New Jersey Caps Condo Fines at $500, or $5,000 for a Continuing Violation

Fine authority in New Jersey is delegated, not automatic. Subsection f. of N.J.S.A. 46:8B-15 opens with the condition "If authorized by the master deed or bylaws," so a board whose governing documents are silent on fines has no fining power at all, and adopting a fine schedule by board resolution alone does not create one. N.J.S.A. 46:8B-14(c) makes the same point from the duty side: the association is responsible for adopting, distributing, amending and enforcing rules "including but not limited to the imposition of reasonable fines, assessments and late fees upon unit owners, if authorized by the master deed or bylaws, subject to the right of a majority of unit owners to change any such rules." That last clause is a real check. A New Jersey condominium majority can overturn a rule the board wrote.

The cap is set by cross-reference rather than by a dollar figure in the Condominium Act itself. A fine for a violation or a continuing violation of the master deed, bylaws or rules "shall not exceed the maximum monetary penalty permitted to be imposed for a violation or a continuing violation under section 19 of the 'Hotel and Multiple Dwelling Law,' P.L.1967, c.76 (C.55:13A-19)." Reading that section, N.J.S.A. 55:13A-19(b) fixes the penalty at not less than $50.00 nor more than $500.00 for each violation, and not less than $500.00 nor more than $5,000.00 for each continuing violation. A New Jersey condominium fine above $500 for a single incident therefore exceeds the statutory ceiling, and the $5,000 figure is available only where the violation is genuinely continuing.

The Title 39 carve-out is specific to New Jersey and often misapplied. On roads or streets with respect to which Title 39 of the Revised Statutes is in effect under section 1 of P.L.1945, c.284 (C.39:5A-1), an association may not impose fines for moving automobile violations. Many New Jersey developments have adopted Title 39 by municipal resolution so that local police can enforce traffic law on private roads. In those communities the association's own speeding and stop sign fines are barred by statute, and enforcement belongs to the police and municipal court.

Procedure is mandatory before money changes hands. A fine shall not be imposed unless the unit owner is given written notice of the action taken and of the alleged basis for the action, and is advised of the right to participate in a dispute resolution procedure in accordance with N.J.S.A. 46:8B-14(k). That subsection requires the association to provide a fair and efficient procedure for housing-related disputes, readily available as an alternative to litigation, and requires that a person other than an officer of the association, a member of the governing board, or a unit owner involved in the dispute be made available to resolve it. An owner who is not satisfied with the result is expressly not prevented from seeking a judicial remedy in a court of competent jurisdiction.

Homeowners associations organized under the Planned Real Estate Development Full Disclosure Act rather than the Condominium Act sit on different footing. N.J.S.A. 45:22A-46(d)(1) lets the bylaws provide a method for the adoption, amendment and enforcement of reasonable administrative rules relating to the operation, use, maintenance and enjoyment of the units and the common elements, and N.J.S.A. 45:22A-44(c) imposes the same dispute resolution obligation, but the chapter contains no dollar cap of its own. The $500 and $5,000 figures come from the Condominium Act's cross-reference and bind condominium associations directly.

An unpaid fine becomes a collection matter through the association lien. A. A. 1(a) for other associations both give a lien on the unit for unpaid assessments and any other moneys duly owed, "together with interest thereon and any late fees, fines, expenses, and reasonable attorney's fees imposed or incurred in the collection of the unpaid assessment," with the proviso that an association shall not record a lien in which the unpaid assessment consists solely of late fees. The lien is effective only from the time a verified claim of lien, stating the unit description, record owner, amount due and due date, is recorded in the county records.

Fines do not, however, ride along with the six-month super priority. Both sections define the priority-eligible "assessment" as periodic payments for regular and usual operating and common area expenses under the annual budget, and expressly exclude late charges, penalties, interest, and fees or costs of collection or enforcement. A fine is therefore collectible, but it sits behind a prior recorded mortgage. Any priority a lien does obtain expires on the first day of the 60th month after recording, and the association must give written notice of the filing to the holder of a first mortgage. An owner may demand a certificate of unpaid assessments from the association, which must be supplied within 10 days of the request.