Transition Services and Litigation

Specific to our community associations that we represent, Becker guides you through the process of “Transition,” which typically occurs when the developer of a community transfers control of the association to the homeowners. This process can lead to disputes and legal challenges, necessitating experts with specific knowledge and expertise.

Our lawyers provide legal counsel for post-transition, unit owner-controlled associations on developer issues and disputes, including the resolution of warranty and construction defect claims, accounting disputes and any misrepresentation claims. We also counsel our clients through the establishment of on-going operational controls. Becker’s experience and track record of success plays a key role in negotiations with the developer, including those involving financial and construction defect issues.

As a result of Becker’s success, we are often able to resolve construction defect, accounting and other transition related issues with developers without the need for litigation. Some notable successes include:

• $20 million-dollar verdict. The jury awarded $3 million dollars against the developer and general contractor of a condominium in West New York, New Jersey. The amount was then trebled under the New Jersey Consumer Fraud Act to $9 million dollars and the association was awarded attorney’s fees and costs. The jury also awarded $13 million dollars against design professionals that performed services on the project. This landmark case was particularly unique because the parent company of the developer was found to have used its subsidiary to perpetrate an injustice. The jury therefore found in favor of the condominium association’s corporate veil piercing claims, such that the developer’s parent entity was held liable for all amounts entered against the developer.
• 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. The matter settled shortly after the Court awarded the condominium association summary judgment on its claims of piercing the corporate veil, finding that the developer’s parent entity would be liable for any amounts that may be entered against the developer at trial.
• Eight-figure settlement for a large northern New Jersey condominium community in Passaic County experiencing excessive settlement. The matter is still active in litigation with additional settlement funds and/or judgments expected.
• $13 million-dollar 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.
• $10 million-dollars in settlements for a Essex County townhome community experiencing water infiltration through the building envelope.
• $7 million-dollars in settlements for a Hudson County waterfront condominium experiencing water infiltration and geotechnical soil settlement issues.
• $5.3 million-dollar settlement for a high-rise Jersey City condominium developed by a national developer that experienced damage to its parking garage, building façade, balconies, windows, doors and interior building components as a result of issues associated with design and construction.
• $1.8 million-dollars settlement for a luxury, mid-rise condominium located in the heart of downtown Summit, New Jersey, experiencing water infiltration though roofs, fiberglass decking and facades.
• Nearly $1.4 million-dollar settlement for an age-restricted condominium in Flemington, New Jersey, suffering from water infiltration due to improperly installed building components and damage to concrete walkways from improper backfill.
• $1.3 million-dollars in settlements for a Hoboken, New Jersey mid-rise condominium experiencing water infiltration through its green roof and facade.
• $1.1 million-dollars in settlements for a condominium in Red Bank, New Jersey experiencing water infiltration though the roof, building façade and balconies into the residential units of the condominium building.

Whether you’re already facing a construction defect claim, or simply want to ensure your new project avoids that possibility, Becker’s team offers you the guidance, counsel, and collaboration to fearlessly move forward.

Land Use, Zoning and Planning Matters

Creating and transforming land use and zoning classifications to assist clients who are pursuing projects and business opportunities throughout the state, or are objecting to a neighboring development application, has been an important part of Becker’s core business since its inception. The combination of our pre-eminence in real estate and construction law provides our clients with unique and unparalleled counsel in planning, developing and building projects. Through our representation of Community Association clients, we are called upon to negotiate agreements to mitigate impacts from nearby or adjoining developments. We have successfully represented our clients on zoning, permits, height limitations, setbacks, noise mitigation, etc., including:

• Successfully obtained denial of application for development before the Planning Board of the City of Paterson, New Jersey, on behalf a community association client. The association’s property was directly adjacent to the Applicant’s property. Through cross-examination of the applicant’s own witnesses, and the testimony of a Professional Planner retained by the association, Becker argued multiple deficiencies in the developer’s application resulting in a vote to deny the application.
• Obtained partial summary judgment dismissing nearly all claims asserted against a mid-rise, luxury condominium association client located in Morristown, NJ. The association was sued by a neighboring property owner claiming that its residents were overburdening a shared alleyway that runs between the parties’ properties.
• Successful in negotiating a settlement with financial incentives and sufficient reductions to a proposed neighboring development that negatively impacted his clients’ property in lieu of appearing before the local municipal planning board.

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Frequently Asked Questions

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What is a construction defect?

Generally, this is defined as a flaw in the project’s design, workmanship, or materials/systems that results in the failure of a component part of a building or structure, causing damage to a person or property and resulting in financial harm to the owner. Many defects can appear obvious to the untrained eye, while others are latent and need a trained professional to analyze.

How do I know which professionals to hire for a damage assessment?

Not sure where to find the licensed professionals needed to evaluate your project? Becker has them on speed dial. Our industry partners provide objective and undisputable evaluations and regularly deliver expert opinions and testimony in court. We can offer recommendations and help you build the right team to move your project (or dispute) forward.

How do I know if my community is experiencing the effects of construction defects?

It’s true that properties can have ‘personality’, but those quirks can quickly move from amusing to dangerous if left unchecked. A few indications of some more serious construction defects include:

• Water staining and accumulation
• Water leaks and damages
• Problems with mechanical, electrical and plumbing systems
• Poor landscape and soil conditions
• Improper drainage and ponding of water
• Foundation, floor, wall and roof cracks
• Dry rot
• Structural failures
• Cracking of sidewalks, roadways or driveways
• Faulty amenities

If any of these sound familiar, please contact us to discuss potential construction defect claims. We’d be happy lead a thorough site evaluation of each building and structure on your property and provide a professional opinion deficiencies that may exist.

Did I run out of time to file a claim?

Timing is critical when it comes to discovering, reporting, and preserving evidence that may be used in settlement negotiations or trial. New Jersey is subject to two laws that limit the time within which an association may commence a lawsuit.

• The Statute of Limitations. This generally requires that the lawsuit be filed within six (6) years after the issuance of the certificate of occupancy. For a community association, the statute of limitations requires that the lawsuit be filed within six (6) years from when owners take majority control of the association board – commonly referred to as the “transition” of the association from the developer to the owners.

• The Statute of Repose. This essentially limits the timeframe in which a lawsuit can be filed to ten (10) years from the substantial completion of each component of the project.

Confused as to how your construction project measures up to these two statutes? Let Beker help you clarify your next steps and move forward.

How much will it cost?

We understand that litigation can be a significant investment. From the initial site review and testing by engineering and architecture professionals, to legal depositions and up through trial, the fees and costs can be burdensome.

As such, we collaborate with our clients to establish a fee arrangement that benefits your community and incorporates various strategies to avoid, if possible, placing a hardship on your residents via special assessments. In most cases, our team is able to offer contingency arrangements, hourly pricing, blended hourly-contingency fees, as well as competitive pricing and payment plans.

It is our practice to work with you to bring a matter to a successful conclusion while limiting financial strain. It is our intent to seek full recovery from the developer, or other responsible parties, and return the community to the quality and appearance that was promised to the owners when they bought their homes.

Did the contractor commit fraud?

In an effort to save time and money, developers have been known to ignore the recommendations of their own experts and build projects without adequate foundations, proper building materials, or compliance with applicable building codes, standards or manufacturer’s specifications. To determine whether your construction defect was caused by more than just shoddy workmanship, a detailed investigation of the construction process from the very start of the development is necessary.

Fortunately, the law provides a remedy in the situations where fraudulent practices have been confirmed. Thus, a financial recovery can include an award of punitive damages equal to double or even three times the cost of the actual loss plus attorneys’ fees, costs and prejudgment interest. Although such awards can be difficult to obtain, Becker’s team has been successful both in settling claims with strong evidence and through jury trial. We stand ready to provide strategic legal counsel to help you navigate these difficult issues.

What if the builder named a shell company as the contractor?

“Shell” companies are a dubious practice where a developer or contractor creates an entity under which to operate a major development, but ultimately strips that entity of assets after the project is completed and sold. This allows the construction professional to distance themselves from any repercussions stemming from their incompetence and can prevent even a successful claimant from recovering against the builder.

If you find yourself facing this scenario and are feeling defeated, don’t give up! Becker is adept at ‘piercing’ this corporate shield, particularly in instances where the corporate form has been abused to perpetrate a fraud or injustice. No matter how complex the network of subsidiaries may be, our team is relentless in its pursuit of justice and doggedly determined to help you successfully recover your rightful financial award.

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Additional Resources

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• Martin Cabalar on Developer Transition, Construction Defects, & New Jersey’s Structural Integrity and Reserve Funding Law
• From Developer to Homeowners: A Brief Overview of Transition in New Jersey Community Associations, John S. Prisco, Esq.
• Winning Your Case: Selecting the Right Experts in Community Association Transition Litigation, John S. Prisco, Esq.
• New Jersey Governor Signs Mandatory Structural Integrity and Reserve Funding Legislation (S2760/A4384): What it Means for Your Association, J. David Ramsey and Aleix Dairman
• There is More to S2760, Arnold Calabrese