Legal Question in Real Estate Law in New Jersey

Re: Condo Association Treasurer - Liability

This is a fascinating question. There are a number of things that you should know and more information that you need to determine your options.

1. If your condo association is typical, it elects its officers. Your power depends on how much of the property is still controlled by the builder, but there should be elected nonetheless. Typically, elected officers are subject to recall under the bylaws. Sometimes, bylaws are silent on this specific issue, but reference Roberts� Rules of Order, Newly Revised for parliamentary procedure. The failure of the Treasurer to permit reasonable inspection of the books by the constituents seems that it would be grounds for dismissal for cause. It is a duty of the treasurer to preserve the funds of the organization and to make reasonable accounting for them. See RORN p642-43 for procedures for removal of officers for cause during their term. You can buy that book from Amazon.com for a nominal fee.

2. At the moment, an independent auditor may be more important to you than an lawyer. If the treasurer is removed, she must turn over the funds and records. An audit will have to be done in any event. They are the property of the association.

3. Whatever you do, build a record. Make your requests in writing and tell the treasurer at what time and place you would like to have those records produced. Write down what happens. Be sure to have someone qualified to understand them if they are produced at that time.

4. If you really believe that there has been some improper use of your money (like embezzlement as opposed to just mismanagement), you may wish to consult with the detective unit of your police. Be careful to say only what you know. If you say �she has taken our money,� and that turns out not to be true, you may be subject to a suit yourself for slander. If, however, you say �I believe that she may have taken our money,� that statement is true and truth is a defense against a slander suit.

5. You may also want to check to find out if the treasurer is bonded. If the association is large, it is a 50/50 change that a bond is required. A carefully worded query to the bonding company may get you a lot of leverage. Again, don�t be slanderous, but your�re entitled to ask.

6. Lawyers have to make a living like everyone else. Don�t assume that a fee would be expensive under the circumstances. If you are losing money through mismanagement or intentional misconduct, it may be far less expensive to have someone stop that rather than to permit it to continue. That is especially true if the mismanagement is getting the association in trouble with the State; that would certainly cost more to fix than to prevent.

Re: Condo Association Treasurer - Liability

I concur with John, but question why the remainder of the Board has not gotten involved. What do the other officers say about your inquiries? Board members have a fiduciary responsibility to the members of the Association on whose behalf they operate. If something is amiss, and they do nothing, they could equally be responsible. Has this issue been raised at a Board meeting? Have other homeowners been alerted and how have they reacted? Have you brought this up at a Board meeting? I suggest demanding that the issue be raised and discussed at a meeting, and that the information be made public.