We all want to get what we pay for—and nobody wants to pay for goods or services they don't actually receive. This is especially true of homeowners associations when it comes to big-ticket municipal services like snow and garbage removal, street lighting, and so forth. In light of that, it's perhaps surprising how many New Jersey HOAs are unaware that they may be overpaying for these services, or are owed reimbursement for them from their municipalities.
A Look at the Law
Here's the fact of the matter, according to attorney David J. Byrne, co-chair of Lawrenceville-based law firm Stark & Stark's Community Associations Group: pursuant to the Municipal Services Act passage in 1989 and amended in 1993, every municipality in New Jersey is required to either provide certain services to each qualified private community within its borders or reimburse the community for these services, including the removal of snow, collection of trash or recyclables or lighting of roads and streets.
“The purpose of the Municipal Services Act is simple,” says Byrne. “It eliminates double taxation of community association residents. In one of the seminal cases interpreting the Act, Briarglen II Condo Association Inc. v. Township of Freehold, the Appellate Division determined that the legislative intent of the Act was to 'help eliminate double payment for some services which the residents of qualified private communities now pay through property taxes and fees to their association.' ”
Although the Municipal Services Act went into effect nearly two decades ago, Byrne says that many qualified associations fail to take advantage of having their municipality provide either services or reimbursement, simply because they don't realize they're entitled to them. “This means countless associations in the state—like the 70 or so in Long Branch that were reimbursed over $100,000 by that town's city council for snow removal and street lighting services in 2006, for example—may be entitled to significant reimbursements that could be used to free up other funds for capital reserves, necessary repairs, or long-overdue improvements to their communities.”
The Root of the Problem
It may seem odd that perpetually cash-strapped buildings and associations (and whose isn't?) would overlook thousands of dollars in services or reimbursements—but, say the pros, that's exactly what happens in many HOAs where volunteer board members may not know the law, or feel entitled to speak up against town officials who have their own agendas and money worries to look out for.