Enforcement of Furnace Efficiency Standards Delayed… Again
May 21, 2013
The high efficiency furnace rules case has taken a new procedural turn. On May 1, 2013, a panel of the U.S. Court of Appeals for the District of Columbia Circuit issued an emergency order staying implementation of the new rules requiring non-weatherized gas furnaces installed in the northern regions of the country to be 90% efficient. That order did not resolve the case but rather simply put on hold the application of the proposed regulations until the court actually rules on the propriety of a settlement agreement entered by the parties. The effect of this ruling is that the new standards did not take effect on May 1, 2013 as initially proposed, but no decision has yet been made whether they will take effect on a future date.
For those who have been following the issue, in 2011, the U.S. Department of Energy (DOE) promulgated new energy conservation standards for air conditioners and heating units. A portion of the new standards applies to new installations of non-weatherized gas furnaces on or after May 1, 2013 and increases the efficiency requirements of those units from 78% to 90%. A lawsuit challenging the furnace standards on both substantive and procedural grounds was filed by the American Public Gas Association. The lawsuit was settled last year, and for several months, the settlement has been awaiting the approval of the appeals court. The DOE announced in April that it would not begin enforcing the new rules before the court rules on the settlement agreement. The recent court ruling neither approved nor disapproved the settlement but stayed implementation of the new rules, thus officially preventing the DOE from enforcing the rules for the time being. It also set some procedural requirements for the eventual hearing on the merits.
The proposed standards are significant to community associations because the new furnaces vent much differently than existing ones and require modifications to units and common elements, which may be difficult or impossible because of space limitations or building code issues.
You can view the District of Columbia Circuit’s order here.
For more information on this or any other issue concerning your community association, please contact one of our Community Associations attorneys. For breaking news or updates on new blog posts, follow us on Twitter at: @njcondolaw.
Hanson to Speak on Superstorm Sandy Claims at the 2013 New Jersey Cooperator’s Condo, HOA and Co-op Expo
April 30, 2013
Hill Wallack LLP Partner Gerard H. Hanson, Esq. will be speaking during a seminar titled “Superstorm Sandy: Protecting Your Community by Pursuing Your Claim” at the 2013 New Jersey Cooperator’s Condo, HOA and Co-op Expo, on Wednesday, May 1, 2013, at the Meadowlands Exposition Center in Secaucus, New Jersey. This seminar, which will be held at 1:00pm – 2:00pm, in Seminar Room 1, will discuss how to protect your association by avoiding common pitfalls in pursuing damage claims. Learn to navigate the complicated claims process in order to maximize recovery in the least amount of time. A question and answer portion will follow the presentation.
Presenting with Jerry Hanson will be Alan Garfinkel, Esq. of Katzman Garfinkel & Berger, who is one of the nation’s leading authorities on Natural Disaster law.
For more information or to register to attend, click here!
Enforcement of Furnace Efficiency Standards Delayed
April 25, 2013
The Department of Energy (DOE) has announced that it will not enforce the rules requiring more efficient residential natural gas furnaces that were to go into effect May 1, 2013, pending the outcome of the lawsuit challenging those rules and an anticipated settlement requiring re-evaluation of the standards to be applied. The new rules would have required at least 90% efficiency for non-weatherized gas furnaces installed in New Jersey and other northern states after April 30. The proposed standards are significant to community associations because the new furnaces vent much differently than existing ones and require modifications to units and common elements, which may be difficult or impossible because of space limitations or building code issues.
The lawsuit has resulted in a settlement that would vacate the rules, but that settlement requires the approval of a Federal Appeals Court, which has not yet scheduled a hearing on the issue. Although the rules remain intact, the DOE will not enforce them. According to the DOE’s statement, “In an exercise of its enforcement discretion, DOE will, during the pendency of the litigation, act in a manner consistent with the terms of the settlement agreement with regard to the enforcement of the standards.”
Therefore homeowners may continue to install residential natural gas furnaces that do not meet the 90% efficiency rating, pending resolution of the case.
You can view the Enforcement Policy Statement here.
For more information on this or any other issue concerning your community association, please contact one of our Community Associations attorneys. For breaking news or updates on new blog posts, follow us on Twitter at: @njcondolaw.
Join Us at the New Jersey Cooperator’s Condo, HOA and Co-op Expo on May 1, 2013
April 22, 2013
Hill Wallack LLP’s Community Association Practice Group will be exhibiting at the 2013 New Jersey Cooperator’s Condo, HOA and Co-op Expo on Wednesday, May 1, 2013, 10:00 a.m. to 4:30 p.m., at the Meadowlands Exposition Center in Secaucus, New Jersey. Come say hello at Booth 435 and drop your business card for a chance to win a great prize!
Join board members, property managers, building owners and real estate professionals and meet building service companies, attend educational seminars and get your questions answered by a member of our team.
If you are involved in an insurance dispute relating to Super Storm Sandy, please ask us about reviewing your case free of charge. Contingent fees are available for Sandy representation.
For more information or to register to attend, click here!
Karpoff to Speak at Legal Forum on Critical Cases for New Jersey Community Associations
April 8, 2013
Recent judicial opinions in New Jersey have caused some confusion over alternative dispute resolution and restrictions on signs in communities. As a result of these cases, there are new twists to issues which previously appeared settled, causing association managers, board members and attorneys to seek definitive rules to guide their actions. Hill Wallack LLP Partner Michael S. Karpoff, Esq. will explore the current status of the law regarding these important issues and discuss standards and suggestions for association leaders and advisors to deal with such matters.
This seminar will be held at the Kings Grant Open Space Association Community Room, 50 Landings Dr., Marlton, NJ, on Friday, April 12, 2013. Registration begins at 8:30 a.m. Managers receive two hours of continuing education credit for attending this program. Registration fee includes continental breakfast.
For more information on this seminar or to register to attend, please click here.
New Development Regarding Furnace Efficiency Standards
April 5, 2013
In a previous post, we discussed a settlement of a lawsuit challenging the U.S. Department of Energy’s new furnace efficiency standards. There is an agreement to scrap the standards, which would require new gas furnaces installed in our region to increase efficiency from 78% to 90%. However, the settlement requires the approval of a Federal Appeals Court, which has not scheduled a hearing on the issue. The new standards are significant to community associations because the new furnaces vent much differently than existing ones and require modifications to units and common elements, which may be difficult or impossible because of space limitations or building code issues. The new standard will go into effect on May 1, 2013 unless the Court acts before that time.
In a recent development, one of the parties to the case, the Air-Conditioning, Heating and Refrigeration Institute (“AHRI”) has filed a motion to stay the implementation of the standards until after the Court rules on the settlement. If the Court approves the settlement, no further stay will be necessary. However if the Court does not approve the settlement, AHRI wants the standards to be delayed for at least six months after the Court’s ruling. There is no real opposition to the stay; the DOE’s reply to the motion just wants the stay limited to the portion of the rule that is the subject of the litigation. The need for the stay is obvious, since it is likely that the settlement vacating the rule will ultimately be approved. Of course, the Court can solve the problem by simply acting quickly to approve the underlying settlement. Stay tuned — we will keep you updated when there are further developments.
For more information on this or any other issue concerning your community association, please contact one of our Community Associations attorneys. For breaking news or updates on new blog posts, follow us on Twitter at: @njcondolaw.
Karpoff and Kessler Speak about Contracts at 2013 CCAL Law Seminar
April 3, 2013
Hill Wallack LLP Partners Michael S. Karpoff, Esq. and Terry A. Kessler, Esq. spoke on “Essentials of Community Association Contracts: From Regular Operations to Capital Projects” at the Community Associations Institute’s 34th Annual Community Association Law Seminar, presented by the College of Community Association Lawyers (CCAL), in Tucson, Arizona on January 26, 2013.
To view their powerpoint presentation and article on this important topic, please click here. Reprinted with permission of the Community Associations Institute.
New Efficiency Standards for Gas Furnaces Still in the Works
February 18, 2013
On January 14th, the American Public Gas Association (“APGA”) and US Department of Energy (“DOE”) submitted a joint motion to the D.C. Circuit Court of Appeals to vacate new regional efficiency standards for gas furnaces that were scheduled to go into effect on May 1, 2013. These new standards, which were originally published at 76 Fed. Reg. 37408 (June 27, 2011), had created concerns for community associations because of venting requirements that implicated general common elements. Specifically, the now vacated standardswould have required new gas furnaces installed in our region to increase efficiency from 78% to 90%. According to the APGA, who was the plaintiff in this action, 90% efficient furnaces require expensive venting modifications, including side venting. This is significant to community associations because side venting may be difficult or impossible because of space limitations or building code issues. Associations will therefore face requests to install new venting through common element walls or other space. The APGA challenged the standards on both substantive and procedural grounds. This settlement, if approved by the court, will apparently cause the DOE to go back to the drawing board on these standards and reopen the rulemaking process. The joint motion can be found here.
For more information on this or any other issue concerning your community association, please contact one of our Community Associations attorneys. For breaking news or updates on new blog posts, follow us on Twitter at: @njcondolaw.
Federal Appellate Ruling: Management Companies Are Not Subject To Fair Debt Collection Practices Act
January 18, 2013
A Federal Appeals Court has ruled that the Fair Debt Collection Practices Act (“FDCPA”), which imposes civil liability on debt collectors for certain prohibited practices, does not apply to community management companies that provide a variety of services to common interest communities. In Harris v. Liberty Community Management, Inc., the Eleventh Circuit Court of Appeals held that management companies are protected by a provision in the FDCPA that exempts individuals and entities whose collection responsibilities are “incidental to a bona fide fiduciary obligation.” This exemption would not apply to management companies whose central or primary obligation is the collection of assessments.
The homeowners association in the Harris case faced severe financial difficulties due to enormous delinquencies. In 2009, it amended its declaration to suspend water service to any home owing more than $750 in delinquent assessments. The amendment required at least three separate written notices of the intention to suspend service prior to the actual suspension. Shortly after the amendment was passed, the association’s managing agent, Liberty Community Management, Inc. (“Liberty”), sent the appropriate notices to the nineteen homeowners whose delinquent balances exceeded $750. Twelve homeowners made payment plans but seven, including Harris, had their service suspended.
Harris went to Georgia state court in an attempt to force the association to reconnect the water service but failed. She then filed suit in Federal court against Liberty alleging, among other things, that it had violated the FDCPA by sending the notices threatening to shut off the water service. Liberty moved for summary judgment on the grounds that it was not a “debt collector” covered by that Act. It specifically cited 15 U.S.C. § 1692a(6)(F)(i), which states that the definition of “debt collector” shall not include “any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement.”
The court reviewed Liberty’s management contract in detail. It contained the usual scope of work for managing agents, including arranging for the maintenance of the common areas and facilities, negotiating contracts for utilities and insurance, preparing a budget, maintaining the books and records of the association, managing the banking relationship, and the like. The collection of assessments was a specific duty contained in the contract. The court had no difficulty finding that Liberty owed the association a fiduciary obligation as its agent. Every function it performed, found the court, was as a fiduciary of the association.
The next question was whether the assessment collection responsibility was “incidental” to that fiduciary obligation. The court applied the dictionary definition of “incident”—something casual or of “secondary importance”—and determined that Liberty’s collection duties were incidental considering its broad scope of other responsibilities. The court said: “… Liberty did much more than just collect assessments for the Association and its homeowners; it also contracted for maintenance of the community’s common areas, obtained utilities (including gas, electricity and water), purchased insurance, investigated claims, made reports to insurance companies, kept and maintained ledgers and bank accounts, deposited money and wrote checks, reconciled monthly bank statements, and assisted the Association with its yearly tax filings.” These activities are not significantly different from those generally undertaken by full-service management companies in New Jersey and Pennsylvania. The court made it clear that the result would be different if assessment collection were management’s primary responsibility.
It is important to note that this case comes from the U.S. Eleventh Circuit Court of Appeals. Since New Jersey and Pennsylvania are within the jurisdiction of the Third Circuit Court of Appeals, this case is persuasive, but not binding. The Third Circuit could conceivably make a contrary ruling. However, the case is significant because both the District Court (trial level) and Court of Appeals ruled in favor of the managing agent on this issue.
The Eleventh Cicuit’s decision in Harris v. Liberty Community Management, Inc., decided December 19, 2012, can be found here.
For more information on this or any other issue concerning your community association, please contact one of our Community Associations attorneys. For breaking news or updates on new blog posts, follow us on Twitter at: @njcondolaw.
Justice Department Cracks Down on Fair Housing Discrimination
October 11, 2012
On October 10, 2012, the United States Justice Department filed a lawsuit in Florida against a 249 unit homeowners association and its former manager. The Justice Department alleges that the association violated the Fair Housing Act by discriminating against families with children.
The lawsuit charges that Townhomes of Kings Lake HOA, Inc., and its former managing agent violated the Fair Housing Act by adopting and enforcing policies that unduly limited the number of individuals who can reside in each townhome. The suit also alleges that the association violated the Fair Housing Act by threatening to evict a couple and their six minor children from a four-bedroom townhome they were renting and by taking other actions to interfere with their occupancy.
The lawsuit resulted from a complaint filed by the family with the Department of Housing and Urban Development (HUD). After they moved into the home, the management company and the association objected to the number of children living there. The association’s policy allowed only six individuals to occupy the home, which was far more stringent than what governmental regulations permitted. The association also adopted similarly restrictive limitations on the number of individuals who could live in two and three-bedroom townhomes in the development. HUD investigated the complaint, issued a charge of discrimination and the matter was referred to the Justice Department. The lawsuit seeks a court order prohibiting future discrimination by the association and management, monetary damages for the affected family, and a civil penalty.
While no judicial determination has been made regarding the validity of this complaint, the case illustrates why associations should exercise caution and seek the advice of counsel when considering occupancy restrictions.
You can read more about this lawsuit here.
If you have a question about this case or any other issue concerning your community association, please contact one of our Community Associations attorneys. For breaking news or updates on new blog posts, follow us on Twitter at: @njcondolaw.