Residential community associations are multi-family, attached or detached, individually owned residences or residences for which one acquires an exclusive right to occupy (in the form of a long term lease in the case of a cooperative) or a time-limited ownership (in the case of a time-share) with an undivided fractional interest in the whole of the associated “common elements.” Common elements are usually open areas and/or recreational amenities and/or other facilities or features (like detention basins or sewer treatment systems or hallways and elevators in the case of a high rise).
Condominiums (Condos), Cooperatives (Co-ops), Home Owner Associations (HOA’s) or Property Owner Associations (POA’s) are terms of art that suggest the parameters of ownership within a community association. Often these terms and others such as “townhouse, condo, flat, or apartment” are used as short hand expressions to describe the style of a unit but they do not reflect the ownership type.
HOA POA Condo Co-op community association ownership types
There are important distinctions between types of common interest ownership communities and the contents of their respective governing documents. Depending upon the type of community subject to sale, a purchaser acquires either:
- Cooperative – shares of stock in a company that owns residential property and gives the holder of the shares the right to a long term lease of defined space within the building and an undivided fractional interest in the common elements. The deed for the real estate is held by the cooperative corporation and contains restrictions and covenants regarding use and transfer.
- Condominium – a deed to a specifically described unit within the Master Deed and an undivided fractional interest in the defined common elements which are all part of the same lot. Title to the common elements is not separated from title to the units. The Condominium Association has no ownership interest in any property. Title to the real estate is held directly by the unit owners. The Master Deed contains covenants and restrictions governing the entire property.
- Homeowner’s or Property Owner’s Association (often referred to as a “fee simple” community) – a deed to a defined space on a separate lot and an undivided fractional interest in the common elements. Typically, the common elements are on a separate lot(s), title for which is vested in a Homeowner or Property Owner’s Association. A “fee simple” community often has a recorded document called a “declaration” which contains covenants and restrictions governing all of the lots in the community.
Within the framework of the above types of ownership, there is room for variation and hybrids. For instance:
- In leasehold condominiums, the landowner maintains ownership of the property. Unit owners receive a long term right of ownership to the unit and an undivided fractional interest in the ground lease.
- Time-shares may involve any form or combination of ownership set forth above but limited in duration.
- Umbrella associations allow larger developments to have more than one community association within the development and may also have a separate “umbrella” association in the development. Umbrella associations are often called the “Master” or “Community” or recreational (like “Golf”) association. Usually, an umbrella association’s function is to administer those elements common to all of the communities within the development, while the individual community associations administer the common elements associated with their respective properties.
The role of the association’s counsel is to represent and promote the best interest of that corporation by advising the Board on all legal matters. Among other duties, the Association’s counsel attends meetings with the Board of Directors or the membership, or both (when requested). The Association’s counsel also reviews and prepares contracts for the association, initiates and prosecutes collection actions when necessary. Additionally, the association’s counsel guides the Board regarding the myriad of statutes and regulations affecting community associations and advises Boards of any changes in the laws governing these types of corporations. The association’s counsel can assist the Board in developing workable association rules and regulations for the community as well as the systems required to enforce them or to resolve disputes in a lawful manner.
HOA POA Condo Co-op community associations in transition
For associations in transition – meaning taking ownership and control of the association from the developer – the community association’s counsel collects, organizes, and presents all of the information of the association’s experts including management, engineering, and accounting, to the developer. More importantly, the community association counsel advocates, negotiates and litigates when necessary on behalf of the association to ensure that the association and its members receive everything to which they are entitled according to the public offering statement and the governing documents.
Representing community associations is one of our primary functions at Radom & Wetter. Our ongoing involvement in community association organizations and participation in educational programs provides our clients with the most accurate, up-to-date knowledge and expertise in the arena of community association law available.
Radom & Wetter keeps our clients informed on the most recent legal developments and industry trends crucial to the management and operation of Condo’s, Co-ops, HOA’s and POA’s. Whether you are a professional association manager, or a group of property owners, having the appropriate representation is critical to helping maintain your property value.
Contact Radom & Wetter
If you require professional legal advice and representation regarding Community Association (HOA) issues anywhere in New Jersey, make sure your legal rights are protected by seeking the legal advice of an experienced Community Association law firm. Contact us at 908-707-1500 or use our Contact Form.