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Massive 2025 Fee Increase by Kevin Wine, Nov 24, 2024, 1:42 PM, reply, branch, edit

It took a little over 5 years, but the $300+/month maintenance fees are finally here. At the November 19th, 2024 board meeting, the board voted to increase the the monthly maintenance fee to $332 beginning January 1, 2025. That is an increase of $97/month, the largest in Society Hill history. The annual budget is now over $2,000,000.

Anthony Blanco, Zahid Khan, and Kevin Wine did NOT support the motion, but there were 4 other trustees that voted in favor so the increase was approved. There is another election starting in 8 months in which two of those 4 trustees are up for election, but for now it looks like we are stuck with this increase. The board knew about the insurance premium increase last year but found other ways to come up with the additional premium (taking the escrow money) so they wouldn't have to increase the fees for 2024. They knew this was a critical election year for them, so they didn't want to do anything that would result in them loosing the election.

I have previously explained two of the forces behind the fee increase - the recent $400k increase in the property/liability insurance premium, and the recent NJ State law which mandated full reserve study funding for all condo associations.

I found out at the meeting that there is a little bit more of a story behind the reserve funding law. It turns out the "Community Associations Institute", the CAI, was behind the law. The CAI is the club of condo industry service providers - the management companies, condo attorneys, landscaping contractors, maintenance contractors, paving contractors, roofing contractors, snow removal contractors, etc. - that appear on the outside to be on our side, but behind the scenes support every effort to separate us from our money.

On the surface, the motivation for the recent state law was the condo collapse in Florida. That's all well and good, until you look closer and realize our buildings are not the same type of construction as the one in Florida. Wood construction doesn't fail like that, and yet the rules for steel-reinforced concrete buildings are being applied to us. Furthermore, the law applies to all the surrounding infrastructure such as the roads, walks, walls, sprinklers, etc., that have absolutely zero impact on structural building integrity. We are being forced to fully fund all the capital reserve study items, as prepared by the study's engineers, and amounting to several million dollars over the 30 year study period. We are no where near in compliance - and more fee increases will be forthcoming. My next projection is $500+/month, unless there are further changes to the board.

The associations legal counsel, Susan Radom, was at the Tuesday meeting. As expected, she was advising the board on possible legal ramifications of not following the new reserve funding law, which of course is going to scare some board members into compliance with the CAI's agenda of getting as much of our money as possible. The reality is much more nuanced, but again most trustees are not going to have the backbone to stand up to industry forces.

In the meantime, there are three things which can be done. I seem to recall that over a million NJ homeowners live in condos, and will be impacted by the legislatures actions. We are not the only ones seeing our fees go up by over 40%. I suspect there will be some political backlash, and I'm a little bit concerned this could have a negative impact on the condo market in NJ. It would be good to remind your state representatives that some of them are up for election next year too - including the governor. I included contact information for our state representatives at the end of this message.

The second thing that needs to happen is every effort has to be made by this board to minimize the cost of the numerous capital repairs that we are now essentially forced to do. It should not cost $750,000 to refurbish/replace all the condo steps. It should not cost $55,000 to replace a roof. We should not have let the repaving project inflate from $268k to $500k. We should not have spent over $400k removing the hill and the serious over-kill drainage project behind Harwick (there were much cheaper ways of getting that done). At the same time, this board has to not let itself fall into the trap of further minimizing and neglecting the day-to-day operations in order to pinch every penny. I'm sure everyone is already angry enough - dropping the service level will only stoke the fire.

The third thing that needs to happen is the various out-of-the-box ways of increasing our revenues and decreasing our expenses need to be seriously reconsidered. I was in the middle of several of these projects before Tong Zhou's hostile takeover in 2018 and the immediate cancelling of everything I was doing. I don't know if a majority of the current board has the bravery to pursue these ideas, but if there are alternatives they owe it to us to seriously consider them.

I am fully expecting the increase to be directly or indirectly blamed on me. The board has yet to send any public statement announcing what they just did, and I am not privy to any message that is being prepared. Hopefully the entire board will see such a message before it is sent. Regardless, they have only themselves to blame for systematically dismantling the prior society hill management structure and leaving us totally vulnerable to exploitation by the condo industry. By now we would have had the maintenance building done and we would be fully setup to take on most of these larger scale repair projects, which would have saved us hundreds of thousands of dollars, provided better service, and happier residents.

Kevin

Here is the contact information for our state representatives:

Governor Phil Murphy, 609-292-6000, constituent.relations@nj.gov, The State House, PO Box 001, Trenton, NJ 08625
Senator Bob Smith, 732-752-0770, 216 Stelton Rd, Suite E-5, Piscataway, NJ 08854
Assemblyman Joe Danielsen, 732-247-3999, 334 Elizabeth Ave., Somerset, NJ 08873
Assemblyman Kevin Egan, 732-249-4550, 100 Bayard St., New Brunswick, NJ 08901

There are no email address provided for the state assembly members - just phone and address. There is a webform to fill out, which I assume will send an email. You have to search on "District", and select "Piscataway". We are District 17 by the way:

https://www.njleg.state.nj.us/legislative-roster

I would ask the legislature to exclude wood frame construction from the requirements of the Structural Integrity Bill S2760/A4384, or, at the very least, exclude items unrelated to building structural integrity from the reserve funding rules of S2760/A4384.

At the same time, I would ask the legislature to exclude condominium associations from requiring an irrigation contractors license to perform maintenance on their own irrigation system, under N.J.S.A. 45:5AA-3, "Business permit, certification for landscape irrigation contractors". (This is another attempt to create a monopoly for irrigation contractors in NJ condominium associations).