Mendham Lakes Estates Member Continues to Try and Review All Books and Records But Is Consistently Resisted by the Recalcitrant Board

Thomas E. Maloney Attorney
Debby Strott, Daniel Rosen
and The Board of Trustees
MLEHOA
PO Box 173
Ironia NJ 07845

In Re: Continuous Attempt to Review MLEHOA Books & Records

Dear Board,

I am in receipt of your letter of October 14, 2009.

Though you vaguely refer to N.J.S.A. 15A, the Association by-laws and a particular case, you fail to provide a specific citation which you believe affords the Board, at its sole discretion, the right to deny the membership from reviewing the books & records. Just generally saying so does not make it so. In refutation of your self-serving opinion, in fact, The New Jersey Department of Community Affairs, Division of Codes and Standards, Bureau of Home Owner Protection’s “Association Regulation Initiative” states that access to financial records shall be granted to members. Section 16(d) of the N.J.S.A 46-8b-14(g) “empowers the Department, acting through the Bureau of Homeowner Protection, to enforce this right of inspection. The right of inspection includes the right to make copies.” I urge the Board to be open and transparent as much as possible and when a particular situation warrants discretion, the Board should offer some reason and not simply deny requests with no apparent logical explanation. Also, according to the New Jersey Department of Community Affairs the Non-Profit Corporation Act, Title 15A, which you refer to generally, requires audits which the Board has fought so hard against. Any member is allowed to review books & records of a Homeowners Association and The Association Regulation Unit has the authority under N.J.S.A. 46:8b-16(d) to ensure an association responds to membership requests to review and copy the financial records required to be kept.” Note the Association is required to maintain the accounting records, in accordance with Generally Accepted Accounting Principles (G.A.A.P.). Obviously, given the Board’s history of mishandling the books & records and Association operations, it has failed on both these responsibilities. This is irrefutable given the Board’s reckless behavior as exampled by not filing annual state reports causing the Association’s corporate status to be suspended, not collecting half the Association dues in a given year, etc. As you should be aware, N.J. law provides for more accountability to owners in common interest community. Condominiums and Homeowners Associations (HOAs) are governed in this regard by New Jersey's Planned Real Estate Development Full Disclosure Act ("PREDFDA"). The New Jersey Department of Consumer Affairs, Bureau of Homeowner Protection accepts complaints from Homeowners Association members as well as Condominium Association members utilizing the same law previously cited. According to Ms. Jane DiCristina Director of Association Regulation in the Department of Consumer Affairs, the standards for transparency for condominium associations are the same for homeowners associations. To be more specific and to quote her directly:



"We would support your right (or any other owner in the homeowner's association) to access financial information by using language from both the Planned Real Estate Development Full Disclosure Act and the Condominium Act."
-Ms. Janet DiCristina, Association Regulation, N.J.D.C.A.

You erroneously state in your letter that I was “never refused access to a review of the Association’s books of account”. While your memory may be faulty, the record is not. The stenographic transcript of the June 30, 2006 Motion hearing before Judge MacKenzie incontrovertibly shows the Board argued, through attorney Mr. Gregory Hyman that the Board was of the belief that it did not have to cooperate with my multiple books & records inspection requests over an period of almost one-year. As it turns out this opinion had no basis and was utterly rebuffed by the Court. To refresh your memory, below is the relevant verbatim exchange from the transcript:

Mr. Hyman: And the Board of trustees believed they did not have to respond to someone who was not in good standing.

Judge MacKenzie: Is there something in the bylaws that says that or is that –

Mr. Hyman: The bylaws are silent on that issue, your Honor, but that is the belief that they had.

---Source; Stenographic Transcript of Motion, June 20, 2006 before Judge MacKenzie; page 15 para.6

As it turns out what was your “belief” is not a legal basis for denying a member access to the Association’s books & records. I’m sure what was true in 2006 is true today. The Court dismissed your opinion or “belief” as it were, entirely and completely. Your recollection of the facts today is refuted by the transcript of what you argued three years ago. Note that this argument was totally rejected by the Court as it ordered the Association to provide access to the books & records. Notably absent in the Court’s subsequent order was any mention that it was at the Board’s discretion as to what could be viewed by a member.

The unsigned letter that you provided presumably from Thomas E. Sheridan seems to be in response to my request for the Association’s insurance loss run. However it is not sufficient as it is not a loss-run of the Association. Though I have asked twice for the Board to give Mr. Sheridan permission to answer any questions I may have, to date the Board has ignored my requests.

You continue to maintain that no cash deposits have been made. If you believe this is true, then the Board should not have a problem in asking the bank to provide all details regarding cash transactions –including deposit information related to the dates in question. Specifically, $1,000.00 on January 16, 2004, $1,500.00 on March 15, 2005 and $2,500.00 on March 30, 2005. I request the Board provide me access to this bank documentation for these dates.

Unless the Board can show that the information any member requests is privileged, the Board should produce any documentation requested. It is my opinion and that of many expert legal sources (specifically Mr. Christopher Florio, Co-Chair of Stark & Stark Community Association Group) that almost all functions of the Association, including documentation, should be open and available to the members of the Association as they relate to the general operation of the Association.

In both Judge MacKenzie’s July 13, 2006 Order and Judge Langois’ March 23, 2007 Order, the Board was ordered to allow me to “inspect the books & records of the Association.” The judges made no mention that what was to be provided should be determined by the Board.

As a reasonable matter, your contumacious in maintaining the unwarranted opinion that the books & records should not be provided to the membership, without you ever providing a logical reason for such an opinion, will not further any Association interests. In fact it will result in more Association time and resources being wasted simply to defend some specific Board member’s personal interests. Without the Board’s full cooperation in providing access to books & records to the membership, times when the Board is deficient in its responsibilities and fiduciary duties could go undiscovered at the Association’s peril. Such was the case when I discovered that the Board had neglected to file two consecutive years of annual reports with the State of New Jersey as required by law and the Association’s corporate charter and ability to conduct business in the State was revoked. It should be noted that the Board, in violation of its suspended corporate status, continued to operate in the State of N.J.

If the Board spent as much effort providing full access to Association’s books & records as it does fighting transparency and openness, these situations perhaps could be avoided.