Becker & Poliakoff

Becker Spotlight: Martin Cabalar on Developer Transition, Construction Defects, & New Jersey’s Structural Integrity and Reserve Funding Law

Becker Spotlight: Martin Cabalar on Developer Transition, Construction Defects, & New Jersey’s Structural Integrity and Reserve Funding Law

Recognized by New Jersey Super Lawyers as a ‘Rising Star,’ and ranked by Chambers and Partners in the field of Construction, if you spend a few minutes with Martin Cabalar, you’ll realize it’s true. Cabalar, a shareholder in Becker’s New Jersey office, is part of the firm’s community association and construction litigation practice groups. He wears several hats, from serving as General Counsel for community associations to guiding communities through the developer transition process and representing homeowners and associations in construction defect litigation. “I love what I do because I get to help community associations make good business decisions. It’s a win-win,” says Cabalar.

And he knows a thing or two about winning. In 2023 alone, guided by Martin, Becker’s New Jersey team obtained more than 33 million dollars in settlements. Notable achievements over the past 7 years include:

  1. $20 million verdict in a landmark construction defect case that was particularly unique because the parent company of the developer was found to have used its subsidiary to perpetrate an injustice.
  2. $13 million settlement on the eve of trial for a condominium located along the Hudson Waterfront/New Jersey Gold Coast that experienced excessive settlement and water infiltration due to improperly installed building components.
  3. Eight-figure settlement for a large northern New Jersey condominium community in Passaic County, the case is still pending.
  4. Eight-figure settlement for a condominium in New Jersey, located on the Hudson Waterfront, that experienced excessive settlement and other construction defects due to improperly designed and constructed site and building components.
  5. $7.3 million in settlement for an Essex County townhome community experiencing water infiltration through the building envelope.
  6. $7-million-dollar settlement for a Hudson County waterfront condominium experiencing water infiltration and geotechnical soil settlement issues.
  7. $5.3 million settlement for a high-rise Jersey City condominium that experienced damage to its parking garage, building façade, balconies, windows, doors, and interior building components because of issues associated with design and construction.
  8. $1.1 million-dollar settlements for a condominium in Red Bank, New Jersey experiencing water infiltration through the roof, building façade and balconies into the residential units of the condominium building.

Cabalar focuses much of his efforts on working with communities through the “transition” phase. This period occurs after the developer transfers control of the association’s governing board to the community owners. “There is a period of due diligence that follows the transition election that the board goes through. This includes hiring various professionals–usually management, legal, accounting, engineering—to be sure the developer met its legal obligations to the community. My role is to serve as the ‘quarterback’ to guide them down the field through what is otherwise a very unfamiliar process for most volunteer board members,” says Cabalar. That includes making sure construction and site elements are built to code, the approved design plan is without defects, and the developer represented and managed the association’s finances properly during the time it controlled the association. Cabalar also makes sure the developer made adequate representations relative to the association’s reserve funding and met those obligations. On the issue of proper reserve funding, he says, “if there are discrepancies or deficiencies, I work with the governing board to monetize them.”

Cabalar recommends obtaining an attorney to guide a community through transition shortly after the transition election. If you’re wondering why an association may need an attorney that early in the process, he says it’s more than the obvious of coordinating with the engineer and the accountant, so they know what the legal obligations of the developer are when preparing their reports and negotiating any claims. More importantly, Cabalar says, is to protect the association if the association cannot resolve claims with the developer and should end up in litigation. “Our role at that point is to serve as counsel and give advice to the board on how to negotiate these claims and try to come to a resolution with the developer. If they are unsuccessful and need to resort to litigation, they will not have unknowingly harmed any of their legal claims having involved counsel from the very start.” Cabalar says that all too often communities make decisions not realizing they are negatively impacting the likelihood of success in recovering on their transition related claims.

In addition to providing counsel to community associations, Cabalar represents homeowners and contractors in complex construction, land use and development, and contractual disputes. And with a recent construction boom—particularly along the Hudson waterfront, in Jersey shore towns, and the Southern New Jersey/Mt. Laurel area, he believes the number of construction defect claims may continue to rise. “Many HOAs, particularly the 55+ and active lifestyle communities, are experiencing deficient design or installed site elements such as drainage basins, issues with their clubhouses and water infiltration into condominium units. These can be a huge expense for a community association to correct.”

Right now, Cabalar is also helping his clients prepare for changes under the recently signed structural integrity and reserve funding law aimed to address condo safety and adequate reserve funding law. S2760/A4384 requires all community associations to bolster their reserve funds and many others to adhere to stricter inspection rules. “Associations are going to need to prepare for some additional expense for previous underfunding of their reserves and structural inspections on their buildings, if applicable. A lot of it depends on the type of structure, community, and age of their building. They should be getting their ducks in a row now, discussing with their legal counsel to map out the appropriate plan and timeline to meet these new obligations.”

Cabalar has been with Becker since 2012. He says Becker stands out among the competition for several reasons, but most notably for clients, “You are getting a firm that understands how to start, and more importantly, how to successfully finish a transition, should you need to get to the point of litigation. Bottom line, we know how to successfully litigate these claims. And because we know how to litigate, and we consistently do it well, we’re more often able to have success without litigation in the first place.”