Jonathan Katz, Esquire

Upon receipt of the Community Associations Institute (CAI) magazine, a magazine that I value, and use as a vehicle to help keep me current and updated on community matters, as always, I read through it and came upon a very interesting article entitle “Is Your Community Paying Twice” The minute I finished reading I immediately reached for the phone and contacted the author, Mr. Katz to ask permission to place the article in our news letter. He was very gracious and even volunteered to speaks to our members if we so desire. This article speaks about some of the issues that we hope C.O.L.T. 590 will be able to address. Home owners involved in this association continue to hold meetings and discuss issues of concern. All seven communities are represented at the meetings and some individuals have stepped forward to volunteer for officer positions. We will soon hold meetings for the purpose of beginning to structure the association. I hope after reading Mr. Katz’ article, you will agree on the importance and the need we all have to address these issues.

By Jonathan Katz, Esquire

“You may be surprised to find out that the answer to this question across most of the country is YES. In most states, municipalities provide certain municipal services — such as snow removal, trash collection, recycling and street lighting — to residents of traditional single family homes, but do not offer the same services to residents of condominiums or other common interest communities. Yet, owners in these communities pay the same property taxes as single family homeowners in addition to their respective common expense assessments, essentially requiring that owners in community associations pay twice to receive basic municipal services, such as a weekly trash pick-up or the plowing of their streets following a snow storm.

In order to eliminate this “double taxation” problem, in 1991, New Jersey enacted the Municipal Services Act1 (the “Act”), which was the first legislation in the country to address municipal services equalization for common interest communities. Pursuant to the Act, every municipality in New Jersey is required to either provide certain services to each qualified private community within its borders or reimburse the association for these services, including snow removal, trash collection and recycling. The purpose of the Act, as discussed in the legislative sponsor’s statement, to require “that a municipality enact ordinances to provide the same services along the roads and streets of a qualified private community as it provides to other residents along its public roads and streets.” 2 The New Jersey Appellate Division has further determined that the Act was created for the purpose of eliminating “double payment for some services which the residents of qualified private communities now pay through property taxes and fees to their association.”

Although the Act went into effect in January of 1993, many qualified community associations in New Jersey fail to take advantage of having municipalities provide these services — or to request reimbursements for them — simply because they are unaware that they are entitled to such municipal services. This means countless associations may be entitled to significant reimbursements that could be used to free up other funds for capital reserves, necessary repairs, or long-overdue improvements to their communities.

While not unique, New Jersey is one of few states that provide for such benefits to its residents. The Commonwealth of Pennsylvania, for instance, generally does not mandate municipalities to provide such services. That may start to change due to the legislative efforts going on in the City of Philadelphia. In June 2002, Philadelphia City Council passed legislation that would have required the City to provide no-cost trash collection and recycling for condominiums and co-ops; however, the Mayor refused to enforce this legislation. Although the Council took the Mayor to Court and won, the victory proved to be a hollow one, as the City has refused to provide funding to carry out the mandates of this legislation.

In February of 2007, Bill 070073 was introduced in the Philadelphia City Council, sponsored by Councilmen Jim Kenney and Frank DiCicco, which would have provided a tax credit for owners of condominiums and co-ops who do not currently receive regular city trash collection, recycling and bulk item collection services.

Similar to New Jersey’s Municipal Service Municipal Services Act, Bill 070073 sought to remedy the inequities suffered by members of common interest communities in the City and eliminate double taxation by reimbursing tax payers in these community associations for trash hauling expenses, which are normally privately funded by assessments paid by unit owners to their respective association. While this legislation was not enacted in the previous term, Councilmen Kenney’s office has confirmed that he intends to work with newly elected Mayor Michael A. Nutter and his administration in order to address this issue in the coming months.

Only time will tell how Pennsylvania and other states will handle the issue of municipal services equalization and the problem of double taxation of common interest communities. It is possible that the elected representatives in these states will enact legislation similar to that of New Jersey’s Municipal Services Act, which provides at least some relief to community association members. Until then, owners in these communities continue to pay the same property taxes as single family homeowners on top of their respective common expense assessments, essentially paying double for their municipal services.’’

Jonathan H. Katz is an associate in the Community Associations Group at Stark & Stark, P. C., which has offices in Philadelphia and Newtown, Pennsylvania, and in Princeton and Marlton, New Jersey. Stark & Stark’s Community Associations Group represents over two hundred (200) community associations throughout Pennsylvania, New York and New Jersey.

Mr. Katz speaks of nationwide issues, and a multitude of local issues. These local issues I believe we should pinpoint and concentrate on, the most important being local, county and state wide, political representation. I have no doubt, the wrong that is taking place toward the property owners in this day and age will some day be righted, I’m not sure if we or some other generation will get it done. I want to bring to light the position we’re in and suggest to all property owners that they should unite to address all these issues, no one will do it for us, and I believe the only way is to address it politically by attending COLT 590 meetings which are announced in our weekly messages, and on our TV Station Channel 80.

For those of you who are not familiar with COLT 590 it is a newly formed association consisting of, and represented by seven communities located in Lackawaxen, all of whom have the betterment of their individual community at heart.

Hope to see you all at the meetings.

Adam Gallini

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