New Jersey court: an HOA cannot claim a unit it paid expenses on for 32 years
New Jersey court: an HOA cannot claim a unit it paid expenses on for 32 years
2026-09-15 · New Jersey · Courts
A New Jersey condominium association that paid the common charges and taxes on its superintendent's unit from 1983 until it bought the unit in 2016 sued to establish that it had owned the unit all along. It lost.
Wedgewood Gardens Condominium Association, Inc. v. Wedgewood Gardens Developers, Inc., Zygmunt Wilf, and Leonard A. Wilf, Docket A-0699-23, was argued November 19, 2024 and decided February 5, 2025. Unpublished, not precedential under R. 1:36-3.1
The facts
Wedgewood Gardens is a 136-unit condominium in Verona. The sponsor-developer leased Unit 74 — the superintendent's, or "building-personnel," unit — to the association, and sold it to the association in 2016. Throughout that period, from 1983 onward, the association paid the unit's common charges and property taxes.
In 2022 the association sued, arguing that the master deed's building-personnel clause meant the unit had always been a common element it already owned, and that it should never have had to buy what was already its own.
The holding
Affirmed for the developer on every count: no transfer of title, no Consumer Fraud Act violation, no breach of fiduciary duty, no reformation of the master deed.
The panel's reading of the instrument was straightforward — "[t]he sponsor… owned any of the [u]nits… until each [u]nit is sold… pursuant to paragraph 8(f) of the master deed."
The rule this establishes for the category
A master deed clause designating a unit for a particular use does not, by itself, convey that unit. Designation and title are different things, and in New Jersey the recorded instrument controls which is which.
The association's theory required reading a use designation as a present transfer, and a court applying ordinary principles of construction will not get there when the same instrument says the sponsor owns unsold units.
Why paying for it for 32 years did not help
This is the part that strikes most people as unfair, and it is worth being precise about why the law comes out this way.
Paying an expense associated with property does not create title to it. A tenant who pays a landlord's taxes under a lease does not thereby become the owner. The association's payments were consistent with its leasehold, and consistency with the lease is what makes them ambiguous rather than probative.
Adverse possession does not fill the gap either, in the ordinary case, because possession under a lease is permissive — and permissive possession is the opposite of the hostile possession the doctrine requires.
The Consumer Fraud Act and fiduciary-duty counts
Both were rejected. That matters independently, because association claims against sponsors in New Jersey are routinely pleaded with a Consumer Fraud Act count attached for the treble-damages exposure.
The decision is a reminder that the CFA count travels with the underlying theory. Where there was no misrepresentation — the master deed said what it said, and the association read it for decades without objection — there is no unconscionable commercial practice to build on.
The transition lesson, which is the real one
This dispute is a transition problem that surfaced thirty-nine years late. The question of who owns the superintendent's unit was answerable in 1983 by reading paragraph 8(f), and answerable at every transition milestone thereafter.
New Jersey associations taking control from a developer inherit a set of questions of exactly this kind: which units and spaces are common elements, which are limited common elements, which the sponsor retained, and what the association's lease obligations are. Those questions get harder with every year that passes, because the evidence disperses and the people who negotiated the arrangement leave.
A transition review that catalogues every unit and space against the master deed, and records the answers, is cheap relative to a 2022 lawsuit over a 1983 clause. Two pending bills in the Legislature — A2995 and A2999 — would tighten developer transition obligations, including a full accounting of the developer-control period. Neither has been heard.
One note on scope
The panel affirmed on the master deed before it. A differently drafted building-personnel clause — one that expressly designates the unit a common element, or that conveys it on transition — would present a different case, and nothing here suggests otherwise.
Related New Jersey HOA Topics
Stay on top of New Jersey HOA law
Every week: new New Jersey legislation, court rulings, and regulatory developments affecting condos, planned communities, and property managers. Free.
No spam. Unsubscribe anytime.