## Facts

- A developer created a large planned community containing single-family homes, townhouses, and condominiums, governed by a recorded declaration of covenants and restrictions.
- The declaration created an umbrella property owners association (POA) to manage common property and to levy and collect assessments from all owners in the development.
- A separate condominium association governed a subset of units (Class C) within the development; its unit owners also belonged to the POA and owed POA assessments.
- The declaration required owners to pay a general common expense assessment to the POA; certain classes, including Class C, also paid a recreational assessment for use of a pool and clubhouse.
- Section 7.21 of the declaration purported to make the condominium association responsible to the POA for unpaid POA assessments owed by individual Class C unit owners, requiring the condominium association to pay delinquencies and then seek reimbursement from its members.
- After control shifted from the developer to homeowners, the POA sought to enforce Section 7.21 against the condominium association for member delinquencies.

## Issues

1. Whether the New Jersey Condominium Act permits a declaration provision requiring a condominium association to pay an umbrella association for assessments that individual unit owners failed to pay.
2. Whether a developer may shift the risk of individual unit-owner nonpayment to the condominium association by making the association a guarantor of those owners’ obligations to a separate association.

## Decision

- The New Jersey Supreme Court reversed the Appellate Division and reinstated the trial court’s judgment.
- The Court held that the Condominium Act does not allow a developer to make a condominium association responsible for its members’ unpaid assessments owed to an umbrella association.
- Section 7.21 was declared void and unenforceable as inconsistent with the Condominium Act.

## Legal Principles

- Condominium governance instruments may not conflict with the Condominium Act’s structure allocating assessment obligations to individual unit owners rather than imposing secondary liability on the condominium association.
- A declaration provision that converts a condominium association into a guarantor or surety for members’ debts to a separate umbrella association is unauthorized under the Act.
- Private drafting flexibility in condominium documents is limited; provisions that reallocate statutory responsibilities and burdens in a manner inconsistent with the Act are invalid.

## Conclusion

The court invalidated a declaration clause that required a condominium association to cover its members’ unpaid assessments to an umbrella property owners association, holding that the Condominium Act places the duty to pay such assessments on individual unit owners and does not permit shifting that delinquency risk to the association itself.


Brandon Farms Prop. Owners Ass’n, Inc. v. Brandon Farms Condo. Ass’n, Inc., 180 N.J. 361, 852 A.2d 132 (2004)