New Jersey Horizontal Property Act

This act shall be known and may be cited as the "Horizontal Property Act."

L.1963, c. 168, s. 1.

Unless it is plainly evident from the context that a different meaning is intended, as used herein:

(a) "Apartment" means an enclosed space consisting of one or more rooms occupying all or part of a floor or floors in a building of one or more floors or stories, but not the entire building, and notwithstanding whether the apartment be designed for residence, for office, for the operation of any industry or business, or for any other type of independent use, provided it has a direct exit to a thoroughfare or to a given common space leading to a thoroughfare;

(b) "Coowner" means a person, firm, corporation, partnership, association, trust or other legal entity, or any combination thereof, who owns an apartment within the building;

(c) "Council of coowners" means all the coowners as defined in subsection (b) of this section; but a majority as defined in subsection (f) of this section, shall, except as otherwise provided in this act constitute a quorum for the adoption of decisions;

(d) "General common elements" means and includes:

(1) The land on which the building is located;

(2) The foundations, main walls, roofs, halls, lobbies, stairways, and entrance and exit or communication ways;

(3) The basements and roofs, except as otherwise provided or stipulated;

(4) The premises for the lodging of janitors or persons in charge of the building, except as otherwise provided or stipulated;

(5) The compartments or installations of central services such as power, light, gas, cold and hot water, refrigeration, reservoirs, water tanks and pumps, and the like;

(6) The elevators, garbage incinerators and, in general all devices or installations existing for common use;

(7) Yards, gardens, walkways, parking areas, driveways, streets, picnic areas, recreational areas and related facilities for the pursuit of activities, whether included in one or more regimes or located adjacent to or between one or more regimes and intended to be available for use by the coowners of all regimes, except as otherwise provided or stipulated; and

(8) All other elements rationally of common use or necessary to the existence, upkeep and safety of the property;

(e) "Horizontal property regime" means the form of ownership of real property which consists of the building or buildings, common elements and other property described in the master deed creating and establishing the same.

(f) "Limited common elements" means and includes those common elements which are agreed upon by all the coowners to be reserved for the use of a certain number of apartments to the exclusion of the other apartments, such as special corridors, stairways and elevators, sanitary services common to the apartments of a particular floor, and the like;

(g) "Majority" or "Majority of coowners" means the coowners of at least 51% of all the apartments in the regime;

(h) "Master deed" means the deed establishing the horizontal property regime;

(i) "Person" means an individual, firm, corporation, partnership, association, trust or other legal entity, or any combination thereof;

(j) "Property" means and includes all the lands, all the buildings, all improvements and structures thereon, and all easements, rights and appurtenances belonging thereto, included in one regime, or in two or more regimes, provided such regimes together constitute a single community.

(k) "Regime" means the property described in the master deed.

L.1963, c. 168, s. 2. Amended by L.1978, c. 124, s. 1, eff. Oct. 5, 1978.

Whenever a sole owner or the coowners of a building expressly declare, through the recordation of a master deed, which shall set forth the particulars enumerated in section 9, their desire to submit their property to the regime established by this act, there shall thereby be established a horizontal property regime. The coowners of property established as a single horizontal property regime may merge with the coowners of property in one or more other regimes to form a new single horizontal property regime, upon the consent of a majority of the coowners of the property in each of the merging regimes.

L.1963, c. 168, s. 3. Amended by L.1978, c. 124, s. 2, eff. Oct. 5, 1978.

Where the coowners of the apartments in two or more regimes, which together constitute a single community, are organized into a single entity, such as, but not limited to, a corporation formed under Title 15 of the Revised Statutes of the State of New Jersey, the provisions of this act shall apply to such an entity with the same force and effect as they would if such an entity were in fact a single regime.

L.1978, c. 124, s. 11, eff. Oct. 5, 1978.

Once the property is submitted to the horizontal property regime, an apartment in the regime may be individually conveyed and encumbered and may be the subject of ownership, possession or sale and of all types of juridic acts inter vivos or mortis causa, as if it were sole and entirely independent of the other apartments in the regime of which it forms a part, and the corresponding individual titles and interests shall be recordable.

L.1963, c. 168, s. 4. Amended by L.1978, c. 124, s. 3, eff. Oct. 5, 1978.

Any apartment may be held and owned by more than one person as joint tenants, as tenants in common, as tenants by the entirety or in any other real estate tenancy relationship recognized under the laws of this State.

L.1963, c. 168, s. 5.

In each regime an apartment owner shall have the exclusive ownership of his apartment and shall have a proportionate undivided interest in the general common elements, equivalent to the percentage of the aggregate value of all the apartments represented by the value of his own apartment. Where limited common elements have been reserved for the use of his apartment, his proportionate undivided interest therein shall be equivalent to the percentage of the aggregate value of all apartments entitled to the use of said limited common elements represented by the value of his own apartment.

For the sole purpose of establishing said percentages, the value of each apartment and the aggregate value of all the apartments in the regime shall be fixed by the owner or coowners of the property making up the regime, and shall be computed on the basis of the fair market value of said apartments at the time when the regime is established; provided, however, that nothing herein contained shall prevent the owner of each apartment from attributing a different circumstantial value to his apartment in all types of acts and contracts. Said percentages shall have a permanent character, and shall not be altered without the acquiescence of the coowners of all the apartments in the regime.

L.1963, c. 168, s. 6. Amended by L.1978, c. 124, s. 4, eff. Oct. 5, 1978.

The common elements, both general and limited, shall remain undivided and shall not be the object of an action for partition or division of the co-ownership. Any covenant to the contrary shall be void.

L.1963, c. 168, s. 7.

Each co-owner may use the elements held in common in accordance with the purpose for which they are intended, without hindering or encroaching upon the lawful rights of the other co-owners.

L.1963, c. 168, s. 8.

The master deed creating and establishing the horizontal property regime shall be executed by the owner or owners of the property making up the regime and shall be recorded in the office of the county recording officer of the county where such property is located. The master deed shall express the following particulars:

(a) The description of the land and the building, expressing their respective areas;

(b) The general description and number of each apartment, expressing its area, location and any other data necessary for its identification;

(c) The description of the general common elements of the property, and, in proper cases, of the limited common elements restricted to a given number of apartments, expressing which are those apartments;

(d) The respective percentage appertaining to each apartment in the expenses of, and rights in, the elements held in common, both general and limited; and

(e) The name by which the horizontal property regime is to be known followed by the words "Horizontal Property Regime."

L.1963, c. 168, s. 9.

There shall be attached to the master deed, at the time it is filed for record, a full and exact copy of the plans of the building, which copy of plans shall be entered of record along with the master deed. Said plans shall show graphically all particulars of the building including, but not limited to, the dimensions, area and location of each apartment therein and the dimensions, area and location of common elements affording access to each apartment. Other common elements, both limited and general, shall be shown graphically insofar as possible and shall be described in detail in words and figures. Said plans shall be certified to by an engineer or architect authorized and licensed to practice his profession in this State.

L.1963, c. 168, s. 10.

Each apartment in a building shall be designated, on the plans referred to in section 10 of this act, by letter or number or other appropriate designation and any conveyance, or other instrument affecting title to said apartment, which describes the apartment by using said letter or number followed by the words "in Horizontal Property Regime" shall be deemed to contain a good and sufficient description for all purposes. Any conveyance of or other instrument affecting title to an individual apartment shall be deemed to also convey the undivided interest of the owner in the common elements, both general and limited, appertaining to said apartment without specifically or particularly referring to same.

L.1963, c. 168, s. 11.

Two-thirds of the coowners or the sole owner of property constituted into a horizontal property regime may waive this regime and regroup or merge the records of the individual apartments with the principal property, provided, that the individual apartments are unencumbered, or if encumbered, that the creditors in whose behalf the encumbrances are recorded agree to accept as security the undivided portions of the property owned by the debtors.

L.1963, c. 168, s. 12. Amended by L.1978, c. 124, s. 5, eff. Oct. 5, 1978.

The merger provided for in section 12 shall in no way bar the subsequent constitution of the property into another horizontal property regime whenever so desired and upon observance of the provisions of this act.

L.1963, c. 168, s. 13.

The administration of every property constituted into a horizontal property regime shall be governed by by-laws which shall be inserted in or appended to and recorded with the master deed.

L.1963, c. 168, s. 14.

The bylaws must necessarily provide for at least the following:

(a) Form of administration, indicating whether this shall be in charge of an administrator or of a board of administration, or otherwise, and specifying the powers, manner of removal, and, where proper, the compensation thereof.

(b) Provisions for notices of meetings of coowners containing a statement of the purpose of the meeting; method of notifying and calling or summoning the coowners to assemble; that all decisions, including decisions involving capital expenditures, shall require the affirmative vote of at least a majority of the coowners of the property; who is to preside over the meeting and who will keep the minute book wherein the resolutions shall be recorded.

(c) Care, upkeep and surveillance of each building and the general and limited common elements and services of each building.

(d) Manner of collecting from the coowners for the payment of the common expenses.

(e) Designation and dismissal of the personnel necessary for the works and the general and limited common services of each building.

The sole owner of the property, or, if there be more than one, a majority of the coowners of the property, may at any time modify the system of administration, but each one of the particulars set forth in this section shall always be embodied in the bylaws. No such modification may be operative until it is embodied in a recorded instrument which shall be recorded in the same office and in the same manner as was the master deed and original bylaws of the horizontal property regime involved.

L.1963, c. 168, s. 15. Amended by L.1978, c. 124, s. 6, eff. Oct. 5, 1978.

The administrator, or the board of administration, or other form of administration specified in the bylaws, shall keep books with a detailed account, in chronological order, of the receipts and expenditures affecting the property and its administration and specifying the maintenance and repair expenses of the common elements and any other expenses incurred. Said books and the vouchers accrediting the entries made thereupon shall be available for examination by all the coowners at convenient hours on working days that shall be set and announced for general knowledge.

L.1963, c. 168, s. 16. Amended by L.1978, c. 124, s. 7, eff. Oct. 5, 1978.

The council of co-owners shall have the irrevocable right, to be exercised by the administrator, or the board of administration, or other form of administration specified in the by-laws, to have access to each apartment from time to time during reasonable hours as may be necessary for the maintenance, repair or replacement of any of the common elements therein or accessible therefrom, or for making emergency repairs therein necessary to prevent damage to the common elements or to another apartment or apartments.

L.1963, c. 168, s. 17.

The coowners of the apartments are bound to contribute pro rata toward (a) the expenses of administration, of furnishing services and of maintenance and repair of the exterior of each building and of the general common elements, and, in the proper case, of the limited common elements, of the property; (b) the expenses relating to the maintenance and servicing of recreational areas and related facilities and expenses involved in furnishing services to coowners and in furnishing for coowners areas and facilities for pursuing activities;and (c) any other expense lawfully agreed upon.

The amount of each contribution shall be computed by the administrator, or the board of administration, or other form of administration specified in the bylaws, and with respect to the expenses referred to under (a) above may be based upon the assessed valuation of the apartment, or such other basis of computation as in the opinion of the administrator, or the board of administration, or other form of administration specified in the bylaws, is more equitable, and with respect to the expenses referred to in (b) above shall be based upon a per capita assessment against each occupant, and with respect to the expenses referred to under (c) above, upon the basis agreed upon.

No coowner may exempt himself from contributing toward such expenses by waiver of the use or enjoyment of the common elements or by abandonment of the apartment belonging to him.

L.1963, c. 168, s. 18. Amended by L.1978, c. 124, s. 8, eff. Oct. 5, 1978.

Each co-owner shall comply strictly with the by-laws and with the administrative rules and regulations adopted pursuant thereto, as either of the same may be lawfully amended from time to time, and with the covenants, conditions and restrictions set forth in the master deed or in the deed to his apartment. Failure to comply with any of the same shall be ground for a civil action to recover sums due, for damages or injunctive relief, or both, maintainable by the administrator, or the board of administration or other form of administration specified in the by-laws on behalf of the council of co-owners or, in a proper case, by an aggrieved co-owner.

L.1963, c. 168, s. 19.

(a) Subsequent to recording the master deed as provided in this act, and while the property remains subject to this act, no lien shall arise or be effective against the property. During such period liens or encumbrances shall arise or be created only against each apartment and the percentage of undivided interest in the common elements appurtenant to such apartment, in the same manner and under the same conditions in every respect as liens or encumbrances may arise or be created upon or against any other separate parcel of real property subject to individual ownership; provided that no labor performed or materials furnished with the consent or at the request of a co-owner or his agent or his contractor or subcontractor, shall be the basis for the filing of a lien pursuant to article 10 of chapter 44 of Title 2A of the New Jersey Statutes against the apartment or any other property of any other co-owner not expressly consenting to or requesting the same, except that such express consent shall be deemed to be given by the owner of any apartment in the case of emergency repairs thereto. Labor performed or materials furnished for the common elements, if duly authorized by the council of co-owners, the administrator or board of administration or other administration specified by the by-laws, in accordance with this act, the master deed or by-laws, shall be deemed to be performed or furnished with the express consent of each co-owner and shall be the basis for the filing of a lien pursuant to article 10 of chapter 44 of Title 2A of the New Jersey Statutes against each of the apartments and shall be subject to the provisions of subparagraph (b) hereunder.

(b) In the event a lien against 2 or more apartments becomes effective, the owners of the separate apartments may remove their apartment and the percentage of undivided interest in the common areas and facilities appurtenant to such apartment from the lien by payment of the fractional or proportional amounts attributable to each of the apartments affected. Such individual payment shall be computed by reference to the percentages appearing in the master deed. Subsequent to any such payment, discharge or other satisfaction the apartment and the percentage of undivided interest in the common elements appurtenant thereto shall thereafter be free and clear of the lien so paid, satisfied or discharged. Such partial payment, satisfaction or discharge shall not prevent the lienor from proceeding to enforce his rights against any apartment and the percentage of undivided interest in the common elements appurtenant thereto not so paid, satisfied or discharged.

L.1963, c. 168, s. 20.

Upon the sale or conveyance of an apartment, all unpaid assessments against a co-owner for his pro rata share in the expenses to which section 18 refers shall first be paid out of the sales price or by the acquirer in preference over any other assessments or charges of whatever nature except the following:

(a) Assessments, liens, and charges for taxes past due and unpaid on the apartment; and

(b) Payments due under mortgage instruments of encumbrance duly recorded.

L.1963, c. 168, s. 21.

The purchaser of an apartment shall be jointly and severally liable with the seller for the amounts owing by the latter under section 18 of this Title up to the time of the conveyance, without prejudice to the purchaser's right to recover from the other party the amounts paid by him as such joint debtor. The council of co-owners shall provide for the issuance and issue to any purchaser, upon his request, a statement of such amounts due by the seller and the purchaser's liability under this section shall be limited to the amount as set forth in said statement.

L.1963, c. 168, s. 22.

The coowners, as such, or the administrator, or the board of administration, or other form of administration specified in the bylaws, shall insure all buildings and the general and limited common elements against risk, without prejudice to the right of each coowner to insure his apartment on his own account and for his own benefit.

L.1963, c. 168, s. 23. Amended by L.1978, c. 124, s. 9, eff. Oct. 5, 1978.

In case of fire or any other disaster the insurance indemnity shall, except as provided in the next succeeding paragraph of this section, be applied to reconstruct the building.

Reconstruction shall not be compulsory where it comprises the whole or more than 2/3 of the building. In such case, and unless otherwise unanimously agreed upon by the co-owners, the indemnity shall be delivered pro rata to the co-owners entitled to it in accordance with provision made in the by-laws or in accordance with a decision of 3/4 of the co-owners if there is no by-law provision.

Should it be proper to proceed with the reconstruction, the provisions for such eventuality made in the by-laws shall be observed, or in lieu thereof, the decision of the council of co-owners shall prevail.

L.1963, c. 168, s. 24.

Where any building is not insured or where the insurance indemnity is insufficient to cover the cost of reconstruction, the new building costs shall be paid by all the coowners directly affected by the damage, in proportion to the value of their respective apartments, or as may be provided by said bylaws; and if so provided in the bylaws such costs shall be paid by the administrator, or the board of administration, or other form of administration specified in the bylaws.

The provisions of this section may be changed by unanimous resolution of the parties concerned, adopted subsequent to the date on which the fire or other disaster occurred.

L.1963, c. 168, s. 25. Amended by L.1978, c. 124, s. 10, eff. Oct. 5, 1978.

All property taxes, assessments and other charges of any taxing district shall be assessed against and collected on each individual apartment, each of which shall be carried on the tax books as a separate and distinct entity for that purpose, and not on the building or property as a whole. Such assessments shall include the value of the proportionate undivided interest of each apartment in the general common elements, and in the limited common elements where such interest exists. The proportionate undivided interest of each apartment in said common elements shall be computed in accordance with the procedure established by section 6 of this act. All laws authorizing exemptions from taxation or deductions from tax bills shall be applicable to each individual apartment to the same extent they are applicable to other separate property.

L.1963, c. 168, s. 26.

Nothing herein contained shall prohibit any council of co-owners from incorporating pursuant to the provisions of Title 14 of the Revised Statutes for the purpose of the administration of the building constituted into a horizontal property regime. In the event of any such incorporation, the percentage of stock interest of each co-owner in the corporation shall be equal to the percentage of his right to share in the common elements as computed in accordance with the provisions of section 6 of this act.

L.1963, c. 168, s. 27.

If any provision of this act is held invalid such invalidity shall not affect other provisions hereof, and to this end the provisions of this act are declared to be severable.

L.1963, c. 168, s. 28.