The following is an excerpt from the Legend Hills Condominium Association, Inc. Offering Plan, which includes:
- Rights & obligations of Unit Owners
- Rights & obligations of Board of Directors
N. RIGHTS AND OBLIGATIONS OF UNIT OWNERS
The Condominium’s Master Deed, By-Laws and initial Rules and Regulations (collectively sometimes referred to herein as the “Condominium Documents”) as well as any restrictions contained therein, are to be considered as restrictions on each Unit. In accordance with the Master Deed, Unit Owners are required to comply with all of the terms of the Condominium Documents and such other rules and regulations as may be adopted from time to time by the Association. Failure to comply with the provisions of the Condominium Documents will be grounds for imposition of fines and/or seeking injunctive relief against a Unit Owner.
PURCHASERS ARE URGED TO CAREFULLY READ THE MASTER DEED, BYLAWS AND INITIAL RULES AND REGULATIONS CONTAINED IN PART II OF THE PLAN AS THESE DOCUMENTS SET FORTH IN DETAIL ALL RESTRICTIONS ON THE USE, SALE OR LEASE OF UNITS, THE OBLIGATIONS OF UNIT OWNERS WITH REGARD TO MAINTENANCE, REPAIR AND/OR 40 REPLACEMENT IN OR TO THEIR UNITS AND THE CONDOMINIUM’S COMMON ELEMENTS AND LIMITED COMMON ELEMENTS AND ALL PROHIBITED ACTIVITIES. THIS PART OF THE PLAN CONTAINS SUMMARIES OF THESE DOCUMENTS AND IS NOT INTENDED TO BE COMPREHENSIVE OR SERVE AS A SUBSTITUTE FOR THE ACTUAL DOCUMENTS.
1. Use of Units
In order to provide for congenial occupancy and for the protection of the value of the Units, the By-Laws provide that the use of the Units shall be restricted to and be in accordance with the following provisions:
a. The Units shall be used for residences only and for any legal ancillary uses which do not interfere with the residential character of the Property and the use and quiet enjoyment of the other Unit Owners of their Units, except that while the Sponsor or its designee owns any Unit, it shall have the right to use such Unit for sales offices as models.
b. In the event of a transfer of a Unit to a corporation, the corporation’s ownership may be conditioned by requiring that all present or future occupants shall be disclosed to the Condominium Board.
c. No immoral, improper, offensive, commercial or unlawful use shall be made of the property or any part thereof and all valid laws, zoning ordinances and regulations of all governmental bodies having jurisdiction thereof, relating to any portion of the Property shall be complied with and violations thereof shall be remedied by and at the sole expense of the respective Unit Owners or by the Condominium Board, whichever shall have the obligation to maintain or repair such portion of the Property.
d. The Common Elements shall be used only in connection with the services and facilities for which they are reasonably suited and capable and which are incidental to the use and occupancy of Units. No Unit Owner shall make an addition, alteration, improvement or change in or to any Common Element without the prior written consent of the Condominium Board and the holders of first mortgages on the affected Units, if their approval is required.
e. Rules and Regulations concerning the use of the Units may be promulgated and amended from time to time by the Condominium Board provided that copies of such Rules and Regulations are furnished to each Unit Owner prior to the time that they become effective. The initial Rules and Regulations are set forth in the Master Deed, contained in Part II, Exhibit D-5 of the Plan. 41
2. Sale or Lease of Units by Unit Owners
Each Unit Owner will have the right to sell his or her Unit without undue restrictions if prior to the closing the Condominium Board has been notified and given a copy of the Contract for Sale and other pertinent information requested and prior to or simultaneously with the closing any arrears in the payment of Common Charges are satisfied in full.
No portion of a Unit (other than the entire Unit) may be leased; however, the entire Unit may be leased provided the Condominium Board has been notified of the proposed lessee, has received a completed application to lease together with applicable fees and is satisfied with the financial condition of the proposed lessee and has approved the form of the lease. It will be the responsibility of the Unit Owner that the lessees comply with all of the obligations of the Unit Owner and all of the rules relating to the use of the unit. No transient tenants may be accommodated in any Unit, and no subleasing will be permitted. Further restrictions on sales and leases of Units may be imposed in the future by the Sponsor and others. However, without the unanimous consent of the Unit Owners, no By-law or other rule may be imposed limiting the right of a Unit Owner to lease his or her Unit by reason of his or her not having owned the Unit for a sufficient period of time.
The restrictions upon the sale and lease of Units set forth in this section shall not apply to Units owned by Sponsor or its designees or to a mortgagee acquiring title in foreclosure or by deed in lieu of foreclosure.
3. Mortgaging of Units by Unit Owners
Each Unit Owner has the right to mortgage his or her Unit, provided that the Condominium Board is notified in writing of the making of the mortgage and receives a conformed copy of the mortgage and note, and the mortgagee is an institutional lender, the Sponsor or the Seller of the Unit, or a relative of the Unit Owner.
4. Liens for Nonpayment of Common Charges
Under the provisions of Section 21 the Condominium Act (N.J.S.A.46:8B21) the Condominium Board, on behalf of the Unit Owners, will have a lien on each Unit for unpaid Common Charges assessed by the Condominium Board together with interest thereon and, if authorized by the Master Deed or the By-Laws, reasonable attorney fees. Pursuant to the provisions of law, the recorded liens for unpaid common charges covering a period of up to six (6) months will enjoy a priority over all other existing liens (including purchase money mortgages) except those liens for unpaid municipal taxes, Federal tax liens, and mortgages already in foreclosure. The Condominium lien need not be limited to a six month period; however the portion of the lien relating to unpaid common charges for a period exceeding six (6) months will not be 42 entitled to the aforementioned prionty. Any lien for unpaid Common Charges against a Unit shall be effective from and after the filing of a notice thereof in the office of the County Clerk in Bergen County, and until all sums secured thereby, with the interest accrued thereon, shall have been fully paid or until six years from the date of filing (unless foreclosure of such lien is started within such six year period), whichever may be earlier. The priority of the Condominium lien expires on the first day of the sixtieth (60th) month following its recording as aforesaid. Only one lien claim having priority may be filed against a condominium unit within a sixty (60) month period commencing with the date of filing of the first lien for which a priority is claimed. Liens for unpaid assessments may be foreclosed by suit brought in the name of the Condominium Association in the same manner as the foreclosure of a mortgage on real property. The Condominium Association shall have the power, unless prohibited by the Master Deed or By-Laws, to bid in the amount of its lien against the Unit at foreclosure sale, and to acquire, hold, lease, mortgage and convey the Unit. The Condominium Association may also file suit to recover a money judgment for unpaid assessments without waiving its lien securing the same.
5. Obligation to Pay Common Charges
Each Unit Owner will be obligated to pay his or her proportionate share (according to his or her Common Interest) of the Common Charges. The Common Charges, which will be determined by the Condominium Board, will include the expense of maintenance, repair, replacement, administration and operation of the Property. Notwithstanding the foregoing, title to each unsold Unit will remain in the Sponsor, or its designee, until the Unit is sold and a deed delivered to the Purchaser. From and after the date of the first closing of title to a Unit, the Sponsor shall be responsible for and pay only the amount of Common Charges assessed by the Condominium Board with respect to Units owned by Sponsor regarding the budget items listed in Part II, Exhibit H to this Plan up to an amount which will enable the Condominium to meet its budgeted costs (less items for operating serves and serve for replacements) and which will keep the Condominium in operation such that in any given year the entirety of any item not listed in Part II, Exhibit H shall be added to the Common Charges payable by Unit Owners other than Sponsor. Notwithstanding anything contained herein, (i) the Sponsor shall be responsible, according to the Common Interest of the Units owned by it, for any items which are added to the budget pursuant to the requirements of any municipal or other law or formal orders of any other governmental agency up to an amount which will enable the Condominium to meet its budgeted costs and which will keep the Condominium in operation and (ii) in no event shall the level of services to Unit Owners decrease while the Sponsor owns twelve (12) or more Units. As used in this paragraph “Sponsor” shall refer to Sponsor or any designee of Sponsor.
The Condominium Board will prepare and furnish its budget to the Unit Owners (and their mortgagees if requested) from time to time and at least once a year. Based upon such budget and any modifications thereof approved by the Condominium 43 Board the Unit Owners will be charged for the cost of the operation of the Condominium in accordance with their percentage of interest in the Common Elements. Each Unit Owner shall be advised promptly after the adoption of each budget of the amount of Common Charges and expenses payable for the period covered by such budget.
Notwithstanding anything to the contrary contained herein, without the consent of 66-2/3 % of the Unit Owners voting thereon other than Sponsor, the Condominium Board may not in any year (i) increase the Common Charges by more than 15% over the previous year’s Common Charges or (ii) make an expenditure over $5,000 for anyone item which was not included in that year’s budget, unless such increase or expenditure is required by law or is necessary to maintain the level of services to Unit Owners.
In addition to the normal operating expenses of the Condominium, the budget shall (subject to restrictions set forth above), provide for reserves, working capital and other sums required to properly and completely manage the affairs of the Condominium. A Reserve for Replacements fund will be established as required by law.
The Condominium Board may commence the collection of Common Charges upon the closing of title to the first Unit or thereafter in such amount as will be necessary to carry out the duties of the Condominium Board, as set forth in this Offering Plan. Each Unit Owner will be responsible to pay the Common Charges allocable to his or her Unit monthly in advance on the first day of each month, commencing with the first day of the first month following closing of title to his or her Unit. Common Charges assessed during the month in which title closes shall be adjusted between the Purchaser and the Sponsor as of the closing date, if collection of Common Charges has commenced on or before said date.
6. Termination of Liability of Unit Owners for Common Charges.
The liability of each Unit Owner for the payment of the Common Charges thereafter assessed or becoming due against his or her Unit, shall terminate upon sale, transfer or other conveyance of such Unit made by him or her in accordance with the applicable provisions of the By-laws. In addition, any Unit Owner may, subject to the terms and conditions specified in the By-laws, convey his or her Unit together with the appurtenant interest to the Condominium Board or its nominee on behalf of all other Unit Owners, without any compensation, and in such event shall become exempt from Common Charges thereafter assessed. A Purchaser of a Unit shall be required by the Condominium Board to pay unpaid Common Charges assessed against the Unit prior to his or her acquisition, except that a mortgagee acquiring title to the mortgaged Unit or a Purchaser at a foreclosure sale shall not be liable for such charges and the Unit shall not be subject to a lien for the payment of the Common Charges assessed prior to the acquisition of title thereto by a mortgagee or Purchaser at a foreclosure sale. However, 44 such mortgagee or Purchaser at a foreclosure sale shall be liable for payment of all Common Charges from and after the date of his or her acquisition of title. In the event a lien for unpaid Common Charges is foreclosed by the Condominium Board, and the proceeds of the foreclosure sale shall not be sufficient for the payment of such unpaid Common Charges or if a Unit is acquired by a mortgagee or Purchaser in foreclosure, the unpaid balance shall be charged to all Unit Owners as a common expense. If there is any surplus remaining from the proceeds of a foreclosure sale after payment of the indebtedness, unpaid Common Charges and all the expenses of the sale, the surplus shall be paid to the Unit Owner.
7. Repairs, Replacement and Maintenance of Units and Common Elements
Generally, all painting, decorating, maintenance, repairs and replacements, whether structural or non-structural, ordinary or extraordinary, in or to any Unit including the Limited Common Elements appurtenant thereto (but excluding the Common Elements contained therein), will be made by the Unit Owner at the Unit Owner’s sole cost and expense, and in or to the Common Elements (other than to the Limited Common Elements appurtenant to a particular Unit) will be made by the Condominium Board and the cost thereof will be a Common Expense, unless necessitated by the negligence, misuse or neglect of a Unit Owner or tenant, licensee or invitee of the Unit Owner, in which case the responsibility for repair shall still be borne by the Condominium Board but the expense will be assessed against the Unit Owner at fault. Failure of the Unit Owner to pay the expense shall be treated in the same manner as failure to pay Common Charges and may result in the filing of a lien against the Unit.
The Condominium Board of and/or any agent of the Condominium Board shall have the right of access (which right shall be an easement) to inspect any Unit for the purpose of making any repairs or replacements any of the Common Elements and/or Limited Common Elements contained in such Unit or appurtenant to such Unit, or elsewhere in a Building, or to remedy any condition which would result in damage to any other Unit or to the Common Elements, or which would violate the provisions of any mortgage covering another Unit, or for the purpose of removing violations or curing defaults by Unit Owners, or for the purpose of complying with any laws, orders, rules or regulations of any governmental body having jurisdiction there over. Such right of access shall be exercised in such manner as will not unreasonably interfere with the use for which the Unit was intended. No prior notice shall be required in the event of an emergency if the Condominium Board shall determine that action is immediately necessary for the preservation or safety of the Property or its residents or to avoid the suspension of any necessary service.
If a Unit Owner fails to maintain or repair his or her Unit or the Limited Common Elements appurtenant thereto, and the Condominium Board, at its sole discretion, deems such failure to be detrimental to the Association or to the Unit 45 Owners, the Association shall have the right to effect such maintenance or repair and assess the Unit owner the reasonable expense thereof.
8. Insurance on Individual Units
Unit Owners are permitted and encouraged to carry liability and casualty insurance covering occurrences in their Unit for their own benefit at their own expense, provided such policies contain waivers of subrogation and further provided that the liability of the carriers issuing insurance procured by the Condominium Board shall not be affected or diminished by reason of any Unit Owner’s insurance. A unit owner’s lender may require such insurance coverage as a condition in a mortgage commitment.
The Condominium’s insurance will not cover loss with respect to the personal or other property of individual Unit Owners contained within their Units, nor any liability incurred by a Unit Owner for injuries or accidents occurring within his or her Unit or the Limited Common Elements appurtenant thereto. Unit Owners are advised to obtain additional insurance at their own cost to cover such risks as: fire and casualty losses to Unit contents, replacements, additions, upgraded fixtures, improvements and other property owned wholly by the Unit Owners, as well as liability coverage for occurrences within the Unit or on the Limited Common Elements. Maintenance of individual insurance may also eliminate the involvement in any dispute as to determination and establishment of liability between the individual Unit Owner and the Condominium Association.
9. Additions, Alterations and Improvements by Unit Owners
No Unit Owner may make any structural addition, alteration, subdivision or improvement in his or her Unit without the prior written approval of the Condominium Board. Nothing herein shall be construed to prohibit the reasonable adaptation of any unit for handicapped use. The Condominium Board may require as a condition of its approval for any alteration that the Unit Owner (other than the Sponsor, or its designee) post a security deposit of at least $1,000.00 to assure completion of the alteration in accordance with the plans approved by the Condominium Board or the governmental agency having jurisdiction and to correct or repair any damage to the Common Elements as a consequence of such alteration. No application shall be filed with any department of the State of New Jersey or with any other governmental authority for a permit covering an addition, alteration or improvement to be made in a Unit, unless approved in writing in advance by the Condominium Board, without, however, incurring any liability on the part of the Condominium Board or any member thereof, to any contractor, subcontractor, material man, architect or engineer, by reason of consent to such addition, alteration or improvement or to any person having any claim for injury to person or damage to Property arising there from. The provisions of this paragraph shall not apply to any Unit owned by the Sponsor or its designee.
Non-structural and non-mechanical alterations and improvements to Units that do not affect the exterior of the Buildings, mechanical systems of the Buildings or the value of other Units may be made by a Unit Owner without prior approval of the Condominium Board.
10. Meetings of Unit Owners
Meetings of Unit Owners shall be held at least once during each fiscal year. Special meetings of Unit Owners may be held from time to time pursuant to the By-Laws.
11. Compliance with By-laws and Rules and Regulations
Each Unit Owner must comply strictly with the Condominium Documents and the rules, regulations, resolutions and decisions adopted pursuant thereto. Failure to comply with the same shall be grounds for action to recover sums due, for damages or injunctive relief, or both, by the Condominium Board or in a proper case, an aggrieved Unit Owner. In the case of flagrant or repeated violation, the Condominium Board may ask the offending Unit Owner for sufficient surety to ensure future compliance or bring suit at law or in equity to remedy the damages brought about by such violations.
O. RIGHTS AND OBLIGATIONS OF BOARD OF DIRECTORS
1. Directors, Election, Number, Term, Qualifications
All members of the Condominium Board (other than the designees of the Sponsor) shall be Unit Owners or spouses of Unit Owners, mortgagees of Units, partners or employees of a partnership owning a Unit or a mortgage covering a Unit, shareholders, officers, directors or employees of corporate owners or corporate mortgagees of Units, or fiduciaries or officers or employees of fiduciaries who are Owners or mortgagees of Units.
The term of office of the members of the Condominium Board shall normally be one (1) year or until their successors are elected, except that the terms of office of the members elected at the aforementioned first meeting of the Unit Owners shall be fixed at one, two or three years or until their successors are elected. At the expiration of the initial term of office of each member of the Condominium Board, his or her successor shall be elected to serve for a term of one (1) year or until his or her successor is elected. As a result, the terms of each of the members of the Condominium Board will expire each year or when their successors are elected.
At the regular or special meeting of Unit Owners, anyone or more of the members of the Condominium Board, other than members appointed by Sponsor or its designee, may be removed with or without cause by a majority of the Unit Owners (as 47 defined in the By-Laws), and a successor may then and there or thereafter be elected to fill the vacancy thus created, provided notice of such proposed removal was given to the Condominium Board member and in the notice of the meeting. Any member of the Condominium Board appointed by Sponsor or its designee may only be removed by Sponsor or its designee for any reason and by a majority of the Unit Owners with Sponsor’s consent for cause. Any member of the Condominium Board whose removal has been proposed shall be given an opportunity to be heard at the meeting.
2. Powers and Duties of the Board of Directors
The Condominium Board shall have the powers and duties necessary for or incidental to the administration of the affairs of the Condominium except those which by law or by the Master Deed or By-Laws may not be delegated to the Board of Directors.
Such powers and duties of the Condominium Board include, but are not limited to the following:
a. Determining [he Common Expenses, assessing and collecting the Common Charges, employing and dismissing the personnel, maintaining bank accounts;
b. Purchasing or leasing Units in the name of [he Condominium Board on behalf of all Unit Owners, provided however, that no purchase of units shall occur while the Sponsor shall control the Board of Directors;
c. Selling the same;
d. Obtaining of insurance for the Property, including the Units, pursuant to the provision of Article V of the By-Laws;
e. Making of repairs, additions and improvements to or alterations of the Property;
f. Borrowing money on behalf of the Condominium, but not In excess of $10,000 without the consent of 66-2/3 % of the Unit Owners;
g. Levying fines against Unit Owners for violations of the rules and regulations governing the operation and use of the Property, and
h. Adjusting and settling claims under insurance policies obtained pursuant to Article V, Section 2 of the By-Laws.
Notwithstanding anything to the contrary contained in the By-Laws, so long as the Sponsor or its designee shall continue to own one (1) or more of the Units but in no event longer than three (3) years from the date of conveyance of the first Unit, the 48 Board of Directors may not do certain acts detrimental to the Sponsor’s ability to sell its units without the Sponsor’s prior written consent.
3. Officers
The principal officers of the Condominium shall be the President, Vice President, Secretary and the Treasurer, all of whom shall be elected by the Board of Directors. All officers must be Unit Owners. The President and the Vice-President must be members of the Condominium Board as well. The Condominium Board may appoint such other officers as in its judgment may be necessary.
The President shall be the chief executive officer of the Condominium. He or she shall preside at all meetings of the Unit Owners and the Condominium Board, and shall have general powers and duties such as the power to appoint committees from among the Unit Owners from time to time as he or she may in his or her discretion decide is appropriate to assist in the affairs of the Condominium. The Vice-President shall have the powers and responsibilities of the President in the event the President is out of town or is otherwise unavailable or unable to act.
The Secretary shall keep the minutes of all meetings of Unit Owners. He or she shall have charge of such books and papers as the Condominium Board may direct and shall, in general perform all the duties performed by a secretary of a corporation organized under the Business Corporation Law of the State of New Jersey.
The Treasurer of the Condominium shall have the responsibility for Condominium funds and shall be responsible for keeping full and accurate financial records and books of account showing all receipts and disbursements, and for preparation of all required financial data for the Condominium. He or she shall be responsible for the deposit of all moneys and other valuable effects in the name of the Condominium Board or their agents in such depositories as may from time to time be designated by the Condominium Board. He or she shall, in general, perform all duties performed by a treasurer of a corporation organized under the Business Corporation Law of the State of New Jersey.
The officers of the Condominium shall be elected annually by the Condominium Board at the organization meeting of each new Condominium Board and shall hold office at the pleasure of the Condominium Board.
All agreements, contracts, deeds, leases, checks and other instruments of the Condominium shall be executed by any two officers of the Condominium or by such other person or persons as may be designated by the Board of Directors.
4. Liability of Condominium Board, Officers and Unit Owners
In order to limit the liability of the Unit Owners and the members of the Condominium Board and the managing agent, any contract or other commitment made by the Condominium Board shall state that it is made by the Condominium Board or the Managing Agent, as the case may be, only as agent for the Unit Owners, and that the members of the Condominium Board or the Managing Agent, as the case may be, shall have no personal liability on any such contract or commitment, and that the liability of any Unit Owner on any such contract or commitment shall be limited to such proportionate share of the total liability thereunder as the Common Interests of such Unit Owner bears to the aggregate Common Interests of all Unit Owners. Neither the Condominium Board nor any officer of the Condominium shall have any liability to the Unit Owners for errors of judgment, negligence or otherwise, except for willful misconduct or bad faith. The Unit Owners shall severally indemnify and hold harmless the members of the Condominium Board and the officers of the Condominium against any liability or claims except those arising out of the bad faith or willful misconduct of the members of the Condominium Board or the officers of the Condominium, but the liability of any Unit Owner on account of such indemnification shall be limited to such proportionate share thereof as the Common Interests of such Unit Owner bears to the aggregate Common Interests of all Unit Owners.
5. Vote of Unit Owners
At all meetings of Unit Owners each Unit Owner shall be entitled to cast one vote either in person or by proxy, with respect to all matters involving the affairs of the Condominium requiring the vote of Unit Owners. In all elections for members of the Condominium Board, Unit Owners shall have one such vote for each director to be elected.
6. Reports to Unit Owners
All Unit Owners will receive annually, ninety (90) days after the end of each fiscal year if then available, an annual report of the receipts and expenditures of the Condominium, audited and prepared by an independent certified public accountant. Unit Owners will also receive notice of the annual Unit Owners’ meeting. The Condominium Board will be required to keep detailed records of actions taken by the Condominium Board and to keep detailed, accurate records in chronological order, of the receipts and expenses arising from operating the Condominium. Such records and vouchers authorizing payments shall be available for examination by Unit Owners at convenient weekday hours.
7. Units Acquired or Leased by Condominium Board
The Condominium Board, with the approval of a majority of the Unit Owners (as defined in the By-Laws) may purchase or lease a Unit from a Unit Owner desiring to sell or lease it to the Board, or acquire a Unit at a foreclosure or other 50 judicial sale. If the Condominium Board does not have sufficient funds for the purchase or lease of a Unit which has been approved by a majority of the Unit Owners, the Board may either borrow the funds or assess the Unit Owners therefore in proportion to their respective Common Interests.
All Units acquired or rented by the Condominium Board or its designee shall be held by them on behalf of all Unit Owners in proportion to their respective Common Interests, and the votes appurtenant to the Units so acquired may be voted by the Condominium Board, or its designee, at all meetings of the Unit Owners, except that such votes may not be cast for the election of members of the Condominium Board.
8. Repair or Restoration after Fire or Other Casualty
In the event the Buildings or anyone or more or any part thereof is damaged or destroyed by fire or other casualty (unless such damage or destruction shall give a Unit Owner a lien or a right of partition as provided by the Condominium Act of the State of New Jersey), the Condominium Board, using the proceeds of insurance, if any, will, except as set forth below, arrange for the prompt repair and restoration thereof (including each Unit, and any kitchen or bathroom fixtures initially installed therein and partitions, floor and ceilings within the Unit, but excluding fixtures, furnishings, appliances, decorations or other personal property not constituting a part of such Unit), and the Condominium Board shall disburse the proceeds of all insurance policies to the contractors engaged in such repair and restoration in appropriate progress payments. If the insurance proceeds are insufficient to cover the cost of repairs or restoration, Unit Owners may be assessed for deficits in such proceeds as more fully set forth in the ByLaws. Also as more fully explained in the By-laws, any surplus insurance proceeds shall be paid to all Unit Owners in proportion to their Common Interests, except that no payment shall be paid to a Unit Owner out of said Unit Owner’s share of such funds, until such amounts have been paid as may be necessary to satisfy in full unpaid liens on said Unit.
If, as the result of damage to, or destruction of the Buildings by fire or other casualty, the Property becomes subject to an action for partition at the suit of any Unit Owner or lienor as if owned in common, in accordance with the provisions of the Condominium Act of the State of New Jersey, the Property will not be repaired and the net proceeds of sale, together with the net proceeds of insurance policies shall be distributed by the Condominium Board as the Insurance Trustee among all the Unit Owners in proportion to their respective Common Interests, after first paying out of the share of each Unit Owner the amount of any unpaid liens on his or her Unit, in the order of the priority of such liens.
9. Termination of Condominium
The Condominium shall continue (unless terminated by casualty loss as 51 provided by law or by condemnation as described in the By-Laws), until such time as the Property shall be withdrawn from the provisions of the Condominium Act as a result of the vote of at least 80% in number and in Common Interest of the Unit Owners (and of the holders of first mortgages on Units, if their approval is required). At such time the Property shall be subject to an action for partition by any Unit Owner or any lienor as if owned in common and the net proceeds of the sale resulting there from shall be divided among all Unit Owners in proportion to their respective interests in the Common Elements, after first applying the share of the net proceeds of such sale otherwise payable to each Unit Owner, to the payment of any liens on his or her Unit in the order of priority of such liens.
10. Insurance
The Condominium Board will be obligated to obtain and maintain, to the extent obtainable and to the extent determined by the Condominium Board to be appropriate or relevant: (i) fire insurance, with extended coverage, vandalism and malicious mischief endorsements insuring the Buildings, including all of the Units and the bathroom and kitchen equipment initially installed therein and the partitions, floors, ceilings within the Units (but not including any wall, floor or ceiling decorations or coverings or furniture, furnishings, fixtures, appliances, equipment or other personal property supplied or installed by Unit Owners or tenants of Unit Owners) together with all service machinery contained therein, covering the interests of the Condominium, the Condominium Board and all Unit Owners and their mortgagees, as their interests may appear, in an amount equal to the full replacement value of the Building or Buildings (exclusive of the cost of excavations and foundations) without deduction for depreciation; (ii) boiler and machinery insurance; (iii) water damage legal liability insurance; and (iv) such other insurance as the Condominium Board may determine.
The proceeds of losses paid under all policies of insurance shall be payable to the Condominium Association as Insurance Trustee for deposit in a New Jersey bank or trust company designated by the Condominium Board, in accordance with the terms of the By-Laws, to be applied for the purpose of repairing, restoring or rebuilding unless otherwise determined by the Unit Owners as hereinafter set forth. No portion of the insurance proceeds shall be applied to the payment of the mortgage indebtedness of any Unit Owner unless seventy-five (75%) percent of the Unit Owners determine not to repair, restore or rebuild.
All policies of physical damage insurance shall, if possible, contain waivers of subrogation and of any defense based on co-insurance or of invalidity arising from any acts of the insured or of pro rata reduction of liability, and shall provide that such policies may not be cancelled or substantially modified without at least ten (10) days’ prior written notice to all of the insureds, including all mortgagees of Units. Duplicate originals of all policies of physical damage insurance and of all renewals thereof, together with proof of payment of premiums, shall be delivered to all mortgagees of Units at least ten (10) days prior to expiration of the then current policies and each Unit Owner shall receive a certificate of such insurance.
The cost of all such insurance shall be paid by the Condominium Association and shall constitute a part of the Common Expenses.
The Condominium Board shall also obtain and maintain to the extent obtainable: (i) fidelity insurance covering all employees of the Condominium and the managing agent who handles Condominium funds; (ii) workers’ compensation insurance; (iii) rent insurance in an amount equal to the aggregate of the Common Charges payable to the Condominium Board including all reserves; (iv) public liability insurance covering each member of the Condominium Board, the Managing Agent, the manager and each Unit Owner in such limits as the Condominium Board may deem proper, and covering all claims for bodily injury or property damage arising out of any occurrence in the Common Elements or the Units, except that such policy will not cover liability of a Unit Owner arising from occurrences within his or her Unit or within the Limited Common Elements exclusive to his or her Unit. The Condominium Board shall review such limits once each year. The public liability insurance shall also cover cross-liability claims of the insured and/or the individual Unit Owners against one another.
11. Easements
Each Unit Owner shall have an easement in common with the Owners of other Units to use all pipes, ducts, cables, wires, conduits, elevation shafts where located, public utility lines and other Common Elements located in other Units and serving his or her Unit in accordance with present use and present available facilities. In addition, each Unit Owner shall have an easement for the continuance of any encroachment by his or her Unit on any adjoining Unit or on any Common Element, existing as a result of construction of the Building in the Condominium, or which may come into existence thereafter as a result of settling or shifting of a Building, or as a result of restoration of a Building or such Unit after damage by fire or other casualty, or as a result of condemnation or Eminent Domain proceedings, or as a result of repairs or alterations made or approved by the Condominium Board, so that any such encroachment may remain undisturbed so long as the Building remains standing. Each Unit shall be subject to an easement in favor of the owners of the other Units to use the pipes, ducts, cables, wires, conduits, public utility lines and other Common Elements serving such other Unit and located in such Unit in accordance with present use and present available facilities. The Condominium Board, through the Managing Agent, or its employees shall have a right of access to each Unit to inspect and make repairs to the Common Elements contained therein or elsewhere in a Building in the Condominium or to prevent damage to the Common Elements or to the other Units or to abate any noted violations or to correct any condition which may violate the provisions of any mortgage covering another Unit. If such access is denied by Owner and results in damage to the Unit and/or Building, said Unit Owner may be legally liable for the remedy of such resulting damage 53 and to pay the costs of remediation. subject to all easements of necessity the Common Elements. In addition, each Unit shall have and shall be in favor of such Unit or in favor of other Units and
Units having appurtenant Limited Common Elements shall have an easement for the exclusive use thereof.
Each deed to a Unit shall include and shall be subject to the easements hereinbefore described, whether or not recited in the deed.
12. Rights of Owners to be Present at Board of Directors Meetings
Pursuant to N.J.S.A.46:8B-13, the By-Laws provide that all meetings of the governing board, except conference or working sessions at which no binding votes are to be taken, shall be open to attendance by all Unit Owners, and adequate notice of any such meeting shall be given to all Unit Owners in such manner as the By Laws shall prescribe; except that the governing board may exclude or restrict attendance at those meetings, or portions of meetings, dealing with (I) any matter the disclosure of which would constitute an unwarranted invasion of individual privacy; (2) any pending or anticipated litigation or contract negotiations; (3) any matters falling within the attorney client privilege, to the extent that confidentiality is required in order for the attorney to exercise his ethical duties as a lawyer, or (4) any matter involving the employment, promotion, discipline or dismissal of a specific officer or employee of the Association. At each meeting required under this subsection to be open to all Unit Owners, minutes duly taken at the previous meeting shall be made available to Unit Owners before the next open meeting.
13. Severance of Ownership Prohibited
Both the Condominium Act and the By-Laws of the Condominium prohibit a Unit Owner from attempting to convey his or her Unit separate from its appurtenant interest in the Common Elements. The intent of such provision is to prevent any severance of such combined ownership.
14. Accumulation of Reserves
The Condominium Board may assess Common Charges for accumulation of reserves subject to provisions of applicable tax law and subject, for a limited time, to Sponsor’s right to withhold consent to such action.
15. Records and Audits
The Condominium Board or the Managing Agent shall keep detailed 54 records of the actions of the Condominium Board and the Managing Agent, minutes of the meetings of the Condominium Board, minutes of the meetings of the Unit Owners, and financial records and books of account of the Condominium, including a chronological listing of receipts and expenditures, as well as a separate account for each Unit which, among other things, shall contain the amount of assessment of Common Charges against such Unit, the date when due, the amounts paid thereon, and the balance remaining unpaid. Such books and records shall be available to Unit Owners for inspection during business hours at the office of the Managing Agent. An annual report of the receipts and expenditures of the Condominium audited by independent certified public accountant shall be provided by the Condominium Board to all Unit Owners, after its receipt approximately ninety (90) days following the end of each fiscal year. The cost of such report shall be a Common Expense of the Condominium.
16. Amendments
Subject to certain exceptions, including, among others, exceptions regarding the rights of Sponsor, any provision of the Master Deed and By-Laws may be amended, modified, supplemented or deleted by an affirmative vote of 66-2/3 % in number and in Common Interest of the Unit Owners (and of the holders of first mortgages on Units, if their approval is required), except where any other percentage is required by law or elsewhere herein for certain specific actions.
The foregoing summary is not intended to be a complete discussion of the By-Laws or Master Deed. It is simply an introduction to the proposed By-Laws and Master Deed reproduced in full in Part II, Exhibit D, which documents should be read by all Purchasers of Units.