NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1513-16T1
UNION HILL CONDOMINIUM
ASSOCIATION,
Plaintiff-Appellant,
v.
WELLS FARGO BANK, N.A.,
Defendant-Respondent.
______________________________
Argued October 30, 2017 – Decided November 15, 2017
Before Judges Sabatino and Whipple.
On appeal from Superior Court of New Jersey,
Law Division, Hunterdon County, Docket No. L-
0523-15.
John J. Abromitis argued the cause for
appellant (Lavery, Selvaggi, Abromitis &
Cohen, PC, attorneys; Mr. Abromitis, on the
briefs).
Henry F. Reichner argued the cause for
respondent (Reed Smith LLP, attorneys; Mr.
Reichner, of counsel and on the briefs).
PER CURIAM
Plaintiff Union Hill Condominium Association ("the
Association") appeals the Law Division's November 7, 2016 order
concluding on stipulated facts that defendant Wells Fargo Bank,
N.A. ("Wells Fargo") is not a "lender in possession" or a
"mortgagee in possession" required to pay the Association
maintenance assessments and counsel fees for a vacant condominium
unit as to which Wells Fargo has a pending mortgage foreclosure
action. We affirm.
The record owner of the unit, Michael Demers, was delinquent
on both his mortgage payments due to the lender and his assessments
due to the Association. Wells Fargo brought a foreclosure action
against Demers in August 2012. Demers died in 2013. The
foreclosure case has not yet resulted in a final judgment.1 In
the meantime, Wells Fargo has engaged in certain measures such as
changing locks, "winterizing" the premises, landscaping, and the
remediation of "stink bugs." Wells Fargo also had repairs
performed to a door and a handrail, and ordered certain other
repairs that were not completed.
In a detailed written decision by Judge Thomas C. Miller, the
trial court rejected the Association's contention that these
actions by Wells Fargo were sufficient to make it responsible for
ongoing assessments. The Association now appeals these findings,
1
At oral argument on the appeal, counsel for Wells Fargo advised
us that a guardian ad litem for Demers' heirs may soon be, or has
already been, appointed.
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and also argues the trial court erred in holding that the lien
priority statute, see N.J.S.A. 46:8B-21, is the Association's sole
remedy against Wells Fargo in these circumstances.
Both parties have helpfully submitted supplemental briefs at
this court's request comparing the facts of this case with those
in Woodlands Community Association v. Mitchell, 450 N.J. Super.
310 (App. Div. 2017) (holding on the facts presented in that case,
involving a lender's assignee's "winterization" of property, that
the assignee was not a lender in possession liable for condo fees).
Having considered those submissions, and the parties' oral and
other written arguments, we affirm the trial court's denial of
relief to the Association. We do so substantially for the sound
reasons articulated by Judge Miller as well as in accordance with
this court's June 6, 2017 precedential opinion in Woodlands, which
was issued after this appeal was filed.
As we recognized in Woodlands, a mortgagee or its assignee
that brings a foreclosure action against a condominium unit owner
is not liable for delinquent common charges unless and until it
has engaged in sufficient activities to be considered "in
possession" of the premises. Id. at 315; see also Woodview Condo.
Ass'n, Inc. v. Shanahan, 391 N.J. Super. 170, 173 (App. Div. 2007).
"Whether a mortgagee or its assignee is in [such] possession is
determined on a case-by-case basis." Woodlands, supra, 450 N.J.
3 A-1513-16T1
Super. at 315. For example, if a mortgagee rents the premises to
a third party and collects rent, that exercise of ownership rights
is sufficient to make the mortgagee a lender in possession. Ibid.;
see also Woodview, supra, 391 N.J. Super. at 173-74. By contrast,
actions by a mortgagee that merely protect its security in the
property, such as changing locks, paying realty taxes, and
"winterizing" the property to prevent frozen pipes, is
insufficient to make the mortgagee a lender in possession.
Woodlands, supra, 450 N.J. Super. at 316-19. For these reasons,
we held in Woodlands that the "minimal actions" taken there by the
lender's assignee to protect its security interest in the property
did not rise to a level requiring it to pay maintenance fees to
the condominium association. Id. at 318.
We discern no material difference between the facts in
Woodlands and the facts in this case. We do not regard the
incidental actions taken by Wells Fargo as sufficient to render
it "in possession." Although more extensive repairs or
improvements arguably might have tipped the balance in the
Association's favor, the modest repairs to a door and a railing
essentially comprise measures to keep the premises safe rather
than capital investments. Nor do the landscaping and pest control
measures that were taken alter the mortgagee's status.
4 A-1513-16T1
Although we appreciate the Association's reasonable desire
to obtain a contribution from this long-vacant unit for common
expenses, the facts presented simply do not support a finding that
Wells Fargo is "in possession." That said, we urge Wells Fargo
to take reasonable and prompt steps to pursue the apparently-
uncontested and long-delayed foreclosure action to completion.
Affirmed.
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