As a concerned shareholder, the board's actions are not only fraudulent but clear violation of the bylaws. What can a shareholder do to address such fraud, violation of the bylaws and breach of trust? Is there a legal body in New Jersey to address abuses of the board aside from the internal alternate dispute resolution committee?
—Aggravated in Avalon
“There are several avenues for relief—first is to exhaust your own dispute resolution procedure, which is generally required prior to starting suit. Second, your bylaws likely have a process to remove board members. If the community is as upset as you are, the Condominium Act, N.J.S.A. 15A:6-6 includes a procedure for removal, again unless the bylaws or certificate of incorporation provide otherwise. There are usually differences between removal “for cause” or “without cause,” which may also be provided for in your governing documents. Third, you may contact the New Jersey Department of Community Affairs, which is the administrative body governing the proper establishment of condominium developments. If they agree to take jurisdiction of your issue, they have a complaint process.
“Lastly, you may have a right to go directly to court, for breach of fiduciary duty, fraud, or simply to enforce compliance with your own governing documents. For some legal claims, you can bypass the dispute resolution procedure. You should secure legal counsel if you wish to pursue that legal remedy.
“Ultimately, the unit owners have the greatest power, that of the ballot, to change the board and elect others who will abide by the governing documents of your association.”