Sheriff Sale and Monthly Maintenance Fees
Micheve, L.L.C. v. Wyndham Place at Freehold Condominium Association
For the second time in four years, the New Jersey Appellate Division has ruled that for the purpose of establishing an obligation to pay monthly maintenance fees, HOA fees, special assessment fees, and/or other condo fees arising from a sheriff sale, it should be based upon the date that the sheriff’s deed was executed and delivered to the successful bidder at the sheriff’s sale.
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For the second time in four years, the New Jersey Appellate Division has ruled that for purposes of establishing an obligation to pay maintenance fees arising from a sheriff sale, it should be based upon the date that the sheriff’s deed was executed and delivered to the successful bidder at the sheriff’s sale. The case in question, Micheve, L.L.C. v. Wyndham Place at Freehold Condominium Association (which has been approved for publication) was decided on July 2, 2004 and supports the Appellate Division’s initial visit regarding this issue as discussed in CKC Condominium Association vs. Summit Bank, 335 NJ Super 385 (App. Div. 2000).
These two cases enforce that it is important for Associations to be cognizant of the correct posting of maintenance fees to an account based upon a sheriff sale as errors could cause bookkeeping issues for Associations. This is a frustrating issue because it is well known that the time frame between the date of the sheriff*s sale and the date when a sheriff*s deed is actually delivered to the successful bidder could be two to four months from the date of the sheriff’s sale. In the meantime, maintenance fees accrue with no payments forthcoming from any entity or individual. However, it is imperative that associations abide by current law requiring maintenance fees and other assessments be applicable only from the date of the execution and delivery of a deed by the sheriff.
While circumstances may exist where there could be exceptions to these cases yet to be decided by Courts in New Jersey (i.e., circumstances where the successful bidder purposefully avoids taking title to the unit, etc.), current law and good practice dictate that associations follow the instructions set forth in this current case. A copy of the case can be furnished upon request.