New Jersey Condominium Transition Agreements, from the Association's view point

Transition Agreements for Condominiums:   Let the Association BeWare

Transition is every association’s independence day.   It marks leaving home, growing up, being “on your own.”

Transition turns responsibility for the common elements and for running the project over to the Association.  The Developer bids you farewell  and leaves the project.

A transition agreement is often signed which in formal terms depicts this separation.  Often the first draft presented to the Association comes from the Developer.  Probably the Association should not sign it but make changes.

  No question, the Associations needs its lawyer to review the document.  Do not try to save money here.

The big issue in the agreement is the release the  builder wants to obtain  from the

Association.  From the Developers’ standpoint, it wants to fix whatever needs to be fixed and leave for good.

The Association may want the Developer to remain liable for repairs for a given time period.  In other words, not only does the developer have to fix whats broken,  but enough time must pass to show that everything was properly fixed.

The builder may also want the association to defend and indemnify it from third party claims.  Really?  When did the Association become an insurance company?   Trick question.   It never did and this issue needs to be looked at and negotiated.

The Association may have to certify it received all transition related documents from the developer.  If so, the Developer must first certify this is true.

The Association may be asked to represent that it is confident all of the books and affairs are in order when transition occurs.   If so,   the Association needs to independently verify this is so.

And who will identify all common elements and verify they were properly installed and functioning.  Some common elements are missed all together in transition.  An expert must be retained to make sure this does not happen at your complex.

Yes, this really is a multifaceted project.  It does not have to cost a small fortune.   But no, doubt,  from the Associations standpoint it must be properly done.

Lieberman & Blecher represents community associations within the State of New Jersey.            www.liebermanblecher.com