CAI’s amicus curiae brief efforts help courts and communities

Boston, MA In addition to legislative and regulatory advocacy, CAI’s government & public affairs efforts also extend to the legal arena. Most of CAI’s legal activities involve amicus curiae, or “friend of the court” briefs, that CAI files in federal or state cases that address issues of significant importance in community association law. Amicus curiae briefs allow CAI to educate a court about important legal issues in cases related directly to the community association industry. These amicus brief submissions give CAI the opportunity as an organization to help shape the outcome of matters of importance to community association law.

The CAI name represents a level of expertise, knowledge, and professionalism in community association matters that adds weight to a community association-related submitted brief. Good laws that help community associations are an essential aspect of community association governance.

Three cases that CAI submitted amicus briefs for recently had favorable outcomes.

In the case, Twenty Eleven, LLC v. Michael J. Botelho (Rhode Island) the court tackled whether a foreclosure of a statutory non-judicial condominium priority lien is a “true lien priority” and not merely a distributional preference in favor of the association. The Rhode Island Superior Court ruled that the foreclosure of the lien did not extinguish a first mortgage, regardless of the failure of the first mortgagee to either satisfy the priority portion of the lien prior to the association’s sale, or exercise its statutory right of redemption. On appeal, the Rhode Island Supreme Court correctly interpreted the Rhode Island Condominium Act and stated that a condominium foreclosure sale does in fact extinguish a prior-recorded first mortgage on the unit.

In Whispering Woods Condominium Association, Inc. v. Rones (New Jersey) the issue at hand is one of both local and national consequence as the decision was the first time that the U.S. Bankruptcy Court determined that condominium assessment liens are eligible to be stripped off as wholly unsecured liens, despite being classified as security interests in Chapter 13 cases. On appeal, the U.S. District Court of New Jersey held that the New Jersey Condominium Act provides a limited priority for an association lien for delinquent assessments, which elevates that portion of the lien above more senior claims. Further, because the lien in this case had a limited priority over the mortgage it was therefore secured by an interest in the debtor’s residence and could not be stripped off under Bankruptcy Code.

Finally, in the construction defect case The Palisades at Fort Lee Condominium Association, Inc. v. 100 Old Palisade, LLC (New Jersey), no defects were disclosed to the plaintiffs in the Public Offering Statement or engineering report that was approved by the New Jersey Department of Consumer Affairs. Initially, the unit owners could not have known about the defects because the association did not yet exist or was under control of the corporate sponsor. When the unit owners took control of the association, they obtained an engineering report after a series of leaks provided a basis for the association board of directors to be concerned and justified engaging an engineer to perform an investigation. This case involved the claims based upon the contractor defendant’s defective work. Prior to trial, the contractor defendants moved for Summary Judgment based upon the Statute of Limitations. By court order, the motion was granted, dismissing the plaintiff’s claims. The plaintiff moved for reconsideration but was denied. The Appellate Division of the Superior Court of New Jersey determined that the “discovery rule” tolls the six year statute of limitations within which a condominium association must file suit relating to construction defect claims.

For more information on CAI Amicus Curiae Briefs visit www.caionline.org.