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Briarglen II Condominium Association, Inc. v. Freehold

April 26, 2000


Before Judges Skillman, Newman and Fall.

The opinion of the court was delivered by: Newman, J.A.D.

Argued: March 7, 2000

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County.

This appeal raises the issue of whether N.J.S.A. 40:67-23.3 requires a municipality to either provide or reimburse for snow/ice removal, street lighting and trash removal to a qualified private community still under construction before the road dedication, the release of performance bonds, and the adoption of an appropriate resolution by the governing body. Even if N.J.S.A. 40:67-23.3 is construed to require reimbursement for such services, the question arises whether the municipality may delegate, by contractual agreement, the performance of such services, without reimbursement, to the developer of the condominium project. We conclude that N.J.S.A. 40:67-23.3 requires that the municipality either provide these municipal services or reimburse for the expenses incurred in performing them; a municipality may not avoid this statutory duty by contractually imposing this obligation on the developer of the project.

These are the relevant facts which are not in dispute. On December 5, 1994, defendant, Township of Freehold, entered into an agreement with K-Freehold Corp., Inc., the developer of the condominium project managed by plaintiff, Briarglen II Condominium Association, Inc. (Association or plaintiff). The developer's agreement (Agreement) was recorded in the Monmouth County Clerk's Office on December 13, 1994. On January 13, 1995, the Association was established by way of the execution and recording of a Master Deed. Individual deeds to condominium unit owners were executed and recorded thereafter.

The Agreement contained specific provisions concerning the responsibility to maintain the condominium's roadways, providing:

During the course of construction and up and until the time of final acceptance, Developer shall maintain, or shall be responsible for having others maintain, all roads, if any, within the subdivision and site plan, which maintenance shall include snow plowing, salting, sanding and repair. The Developer is aware that Section 6-6, Removal of Snow and Ice, of the revised General Ordinances of the Township of Freehold governs the Developer's performance. Developer agrees to comply with this Ordinance provision. In the event services are rendered by the Township for snow and ice control, reimbursement to the Township will be made from the inspection fee escrow account.

The date of final acceptance for the purposes of this Agreement is deemed to be the date upon which Developer is released from his performance bond, posts a maintenance bond and a resolution of acceptance pertaining to the required improvements is adopted by the governing body of the Township of Freehold. Developer shall also provide and pay for all street lighting which must be installed in the subdivision and site plan.

Pursuant to the terms of the Master Deed, the Association provides "municipal-type" services, including snow/ice removal, street lighting, and trash removal services, to its residents through the expenditure of assessment monies collected from unit owners. Plaintiff, its owners, and/or residents have never received reimbursement from defendant for the cost of said services. Plaintiff inquired as to why defendant was not providing these services or reimbursing plaintiff for the cost of same. Defendant advised plaintiff that "reimbursement would not commence until such time as the 'development' is 'accepted ... as complete.'"

Plaintiff's condominium project is still under construction. According to defendant, "[t]here are improvements which must be completed before the roadways within the condominium project can be accepted as meeting municipal standards[; and t]he Performance Bonds posted by the Developer for the improvements have not yet been released ...."

Defendant further advised plaintiff that it does not provide "municipal-type" services "in a single family home development until it meets all municipal standards and specifications." On December 22, 1998, plaintiff filed a complaint in lieu of prerogative writs against defendant. In the complaint, plaintiff alleged that defendant failed to provide snow/ice removal, street lighting, and trash removal services to the residents of the Association in violation of the United States and New Jersey Constitutions and the Municipal Services Act (Act), N.J.S.A. 40:67-23.2 to -23.8.

On March 19, 1999, plaintiff filed a motion for partial summary judgment, seeking a declaration that defendant's alleged failure and refusal to provide the aforementioned services or to reimburse plaintiff for the cost of same constituted a violation of the Act. Defendant filed a cross-motion for partial summary judgment, seeking an order dismissing Count Three of plaintiff's complaint which alleged violations of the Act.

Plaintiff's motion and defendant's cross-motion were heard on May 14, 1999. Plaintiff contended that defendant provides the aforementioned services to residents in the Township through the expenditure of monies collected and maintained in the general treasury of Freehold, but does not provide these services to plaintiff. Therefore, the Association, at its own cost, provides these services to its residents. According to plaintiff, pursuant to N.J.S.A. 40:67-23.3, once the condominium met the statutory definition of a "qualified private community," defendant's obligation to either provide the services or reimburse plaintiff for the cost of same was triggered.

Defendant noted that plaintiff's community is still under construction, and the performance bonds have not yet been released. According to defendant, its policy, which is applicable to both single family developments and condominium associations, is that roadways are not accepted until all improvements are completed and the performance bonds are released. Defendant asserted that, pursuant to N.J.S.A. 40:67-23.3, a municipality's obligation to either provide these services or reimburse a qualified private community for the cost ...

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