The Top Condominium v. Township of South Orange Village

NOT FOR PUBLICATION WITHOUT APPROVAL OF

THE TAX COURT COMMITTEE ON OPINIONS

TAX COURT OF NEW JERSEY

Mala Narayanan 153 Halsey Street

JUDGE Gibraltar Building - 8THFloor

Newark, New Jersey 07101

Telephone (973) 648-2921

Fax: (973) 648-2149

taxcourtnewark2@judiciary.state.nj.us

July 21, 2012

Via Electronic Mail

Yana Chechelnitsky, Esq.

The Schneck Law Group, L.L.C.

301 South Livingston Avenue

Livingston, New Jersey 07039

John F. Casey, Esq.

Wolff & Samson P.C.

1 Boland Drive

West Orange, NJ 07052

Re: The Top Condominium v. Township of South Orange Village

Block 2605, Lot 1

Docket No. 014840-2011

Dear Counsel:

This letter constitutes the court s opinion with respect to plaintiff s motion for summary judgment in the above-captioned matter. Plaintiff contends that defendant cannot impose local property tax upon the above referenced property because it constitutes part of the common elements of a condominium complex located in Maplewood Township, and is thus not separately assessable. Defendant opposes the motion on grounds that its assessor is statutorily and constitutionally mandated to impose assessment on non-exempt property located in the township, and further, plaintiff has not established that Maplewood Township s assessment of each of the individual condominium units includes a proportionate share of the value of the common elements located in defendant township. Because the court finds that the issue of whether the property s assessment was or was not included in the assessment of the individual condominium units is a materially disputed fact, plaintiff s motion for summary judgment is denied and the matter will be set for trial.

FACTS AND PROCEDURAL HISTORY

For tax year 2011, defendant ( South Orange ) imposed an assessment of $318,000 upon property identified as Block 2605, Lot 1, and commonly known as 616 South Orange Avenue West. The assessment was for land only. The tax bill in this regard was sent to plaintiff ( Top Condominium ).

The property at issue in this case consists of driveways, plants and shrubbery over a total land area of 1.46 acres. It is part of a larger condominium property which abuts Maplewood Township ( Maplewood ). The condominium units, as well as the parking lot/s, are located in Maplewood. Together, the land and improvements (in Maplewood) and the land in South Orange total about 2.6 acres (the entire property being hereinafter referred to as Subject Property and the portion in South Orange being referred to as South Orange Portion ). Top Condominium s managing agent certified that Maplewood imposes a separate assessment for the value of each condominium unit located in Maplewood.

According to the March 10, 2003 First Amendment to Master Deed ( 2003 Amendment ), Top Condominium is a non-profit corporate entity. It was created to administer, operate and manage the Subject, as well as the 93 residential units with improvements to be held under the condominium form of ownership, for the common use and enjoyment of the condominium unit owners. It is also responsible for maintaining, repairing, and replacing the common elements. Each condominium unit owner is a member of Top Condominium.

The 2003 Amendment provides a description of the general common elements as including all appurtenances, facilities and other items which are not part of a dwelling unit.1 This includes, among others, all lawn or landscaped areas, shrubbery and plantings and all easements on land lying in both townships. The 2003 Amendment also provides: (1) that the unit owners have an estate in fee simple and acquire as an appurtenance to each unit, an undivided interest in the common elements of the condominium; (2) that the percentage interest in the common elements is allocable to each unit based upon its relative square footage and purchase price;2 (3) that the undivided proportionate interest in the common elements shall not be separated from the unit to which it appertains and shall be deemed conveyed or encumbered with the unit even if such interest is not expressly mentioned or described in the conveyance or other instrument;3 (4) that the unit owners have a non-exclusive easement in the common elements; and (5) that each unit s percentage interest in the common elements is used to allocate payment of common elements expenses and income.

In this connection, each unit owner is liable for his or her share of a common expense assessment. This assessment is imposed to cover, among others, the cost to maintain and operate the common elements.4 Receipts from the assessment are exclusively used for the benefit of the members of Top Condominium, i.e., the unit owners.

The 2003 Amendment also provides as one of the General Covenants and Restrictions that all property taxes, special assessments and other charges imposed by any taxing authority are to be separately assessed against and collected on each unit as a single parcel pursuant to the New Jersey Condominium Act, N.J.S.A. 46:8B-19. If however, any such tax is not so separately taxed, but is imposed on the lands and improvements of the Condominium as a whole, the 2003 Amendment provides that each unit owner is required to pay his proportionate interest . . . based upon his unit s appurtenant percentage interest in the common elements, or on such other basis as Maplewood determines.5

Top Condominium appealed South Orange s assessment to the Essex County Board of Taxation. The Board affirmed the assessment. A timely appeal followed, and this motion ensued.

In opposing the motion, South Orange s assessor certified that it is not at all unusual for a property to straddle the line between municipalities. In these instances, the routine and accepted practice for assessment purposes was for each town to value its proportional share of the property. This practice is applied regardless of the nature of the property, i.e., whether residential, industrial, commercial or condominium. The assessor also stated that just as she was not lawfully permitted to assess the portion of the Subject Property located in Maplewood, Maplewood s assessor also cannot assess the South Orange Portion.

FINDINGS

Summary judgment will be granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). Denial is appropriate only where the evidence is such that reasonable minds could return a finding favorable to the party opposing the motion. Id. at 534, 540.

Generally a party cannot successfully resist the motion by relying either on the conclusionary allegations or the denials of [the movant s] pleadings. Pressler & Verniero, Current N.J. Court Rules, comment 1 to R. 4:46-5 (GANN 2012). Nonetheless, the court can grant summary judgment only if it is satisfied that there is no genuine issue as to any material fact challenged and the movant is entitled to judgment as a matter of law. R. 4:46-2(c). If the opposing party makes a prima facie showing of a genuine dispute, summary judgment may not be appropriate. See also Allstate Ins. Co. v. Fisher, 408 N.J. Super. 289, 302 (App. Div. 2009) ( even in an uncontested motion, the judge must consider whether undisputed facts are sufficient to entitle a party to relief. It is not enough to suggest that there is no opposition, especially if the facts do not warrant the granting of relief in the first instance ).

Top Condominium claims that it is entitled to judgment as a matter of law because it is undisputed that the South Orange Portion comprises only of common elements, and by law, common elements cannot be separately assessed and taxed. This is a correct proposition. See N.J.S.A. 46:8B-19. This is because by law, ownership of a condominium unit includes a proportionate share of the common elements. Wedgewood Knolls Condo. Ass n v. Borough of West Paterson, 11 N.J. Tax 514, 528 (Tax 1991). It follows that the assessment of the common elements comprises a part of the assessment of the condominium unit. Thus, [f]or property tax purposes, the value of common element is allocated among its owners based on percentages set forth in the condominium s master deed, and the unit owners are tenants-in-common with a proportionate undivided interest in the common elements. Olde Orchard Village Condo. Apartments v. Township of Pequannock, 21 N.J. Tax 275, 280-81 (Tax 2004). As a matter of law, common elements should not be separately assessed from the condominium units.

South Orange does not dispute that the South Orange Portion comprises the common elements of the Subject Property. However, it points out that the cases discussing prohibition of separate assessment and tax do not address assessment where the property is located in two different taxing districts. South Orange contends that an assessor is mandated by statute and the constitution to tax all property not specifically exempt, therefore, the bar against a separate assessment for common elements does not apply. This argument is reasonable. Nonetheless, it cannot compel a result whereby the common elements are effectively subject to a separate assessment and taxation in violation of N.J.S.A. 46:8B-19. See City of Atlantic City v. Warwick Condo. Ass n, 334 N.J. Super. 258 (App. Div. 2000) (holding that a non-contiguous parking lot of a condominium, and designated by the master deed as common elements, was not subject to a separate property tax assessment even where the parking spaces were not available to all of the unit owners, because every unit owner retained a share of common ownership in the lots and this interest was conveyed to a purchaser of a unit owner s interest).

However, there are no facts presented to this court from which it can determine that the South Orange Portion is undisputedly included in the assessment of each individual condominium unit, and thus, taxed to each unit owner. Top Condominium s managing agent s certification that Maplewood imposes a separate assessment for the value of each condominium unit located in Maplewood, presumes, but does not sufficiently prove that Maplewood s assessment includes or otherwise factors in the value of the South Orange Portion.6 Similarly, South Orange assessor s conclusory statement that it is a routine and accepted practice for each town to value its proportional share of a property lying in two townships, regardless of the nature of the property, presumes, but does not establish by sufficient proof that common elements also fall within such alleged routine practice.

In sum, there is simply not enough evidence in the record before the court at this time to conclude, that as a matter of law, the common elements were separately assessed by South Orange, and that the assessment should be overturned as being violative of N.J.S.A. 46:8B-19. Therefore, this matter is not ripe for summary judgment.

An order denying Top Condominium motion for summary judgment will be entered and the matter will be set for trial. Very truly yours,

Mala Narayanan, J.T.C.

1 The 2003 Amendment defines a unit and dwelling unit as excluding any of the common elements. The document also defines dwelling limited common elements to mean a patio directly accessible by more than one Unit owner and limited common elements as being any fireplace, balcony or patio directly accessible by a single Unit owner. Repair and maintenance of the dwelling limited or limited common elements is generally assigned to the individual unit owner.

2 Top Condominium provided a schedule of the percentage ownership interests in the condominium.

3 The 2003 Amendment also provides in General Provisions that, among others, any portion of the common elements cannot be conveyed to any third person, firm or entity, without the express consent by ordinance, of the governing bodies of Maplewood and South Orange, or whichever municipality then had the zoning and subdivision jurisdiction over the Property.

4 The condominium uses South Orange s water and sewer system. Top Condominium pays all hookup and annual service fees in this regard.

5 The 2003 Amendment provides that until Maplewood assesses and bills units individually for real estate taxes Top Condominium s board of directors would collect from each unit owner, amounts for payments of such taxes estimated or assessed against the property as a whole.

6 The court raised the application of N.J.S.A. 40A:13-19 as a possible solution to the alleged dual assessment of the South Orange Portion. This statute allows municipalities in which a portion of the land and building of a subject property are located, to decide by resolution which municipality will have the sole supervision of the entire property. Top Condominium posited that the statute is irrelevant because by law, common elements cannot be separately assessed. Again, this argument presupposes that Maplewood included the value of the South Orange Portion in the assessment of each condominium unit. South Orange also posited that the statute is inapplicable because (i) there is, in fact, no such resolution between Maplewood and South Orange; (ii) absent such an agreement, South Orange has the right, and the obligation, to impose an assessment on the South Orange Portion. This argument simply raises the unresolved issue of whether Maplewood, has in fact, accounted for the value of the South Orange Portion in its assessment of the condominium units.

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