Percentage interest - condominium fees and assessments

What is the name of your state (only U.S. law)? NJ

We purchased a condominium a few years ago and have recently discovered that we have been charged the same condo fees and assessments as owners having larger square footage units. When we brought this to the Board's attention, they stated that we have been paying it all along and instead are now trying to change the master deed and by-laws to simply divide all expenses equally among owners.

They are proposing a change to the master deed to simply divide all expenses by 9 the total units in the building regardless of square footage. Our governing documents specifically spell out what the common interest percentages are, and that condo fees and assessments are based upon this. The Board's lawyer contends there is no case law prohibiting them from changing the master deed. We however feel the NJ Horizontal Property Act protects us. It says the following:

“In each regime an apartment owner shall have the exclusive ownership of his apartment and shall have a proportionate undivided interest in the general common elements, equivalent to the percentage of the aggregate value of all the apartments represented by the value of his own apartment."

It also says:

. Said percentages shall have a permanent character, and shall not be altered without the acquiescence of the coowners of all the apartments in the regime. “

Are we correct or is the Board's lawyer? Currently we have a 9 member association with 4 officers and 1 trustee so we obviously do not have leverage on this issue as 6 units are larger and only 3 are smaller.

Also, if the change is voted into the master deed & gets recorded, is it in conflict with the Horizontal property act, and if so, does the Horizontal property act supercede any conflict in the master deed?

ghtix said:

What is the name of your state (only U.S. law)? NJ

We purchased a condominium 4 years ago and have recently discovered that we have been charged the same condo fees and assessments as owners having larger square footage units. When we brought this to the Board's attention, they stated that we have been paying it all along and instead are now trying to change the master deed and by-laws to simply divide all expenses equally among owners.

They are proposing a change to the master deed to simply divide all expenses by 9 the total units in the building regardless of square footage. Our governing documents specifically spell out what the common interest percentages are, and that condo fees and assessments are based upon this. The Board's lawyer contends there is no case law prohibiting them from changing the master deed. We however feel the NJ Horizontal Property Act protects us. It says the following:

“In each regime an apartment owner shall have the exclusive ownership of his apartment and shall have a proportionate undivided interest in the general common elements, equivalent to the percentage of the aggregate value of all the apartments represented by the value of his own apartment."

It also says:

. Said percentages shall have a permanent character, and shall not be altered without the acquiescence of the coowners of all the apartments in the regime. “

Are we correct or is the Board's lawyer? Currently we have a 9 member association with 4 officers and 1 trustee so we obviously do not have leverage on this issue as 6 units are larger and only 3 are smaller.

Also, if the change is voted into the master deed & gets recorded, is it in conflict with the Horizontal property act, and if so, does the Horizontal property act supercede any conflict in the master deed?

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You are misapplying the Act. It means that property owners have a proportionate ownership of the COMMON grounds.... not HOA fees. If there are 9 owners in the property... each owns 1/9th of the COMMON grounds.

So are you saying that regardless, everyone should pay equal fees? If so, why is it not that way in many condo associations? We know of many condo associations where the different unit owners pay different amounts in fees based on the square footage of their units.

Also, for this change to be made in the master deed, would it require a unanimous vote or not?

I disagree with JETX's interpretation. Your HOA dues pay for the maintenance of those command elements. For example, if you own X percentage of those common elements, you should pay X percentage of the insurance for those and X percentage to clean them. Those are the types of things your dues pay for, therefore the amount of dues you should pay are directly related. If your building burned down today the association's insurance company will give you a check equal to your percentage ownership regardless of what percent of the dues you are paying.

Let me guess, the board members proposing this all have units with a higher percentage ownership? It is legal for them to change the percentage ownership in their documents, and that would legally allow them to charge all the same dues. However, this may require a unanimous vote and be very difficult to obtain. In my state a unanimous vote is required to change percentage ownership and I can guarantee that owners in my building would not go for it if it meant their dues would go up, and it is likely the same in your building. It sounds like you need to consult an attorney to determine your options, especially if you wish to force the board to change how they are currently charging. You may want to join forces with those that also have smaller units and would be benefited by paying dues based on ownership.

Let me guess, the board members proposing this all have units with a higher percentage ownership?

Yes.

The master deed and laws, as I read them, say it DOES require a unanimous vote. Problem is, the Board lawyer is smooth-talking over this point and supporting the Board, even though the law is the opposite. There is a serious ethics problem here. He is enabling the Board to break the law.

Right now I am hard-pressed to hire an attorney. As far as the other units, there are 6 larger ones and 3 smaller ones, so even if the other 2 owners of smaller units & I joined forces the other 6 will make up the majority vote and they will ram this through, forcing us to spwnd money for a lawyer when we shouldn't have to when the laws are clear.

JETX is correct. Your share is not about your own unit, but the common property. You own 1/9 and must pay to care for that 1/9, the same as the other 8.

Out of curiosity, what expense do you think should be paid less by you, based on your square footage of your unit?

FBM said:

I disagree with JETX's interpretation.

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39,507 vs 6. Who do you think has the most experience?

Also, if the building burned down, the HOA's insurance will not cut owners checks for the rebuilding. They will be writing A check to the contractor who does the work.

Here are a few links to articles I found while looking into this. To show that this is common in condo associations.

http://northernvirginiarealestate.wordpress.com/2007/07/31/condo-fees-the-good-the-bad-and-the-ugly/]Condo Fees – The Good, The Bad and The Ugly Northern Virginia Real Estate

http://www.city-data.com/forum/real-estate/697694-hoa-fee-question.html]HOA fee question (square footage, agent, fees, condos) - Real Estate - Brokers, appraisals, development, lease, investing, relocation, apartments, houses, condos, values, mortgages, loans... - City-Data Forum

http://www.austintowers.net/Austin_Downtown/files/downtown_condo_costs.html]How much does it cost to own a condo? | Market Analysis | austintowers.net

http://www.goftp.com/qna/How_are_monthly_fees_calculated_for_condo-qna482.html]How are monthly fees calculated for condo - Hello, How are monthly fees calculated for condo? A little advice would go a long way right now. :: GoFTP Answers

ghtix said:

Here are a few links to articles I found while looking into this. To show that this is common in condo associations.

http://northernvirginiarealestate.wordpress.com/2007/07/31/condo-fees-the-good-the-bad-and-the-ugly/]Condo Fees – The Good, The Bad and The Ugly Northern Virginia Real Estate

http://www.city-data.com/forum/real-estate/697694-hoa-fee-question.html]HOA fee question (square footage, agent, fees, condos) - Real Estate - Brokers, appraisals, development, lease, investing, relocation, apartments, houses, condos, values, mortgages, loans... - City-Data Forum

http://www.austintowers.net/Austin_Downtown/files/downtown_condo_costs.html]How much does it cost to own a condo? | Market Analysis | austintowers.net

http://www.goftp.com/qna/How_are_monthly_fees_calculated_for_condo-qna482.html]How are monthly fees calculated for condo - Hello, How are monthly fees calculated for condo? A little advice would go a long way right now. :: GoFTP Answers

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First, none of your links have any relevance to NJ. In fact, some of the posters in the other forums even point out it is different in each State.

Second, none of the information in the other forum posts is authoritative. They are simply more opinions where both sides are represented.

Third, can you answer my previous question?

can you answer my previous question?

Pardon my density, but perhaps I could if i knew what 39,507 referred to.

The articles I found & provided links to were for illustrative purposes.

Is anyone who posts here authoritative? Or just speculating? I'm newer here and don't know anyone's background, but could take to heart any advice from those who speak from experience or from a professional background.

First, the numbers that are given reflect the amount of posts here. I would say having over 32,000 posts might make someone an authority (especially as opposed to FBM who only had 6!).

Second, the question I asked of you has still not been answered: Out of curiosity, what expense do you think should be paid less by you, based on your square footage of your unit?

Third, if you want to know more about a poster, click on their user name and choose Public Profile.

I think you would be best served in putting your stock in Jetx's opinion.

Thank you for the guidance - will navigate around the forum as soon as I have time.

Out of curiosity, what expense do you think should be paid less by you, based on your square footage of your unit?

Nothing really, except that I do not rent my unit as a majority of others here do, and it's a fact that the tenants here use much more of the common utilities, cause the common-areas (carpeting etc) to need more frequent cleaning, make more trash that needs to be hauled away more frequently, etc. The owners of rented units get away with murder when their tenants cause proportionately more expense that everyone winds up paying for equally. So, maybe that's the true answer.

But regardless: if the docs state what the the percentage interests are, and say that the dues are based on that, and also say that the percentages can only be changed unanimously, and my deed also states my percentage interest - and - if the Horizontal Property Act also states that the percentages of interest can only be changed unanimously, why does the Board - and their attorney - feel that they can put an amendment up for vote and then record it based on a majority acceptance vote - not a unanimous one.

Answer: most of them have the larger units and are the landlords. And, their lawyer wants to get paid for massaging the right way - law or no law.

Seems to me that if recorded it will still be superseded by statute, rendering it invalid.

What am I missing here?

Well it seems that your interests extend beyond what your share should be. It seems to be the classic Owners vs. Renters.

Since this is NJ, the best advice anyone can give is this: Lawyer up.

Thank you for your advice. My interests are based in doing what is right, following the law and belonging to a condo association that is interested in the same. Sadly, the reality is otherwise - crooked board, crooked board lawyer, self-service above the good of the whole. Welcome to NJ.

Finding a lawyer soon.