What does “transition” really mean when it relates to condominium and community associations? In brief, it encompasses many functions and does not occur overnight. Transition is one of the most critical processes that any association will face. Attention to detail is vital to protect the association. The purpose of this article is to provide a fundamental framework for the transition process and helpful practice pointers every attorney in this field should understand.

Generally, a developer of an association controls the Board of Trustees until 75 percent of the units are sold. See N.J.S.A. 46:8B-12.1a (condominiums); N.J.S.A. 45:22A-47 (all common interest communities). This important shift in control commences the transition process. But it does not end there. As construction is completed and units are sold, performance bonds are released and the developer may begin to wind up operations and move on to its next project.  As such, it may become more difficult to address issues with the community without resorting to litigation. Furthermore, even if litigation is successful, a prevailing association-plaintiff may simply have a judgment against a defunct entity. For these reasons, it is important for an association to be careful, deliberate and detailed during the transition process and its investigation, as this process represents a unit owner-controlled association’s best opportunity to hold the developer and its subcontractors accountable for their work.

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