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Association Permitted to Maintain Construction Defect Lawsuit Against Sponsor after Successful Lawsuit to Compel Sponsor's Production of Plans, Documents and Relevant Information

Stark & Stark’s Community Association Group successfully represented and represents a condominium in the face of a sponsor attempt to preclude its construction defect case. The New Jersey Superior Court recently found that a condominium association, which was forced to file suit in order to obtain statutorily required documents from its sponsor, was not barred from bringing a subsequent lawsuit for construction defects with respect to the common elements. The sponsor failed to turn over documents to the Association pursuant to the New Jersey Condominium Act (N.J.S.A.46:8B-12.1 et seq.), including architectural plans for the Association's buildings. The Association was forced to file suit to force the sponsor to turn over these documents and plans. After the documents and plans were provided, the suit was dismissed. The Association's experts reviewed the documents obtained in the first lawsuit, including the architectural plans, and determined that several deviations from the architectural plans, details and specifications had occurred during construction, causing water infiltration and damage to the buildings. The Association later filed a second lawsuit against the Sponsor for damages related to these construction deficiencies. In the subsequent lawsuit (Landings at Berkeley Shores Condo. Assoc. v. NVR, Inc. t/a Ryan Homes), the sponsor, NVR, Inc., t/a Ryan Homes, filed a motion for summary judgment claiming that the first lawsuit, and more specifically the fact that the Association was in possession of a preliminary engineering report on the condition of the buildings at the time of the first suit, barred the second lawsuit under the entire controversy doctrine. The New Jersey Superior Court disagreed, finding that although the Association was on notice of certain potential claims at the time of the first lawsuit, it did not have a fair and reasonable opportunity to fully litigate those claims without the statutorily required documents that it obtained via the first lawsuit, including the architectural plans. Therefore, the entire controversy doctrine did not preclude the Association's second lawsuit and thus our client was successful.

This is a victory for all New Jersey condominium associations in that the court recognized that it is patently unfair to permit a sponsor to benefit from its own malfeasance. A sponsor should not be permitted to violate the Condominium Act and fail to turnover plans and documents and then use that misconduct to bar a subsequent lawsuit by the Association.

To learn more about a condominium's rights to obtain plans and other documents from the sponsor, contact Mark M. Wiechnik, Esquire mwiechnik@stark-stark.com.

Full post as published by New Jersey Law Blog on February 02, 2009 (boomark / email).