Condominiums Lose Their Case Over Land Leases

 

coaster-news-200-newTwo Ocean Grove condominium associations have lost their case against the Ocean Grove Camp Meeting Association (OGCMA) over land leases that the condominium associations charge are illegal. An appeal of the judge’s decision is being considered.

“I am suggesting the two associations appeal the decision to the Appellate Court,” said James T. Hundley, the Ocean Grove-based attorney for the plaintiffs.

The lawsuit was filed at the Superior Court in Monmouth County on Jan. 22 and Judge Paul X. Escandon ruled against the two associations on March 31.

OCGMA officials said they are pleased with the judge’s ruling.

“The Ocean Grove Camp Meeting Association is pleased that attempts to change, decrease, and/or eliminate our property rights and condominium lease agreements have been dismissed by the Superior Court for numerous reasons,” Chief Operations Officer John DiGiamberadino said.

The two condominium associations are the 22-unit Pathway Condominium Association, at 30 Ocean Pathway, and the six-unit Dardanelle Condominium Association, at 40 Ocean Pathway. They have 45 days to appeal the judge’s decision.

Judge Escandon ruled the original agreement was valid under the condominium act and also ruled that both associations had to file suit within six years of the date of original agreements and any litigation is now barred by the statute of limitations.

Hundley argued that in the late 1990s, the OGCMA required developers converting properties into condominiums to enter into a lease agreement where each unit owner in the association would be required to pay land rent to the condo association. The land lease was $10.50 per lot per year. For example, the Pathway Condominiums are on 3.5 lots.

“So the owner had a common interest in the land,” he said.

However, as the converted condominium buildings came on board, the OGCMA and the developers signed an agreement requiring each future condo owner to pay ground rent based on the sales prices of their units. This money would be collected by the condominium association and then transferred to the OGCMA.

Hundley argued that these newer agreements are contrary to the original condominium act where the owner owns property in fee simple- they own it outright. The new agreements with the OGCMA and developers creates a sub-tenancy for each rental unit and tenants have to pay the OGCMA to lease their unit.

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