On appeal from the Superior Court of New Jersey, Law Division, Bergen County.
Approved for Publication February 29, 1996.
Before Judges Pressler, Keefe and A.a. Rodriguez. The opinion of the court was delivered by Pressler, P.j.a.d.
The opinion of the court was delivered by: Pressler
The opinion of the court was delivered by PRESSLER, P.J.A.D.
This litigation arises out of mutual misunderstandings between the owners of a condominium unit and the condominium association regarding the extent of the owners' control over their unit and its appurtenances and, conversely, the extent of the association's control over the activities of the unit owners and the manner in which that control must be exercised. More specifically, this dispute involves the common elements and limited common elements of the structure, raising the question of whether the condominium association is subject to the rule of reasonableness in considering owners' requests to make changes within their units that affect, but not materially, substantially, or significantly, the common elements or limited common elements. We hold that the association is so subject and that, as a matter of fact, the association here acted unreasonably in withholding permission from the unit owners to proceed with their heating and air conditioning upgrade. We consequently reverse the contrary judgment of the Law Division.
In January 1988, plaintiffs Josef and Ora Billig, closed title on Unit 22A, a condominium unit on the twenty-second floor of a new luxury high-rise condominium in Fort Lee known as Buckingham Towers. The purchase price was $900,000. They took their unit deed from the sponsor, defendant Buckingham Towers Associates, subject to the master deed, the offering plan, by-laws, rules and regulations, and the statute governing condominium ownership and management, N.J.S.A. 46:8B-1, et seq. Plaintiffs assumed occupancy in February 1988.
Like many of the other unit owners, plaintiffs had planned a number of internal renovations involving room partitions, electrical modifications, and floor coverings. They contracted for the work, and it was undertaken. They were also dissatisfied, from the outset of their occupancy, with the heating and air conditioning (HVAC) system in their apartment. It was, in their view, too noisy and inefficient. After retaining appropriate experts and contractors, they changed the system, disconnecting the existing equipment and installing their own. The installation involved placing a small compressor on each of their two balconies. The compressor stands below the balcony railing and is not visible from the exterior of the building. The installation also required, for each compressor, the drilling of two one-inch holes in the bottom of the hollow aluminum window frames in order to pass electrical wires and a freon tube to the compressors from the interior of the apartment. The holes were thereafter caulked. Duct work was also laid in the apartment's dropped ceiling. The expert testimony established beyond any factual dispute that the installation had no effect whatsoever on the structural integrity of the building, the windows, the window frames, or the balcony, or on the visible appearance of the balcony. It was also established that the electrical source within the unit, metered to the Billigs, was adequate to bear the electrical load of the new system and had no effect at all on the common electrical system. In addition, because the original heating and air conditioning system was of a parallel open loop design, the disconnection in plaintiffs' unit had no effect whatsoever on the functioning of the system in any of the other units or in the building as a whole. Finally, the compressors on the balcony apparently run sufficiently quietly as to constitute neither a nuisance, a bother, nor an annoyance to any other unit owners.
Plaintiffs' problems with defendant Buckingham Towers Condominium Association, the association to which the sponsor had turned over the building in June 1988, and with the association's building manager, defendant Paul Rance, began in September 1988. Insofar as we are able to determine from the voluminous record, the sponsor's vice president of construction, Fred DeFilippo, wrote to the president of the association, Ronald Stoppelman, on September 20, 1988, advising him that the work being done in plaintiffs' unit on the HVAC system had not been included in their filed plans. That was true. DeFilippo expressed his opinion that the HVAC work "may cause a serious impact to the building systems." He further opined that
The effect these modifications will have on the common elements of the building cannot be determined at present. It is our opinion that they may cause the guarantees and warranties of the building systems affected to be voided. More importantly, these modifications may cause interruption of these systems and annoyance to other neighboring units.
Consequently, DeFilippo recommended "that all work in unit 22A be stopped immediately and a thorough review of the work done to date be reviewed to determine the impact of these modifications."
A day or two later, Stoppelman and another member of the association's board of directors met with plaintiffs in their unit to inspect the work, which was then nearing completion, and to discuss the situation. Although Stoppelman and Mr. Billig testified divergently regarding the tone and nuances of their meeting, they did concur that Billig agreed to write to the board and requested its permission to proceed, Stoppelman having told Billig that the work required association approval because it constituted an alteration to common and limited common elements. Billig wrote such a letter to the board on September 23, 1988, departed the following day for an extended trip abroad, and did not return until the end of October. During his absence, Rance stopped the work by refusing entry to plaintiffs' contractors.
While plaintiffs were away, the board's executive committee considered the matter, noting DeFilippo's concern about the HVAC warranties and further noting that "it was advised that an injunction must be served upon [plaintiffs] in 22A in order to correct this." The source of that advice is not noted. The minutes of the board's ensuing October 13, 1988, meeting include Rance's manager's report, which contains this notation:
The unit owner of 22A has severely altered some of the major mechanical and plumbing elements of the building without obtaining permission from the Board of Directors. The original plans submitted to the Board of Directors was for some very minor changes to non structural walls. Due to the magnitude of the changes, the Board of Directors will be instituting and [sic] injunction to stop the work in progress and an order for this unit owner to restore the unit to its original system. Attorney for Condominium Association will be instituting suit with sponsor's attorney as co-counsel.
The minutes do not indicate that this item of the manager's report was discussed or directly acted upon. Moreover, it is ambiguous as to whether the reference to both the board and the board's attorney instituting suit was intended by the manager to be informative to the board or reflective of a decision reached by the board. Since there is no indication in the minutes that the board itself considered or voted upon the matter, it appears likely that the manager was simply advising the board of a fait accompli, which the board accepted. In any event, before the association filed suit, plaintiffs commenced this action in November 1988 by order to show cause seeking a variety of relief, including the right to complete the HVAC work. They also sought damages against the association and the sponsor. The association counterclaimed, seeking an injunction against the work, an order requiring plaintiffs to restore the ...