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Limiting Liability for Condominium, Homeowner and other Community Associations

On March 20, 2013, the Superior Court of New Jersey ruled in Irma Sanchez v. The Villages Association that the burden of proving the validity of a community association’s bylaws limiting its liability in personal injury cases rests with the injured plaintiff. It is beneficial for community associations, their boards, professional managers and unit owners to be aware of this case and its repercussions. An awareness of these issues could dramatically decrease the instances of lawsuits, and could save community associations and their members a great deal of time and financial burdens.

In Sanchez v. Villages Association, the plaintiff injured herself on a portion of cement sidewalk in disrepair. The plaintiff initially alleged that the association was at fault for the injury, claiming negligence. The association contended that they had instituted “a bylaw that restricts its premises liability in accordance with N.J.S.A. 2A:62A-13 to instances of willful, wanton, or grossly negligent conduct.” The judge ruled that the disrepair constituted standard negligence, rather than the willful, wanton, or gross negligence outlined in N.J.S.A. 2A:62A-14.

The plaintiff then argued that N.J.S.A. 2A:62A-14 had not been properly integrated into the association’s bylaws, which permitted the governing document to be “altered or repealed . . . by an affirmative vote of 51% or greater,” rather than the 2/3 (or 67%) vote required by N.J.S.A. 2A:62A-14. The plaintiff alleged that the presence of Article XII casted doubt on whether the liability protections permitted by N.J.S.A. 2A:62A-14 were properly integrated into the association’s bylaws.

Upon presentation of documents by the defendant, the judge ruled that at face value, the bylaws were adequately implemented. The defense presented a forty-two page document dated July 15, 1998 that was adequately endorsed by the attorney who prepared the papers as well as the association’s president and secretary. In light of the document, the judge ruled that N.J.S.A. 2A:62A-14 certainly appeared to have been properly voted into the association’s bylaws and that plaintiff—whom had been a resident of the association for seventeen years—had been effectively on “constructive notice of the bylaws’ content.”

Sanchez establishes the precedent that the plaintiff bears the burden of demonstrating inadequate amendment of the bylaws to include a liability limitation. As long a community association is able to establish that it implemented the liability protections of N.J.S.A. 2A:62A-14 by way of a 2/3 vote, the liability protection should stand. If nothing else, Sanchez highlights the essential nature of community association recordkeeping. Community associations, and their professional managers, must keep track of any changes in community bylaws and ensure that the mode of passage is consistent with the governing documents and statutory requirements.

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