New Jersey court backs condo collection fees but vacates an interest-rate bump
New Jersey court backs condo collection fees but vacates an interest-rate bump
2026-09-15 · New Jersey · Courts
A sixteen-year-old Cape May condominium fight produced a useful ruling in March 2026 on the two things associations most want to know about collection litigation: who pays the lawyers, and whether a court can adjust an arbitrator's numbers.
George Haffert and Teresa Downey v. Bell Tower Condominium Association, Carol Barnosky, et al., Docket A-3853-23, was argued September 16, 2025 and decided March 11, 2026. It is the sixth appeal in the litigation. Unpublished, and not precedential under R. 1:36-3.1
The fee ruling
The panel affirmed the trial court's post-remand document-production rulings and its award of $55,830 in counsel fees.
The authority is statutory. N.J.S.A. 46:8B-21(a) "creates a specific exception to the American Rule for condominium associations whose governing documents properly authorize fee recovery."
Two conditions are doing work in that sentence. The Condominium Act supplies the exception; the association's own bylaws must actually authorise the recovery. An association whose governing documents are silent does not get there on the statute alone.
The interest ruling
The trial court had raised the post-judgment interest rate in a confirmed arbitration award from 10 percent to 12 percent. The Appellate Division vacated that portion of the order.
The principle: courts have almost no authority to modify a confirmed arbitration award absent fraud or misconduct. A confirmed award's numeric terms are not open for a reviewing court to revisit because it thinks a different figure fits better.
Why the fee holding matters more than the dollar figure
The American Rule in New Jersey is that each side bears its own legal costs. Assessment collection is one of the narrow places where that does not hold, and the reason is structural: an association that cannot recover collection costs is spreading one owner's non-payment across every paying owner twice — once for the unpaid assessment, again for the legal fees.
The decision confirms that the exception is real and that reasonable fees, tested against the Rendine factors, will be affirmed even in protracted litigation. $55,830 in a collection matter is not a small number, and it survived.
The condition a board can check tonight
"Whose governing documents properly authorize fee recovery" is the operative clause, and it is not self-executing. A great many New Jersey bylaws, particularly those drafted before the 1990s, contain either no fee-recovery provision or one narrow enough to be argued about.
That is a document review, not a litigation strategy, and it is cheap. An association that discovers the gap during a collection action discovers it at the worst possible moment.
The arbitration holding, read at the category level
New Jersey community associations use arbitration heavily, partly because PREDFDA requires alternative dispute resolution to be available for housing-related disputes. The trade-off is finality, and this decision is a reminder of how complete that finality is.
An arbitrator set post-judgment interest at 10 percent. The award was confirmed. At that point the number was fixed, and a later court — even one supervising the same long-running case, even one that thought the statutory rate should apply — could not move it.
For a board, the practical implication runs in both directions. Favourable arbitration outcomes are durable. Unfavourable ones are equally durable, including terms that look like administrative details at the time. Interest rates, payment schedules and fee allocations are worth arguing over during the arbitration, because there is no second bite.
Context
This is the sixth appeal in a dispute that has been running since roughly 2010. Neither the fee holding nor the arbitration holding is novel as a statement of law; the value is that both were applied and affirmed in a live 2026 New Jersey association matter, which is what a board's counsel needs when advising on a collection file today.
It also, quietly, makes an argument for resolving disputes early. Sixteen years and six appeals is a cost borne by every owner in the building.
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