1. The New Jersey Condominium Act (N.J. S. 46:8B-1 et seq.) is applicable to all condominiums established after 1-7-1970. Townhomes or detached dwellings have no unique law which is applicable to them but are guided by the Non-Profit Corporation Act (N.J. S. 15A:1-1 et seq.) or the Business Corporation Act (N.J. S. 14A:1-1 et seq.). The Planned Real Estate Development Full Disclosure Act, or PREDFDA, (N. J. S. 45:22A-21 et seq.) does, however, govern some aspects of common interest communities. The Condominium Act provides for creation of the Condominium, the creation of the Condominium Association, the governing board for the association, its duties and responsibilities vis a vis its members, the implementation of bylaws, assessments, liens for nonpayment of dues and termination of the condominium. The PREDFDA deals with registration of common ownership property with the State of New Jersey, bylaw provisions, contents of public offering statements, and the powers of the association.
2. The governing documents of any condominium include the Master Deed, the Bylaws, and the certificate of incorporation. The Master Deed contains the name of the condominium, the description of the lands, the voting rights of the unit owners, the By-laws, the name of the association to be created, and the manner of sharing common expenses. The Blaws of the association govern the operation of the board of trustees. The certificate of incorporation helps to insulate the unit owners from liability. A thorough understanding of these three documents is essential to any analysis of condominium issues.
3. The causes of action against associations are many. Generally, however, the board is sued for breach of its fiduciary duty to either its members or to the public, negligence by the board, discrimination, or exercising its powers outside the scope of the governing documents. The bylaws of the condominium constitute a contract between the association and its members and therefore, the board of trustees bears a fiduciary relationship to its unit owners. At times, the board is sued for its failure to exercise its powers or exercising powers outside the parameters allowed. Finally, the association is often sued for negligence matters involving fall down cases, slip and fall cases, dog bite, and libel or slander.