner’s front yard, the appellate court remanded the case back to the trial court for further findings on that issue.

See case decision: A_Country_Place_Condo._Ass’n_v._Abdelhak_(N.J._Super._App._Div._2017)1