Is Your Common Interest Community Association Receiving the Benefits of the Municipal Services Act?
Like many condominium and homeowners associations in New Jersey, the 70 or so common interest community associations in the City of Long Branch were unaware that they were entitled to reimbursement for certain municipal services – such as the costs of snow removal, trash collection and street lighting – that they provided to their members out of their annual budgets. Unaware, that is, until recently… On June 13, 2006, the Long Branch City Council authorized reimbursement of over $100,000 to condominium owners in the City for snow removal and street lighting services. This amount represents the costs of these services incurred by these 70 associations from 1996 through 2006.
Pursuant to the Municipal Services Act, N.J.S.A. 40:67-23.2 to -23.8, every municipality in New Jersey is required to either provide certain services to each qualified private community within its borders and common elements or reimburse the common interest community for these services, including the removal of snow, collection of trash or recyclables or lighting of roads and streets. The purpose of the Municipal Services Act is simple – eliminate double taxation of common interest community association residents, as many of these services are paid for by residents through their maintenance fees and condo fees. As discussed more fully in one of the seminal cases interpreting the Act, Briarglen II Condo. Ass’n, Inc. v. Township of Freehold, 330 N.J. Super. 345, 353 (App. Div. 2000), the Appellate Division determined that the legislative intent of the Act was to “help eliminate double payment for some services which the residents of qualified private communities now pay through property taxes and fees to their association.”
Although the Municipal Services Act went into effect in January of 1993, many qualified associations fail to take advantage of having their municipality provide these services – or the reimbursement for them – simply because they are unaware that they are entitled to them. This means countless associations in the state – like those formerly unaware in Long Branch – may be entitled to significant reimbursements that could be used to free up other funds for capital contributions and reserves, necessary repairs, or long-overdue improvements to their communities.
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2 Replies to “Is Your Common Interest Community Association Receiving the Benefits of the Municipal Services Act?”
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The Blairstown NJ Town council is considering reducing the amounts reimbursed to private road associations based on a flawed formula of previous municipal costs. Please advise if there are any cases in NJ dealing with the issue of how comparable costs have been used in lieu of actual cost reimbursement. Any advice is appreciated.
Paul Zdrodowski
Bingham Lane Property Owner’s Association
Blairstown, NJ
Dear Mr. Zdrodowski:
Thank you for your comment on our blog on the Municipal Services Act.
Pursuant to the Act, reimbursement for services (such as snow removal or street lighting) shall be the actual cost to the qualified private community of providing these service, but not to exceed the amount that the municipality would expend if it provided such service directly. See N.J.S.A. 40:67-23.5.
Unfortunately, there are very few cases regarding this aspect of the Act; however, the case of Stonehill Prop. Owners Ass’n v. Township of Vernon, 312 N.J. Super. 68 (App. Div. 1998), does provide some guidance with regard to your question. In Stonehill, one of the issues discussed by the Court centered on whether the Township must make reimbursement of the total costs incurred by the Association or whether reimbursement is limited to the level it would cost the municipality to provide the same services. Under the unique circumstances presented in this case, because the Court recognized the municipal roads could be plowed more efficiently than the Association’s roads (which were very steep and at high elevations), the Township was required to pay additional amounts by way of reimbursement (for what the Court considered a “difficulty factor”) over and above what the actual cost to the Township would be for providing these services.
We would be happy to discuss the opportunity to assist your Association in this regard. Please feel free to call me or e-mail me with any additional questions.
Again, thank you for taking the time to read our blog, and I look forward to hearing from you.
Very truly yours,
Jon Katz