Commercial Condominiums & Community Associations

The core structure of a condominium—shared ownership of common areas with individual unit ownership—remains the same in both commercial and residential settings. However, there are important legal distinctions:

• Purpose and Use: Commercial condominiums are designed for office, retail, industrial, or mixed-use purposes, whereas residential condominiums are for living spaces. This affects everything from noise ordinances to parking and signage.
• Governing Documents: The declaration and bylaws for commercial condos typically include different operational rules, restrictions, and responsibilities tailored to business use.
• Regulatory Oversight: Commercial condos may be subject to additional zoning and land use regulations, environmental laws, and commercial tenant protections.
• Liability and Insurance: Because of the nature of business operations, commercial associations may require broader insurance coverage and risk mitigation strategies.

Our attorneys work with boards and developers to draft, review, and enforce governance documents that reflect the distinct legal needs of commercial associations.

Disputes between boards and owners (or their commercial tenants) are common, and if left unresolved, can disrupt business operations and impact property value. Common disputes include:

• Enforcement of use restrictions or architectural guidelines
• Disagreements over assessments, fines, or maintenance obligations
• Conflicts regarding the board’s authority or procedures

Most governing documents require that disputes go through internal resolution processes, such as formal hearings or mediation, before litigation can occur. Some states also require alternative dispute resolution (ADR) prior to filing in court.

At Scarinci Hollenbeck, we help boards and owners navigate these conflicts by:

• Reviewing governing documents to determine available remedies
• Assisting with formal notices or responses
• Representing clients in mediation, arbitration, or litigation if needed

Our goal is to resolve issues efficiently while preserving relationships and protecting the long-term interests of the community.

Boards of directors or trustees for condominium and community associations serve in a fiduciary capacity, meaning they are legally required to act:

• In good faith
• With the care of a reasonably prudent person
• In the best interests of the association as a whole

In New Jersey, the Condominium Act (N.J.S.A. 46:8B-1 et seq.) governs how associations must operate. In New York, associations fall under Real Property Law Article 9-B (the Condominium Act) and other municipal codes. Key responsibilities include:

• Properly managing and disbursing association funds
• Maintaining common areas and shared infrastructure
• Enforcing rules and bylaws consistently
• Providing adequate notice of meetings and decisions
• Keeping accurate and accessible records

Failing to meet these duties can expose board members to personal liability. We assist boards with legal compliance, governance training, and documentation to reduce exposure and uphold fiduciary standards.

Yes. Governing documents—such as the declaration, bylaws, and rules and regulations—can typically be amended, but the process is governed by the original documents and applicable law. In most cases, amendments require:

• Advance notice to all owners of the proposed change
• Approval by a supermajority vote, often 67% or more
• Filing and recording of the amended documents with the county clerk or registrar

Associations often amend documents to reflect changes in law, correct outdated provisions, update use restrictions, or improve governance. However, improper amendments—or those that conflict with state law or constitutional rights—may be unenforceable.

We assist associations in drafting legally sound amendments and guiding them through the approval and recording process.

Unpaid assessments can significantly impact an association’s ability to meet its budgetary obligations. Associations have several legal remedies, including:

• Late fees and interest on overdue balances
• Liens placed against the owner’s unit (which may accrue priority over some other debts)
• Collection lawsuits to recover unpaid amounts
• Foreclosure proceedings, where allowed by state law
• Withholding privileges, such as voting rights or access to amenities (if permitted by the bylaws)

Our attorneys help associations enforce these rights in a manner that is legally compliant and tactful, recognizing the importance of maintaining goodwill while protecting the community’s financial health.

While both are forms of common interest communities, there are key differences in how they are structured and regulated:

• Commercial condominium associations are often governed by state condominium acts, but the content of their bylaws and declarations focuses on business needs, such as hours of operation, signage, and use restrictions.
• Homeowners’ associations (HOAs) typically regulate detached or attached residential units in planned communities, and they have broader authority over landscaping, exterior maintenance, and community standards.

Commercial associations may also interact more frequently with local business licensing laws, commercial leases, and zoning compliance issues.

Scarinci Hollenbeck offers legal support specifically tailored to the operational and regulatory demands of commercial real estate associations.

Boards that do not follow their governing documents or violate state law can be exposed to legal claims. Common risks include:

• Selective enforcement of rules or architectural controls
• Conflict of interest in awarding contracts or approving expenses
• Failure to maintain the premises, resulting in safety hazards or liability claims
• Improper handling of association funds or records
• Retaliation or discrimination claims related to enforcement actions

We help minimize risk by reviewing governance documents, advising on compliance procedures, and defending boards when claims arise.

Yes, but only to the extent that the governing documents and applicable laws allow. Boards may enforce:

• Use restrictions (e.g., prohibiting certain types of businesses)
• Hours of operation, noise levels, or odor-producing activities
• Exterior modifications, such as signage or window displays

However, limitations must be:

• Clearly stated in the bylaws or declaration
• Consistently enforced
• Compliant with local zoning and land use laws

If a restriction is overly broad or applied arbitrarily, it may be subject to legal challenge. We help boards enforce lawful restrictions and amend or clarify language where necessary.

Commercial unit owners have legal rights to:

• Access records, including financial reports, board minutes, and governing documents
• Challenge decisions that violate the bylaws, exceed board authority, or are made in bad faith
• Vote on major decisions, such as amendments or capital expenditures (depending on the governing documents)
• Seek relief through mediation, arbitration, or litigation, particularly for breaches of fiduciary duty or discriminatory practices

We represent both boards and unit owners in navigating these rights and resolving disputes, always seeking cost-effective outcomes that protect property value and business operations.

We serve as long-term legal counsel for commercial condominium and community associations, offering proactive and responsive legal services that evolve with your community’s needs. Our support includes:

• General counsel services, including board governance and operational guidance
• Document drafting and amendment, from bylaws to rules and contracts
• Dispute resolution and litigation, whether internal or involving third parties
• Contract and vendor management, including construction, repair, and service contracts
• Compliance monitoring, with changes in state statutes and municipal regulations

We understand the unique pressures faced by associations and business unit owners alike. Our attorneys are here to offer clear, accessible legal advice that empowers boards and preserves community stability.