Q&A: Can My Association Take My Reimbursement Money?

Q. I live in Marlton. My HOA takes our reimbursement money from the Township, and the condo owners never see it. Is this allowed?

     —Tenant Who Needs Clarification

A. According to attorney Eric D. Mann of the Northfield-based firm Hyberg, White & Mann, “The quick answer to the reader’s question is that there is nothing improper about an association not redistributing municipal services refunds to its members directly. The New Jersey Municipal Services Act (NJSA 40:67-23.2 et seq) requires municipalities to either provide specific services (such as removal of snow and ice and other obstructions from roads and streets, lighting, collection of leaves and solid waste) to ‘Qualified Private Communities,’ defined to include all types of common interest communities – or in the alternative, to reimburse the community for their costs in providing these services in an amount not to exceed the cost that would be incurred by the municipality, had it provided those services directly.  There is nothing in the act that mandates how the community utilizes the funds it receives through the reimbursement process.  Should an association receive reimbursement for these services, it is almost invariably less than what was actually spent in providing the service. As such, the association would generally place the refund in its general operating account.

 “Should the association have an operating surplus at the end of its fiscal year, there is likely a provision in its governing documents that would permit it to refund its owners on a pro rata basis but one would need to review the specific governing documents to determine how this is handled.”

Related Articles

Managing Municipal Reimbursements

Who Pays What, and When?

Q&A: Owner Leaves Property, Files for Hardship

Q&A: Owner Leaves Property, Files for Hardship

Q&A: What About the Kids?

Q&A: What About the Kids?