Managing Municipal Reimbursements Who Pays What, and When?

Let’s imagine that your boss invites you to a group dinner to celebrate her recent promotion. At dinner, you have a tasty salad and one glass of the house red, but your colleagues all have multiple cocktails; somebody orders the surf-and-turf, and all of a sudden, desserts start appearing. Then the check comes, and your heart sinks as “Let’s just split it five ways” quickly becomes the consensus. Why should you subsidize Jim-from-Accounting's steak? You didn't eat any of it, and he makes way more money than you do anyway.  

If a skewed dinner bill is enough to make you fume, imagine sorting out the obligations, reimbursements and guidelines of municipalities versus homeowners associations when it comes to things like road and street maintenance, garbage and snow removal, and other civil necessities. Some states mandate how cities, towns and villages must handle the division of expenses between municipality and private HOAs...others like Illinois don't. It's an issue that can divide communities and cost condo owners a pretty penny. 

Different Strokes...

Condos and HOAs in different regions around the country approach the issue of divvying up the aforementioned tasks in different ways. In New Jersey, for example, that state's Municipal Services Act (referred to hereafter as the “Act”) provides qualified private communities with maintenance services, or reimburses those communities for the cost of obtaining them elsewhere. The Act covers removal of snow, ice and other obstructions from the roads and streets; lighting of the roads and streets (to the extent of payment for the electricity required, but not including the installation of maintenance of lamps, standards, wiring or other equipment), and collection and disposal of leaves and recyclable materials, as well as solid waste along the roads and streets.

According to attorney Eric F. Frizzell, a partner with the law firm of Buckalew Frizzell & Crevina, LLP in Glen Rock, New Jersey, “The Act is intended to help eliminate double payment for these services by residents of qualified communities who pay for them both through their property taxes and association common charges.” 

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