Condominium Docs Need Authorize Post-Judgment Collection Fees

Homeowners’ associations in New Jersey should review their governing documents in light of a recent decision by the Appellate Division of the New Jersey Superior Court.

Homeowners’ associations in New Jersey should review their governing documents in light of a recent decision by the Appellate Division of the New Jersey Superior Court. In Sylvan Glade Condominium Association v. Avi Braude, the appeals court affirmed a lower court decision holding that the condominium association was not entitled to post-judgment collection costs because its governing documents did not expressly provide for them.

The Facts of the Case

Plaintiff, Sylvan Glade Condominium Association, d/b/a Mapleleaf Park Association, Inc., obtained a final default judgment against defendant, Avi Braude, a unit owner in the plaintiff’s condominium, after he failed to pay his monthly fees. The New Jersey condominium association later sought to amend the judgment to include an award of post-judgment attorneys fees, which were incurred exclusively in connection with its efforts to collect on the judgment.

In support of it motion, the plaintiff cited its condominium documents, which entitled it to collect “reasonable attorneys fees” against a delinquent unit owner, New Jersey’s Condominium Act, and the Appellate Division’s holding in Tanksley v. Cook, which held that New Jersey’s Consumer Fraud Act entitled plaintiff to an award of post-judgment attorneys fees.

The defendant opposed the motion. He argued that it would be unfair to add additional post-judgment attorneys fees to the amount that was entered as part of the final judgment because he had already confirmed with plaintiff’s attorney the amount necessary to satisfy the judgment, borrowed money, and in fact “redeem[ed] the property” by having “paid and satisfied in full” the judgment.

 The Trial Court’s Decision

Judge E. David Millard denied the motion. In so ruling, the judge rejected plaintiff’s reliance on Tanksley, distinguishing a consumer fraud claim from an attempt by a condominium association to collect post-judgment attorneys fees.

With regard to the Condominium Act, judge Millard agreed that the statute allows for an association to collect attorneys fees. However, citing the Appellate Division’s decision in Hatch v. T & L Associates, he concluded that without the condominium documents expressly providing for post-judgment collection fees, the judgment could not be amended. As Judge Millard explained:

I’m not saying that a . . . Condo Association, can’t collect post-judgment fees, attorney fees. What I am saying is you need to spell it out in your Condo Association [documents,] the notice that people get when they join the Association so that they know that they are potentially on the hook for that, if they don’t make the payment.

I’m not satisfied that you’ve done that. The generic language in the Condo Association [documents] does not include or would not put somebody on notice . . . of such post-judgment attorneys fees.

 The Appellate Division’s Decision

The appeals court affirmed the trial court’s ruling in a per curium decision, which relied almost exclusively on the reasoning of the judge below. “We affirm, finding plaintiff’s arguments to be without sufficient merit to warrant further discussion in a written opinion… essentially for the reasons stated by Judge Millard in his oral decision,” the panel stated.

The Appellate Division added only the following: “It was not disputed … that the condominium documents did not mention ‘post-judgment’ collection costs, including attorneys fees.”