Legal Update

IMPORTANT LEGAL UPDATE CONCERNING LITIGATION MATTERS PLEASE READ

June 19, 2013
 
Dear Lake Arrowhead Neighbor:
 
As you may know, a legal challenge to the ability of Lake Arrowhead Club, Inc. (“LAC”) to collect maintenance costs, insurance costs and taxes from the approximately 240 property owners in the LAC community was lodged in March 2011 and remains pending in the Chancery Division, Superior Court of New Jersey.  The group who has made this challenge calls itself “Unfair Share 2010” (hereinafter “UFS”) and is comprised of approximately eighty (80) of your neighbors.

A small minority of your neighbors seek to drastically change the physical and legal landscape of this community, and it will not be for the better if they prevail.  Approximately one out of five of the UFS challengers (20%) have a home on a lake in this community.  When you add the number of UFS members who have lakefront views, it is almost half.  

Yet, these and the other UFS members claim that the reciprocal easements that run through all of our properties are invalid and cannot be used as a legal basis to require them to pay their fair share of the substantial costs needed to preserve and insure our lakes and community properties.  They claim they gain no benefit from being in the lake community.  Some of them have made that claim, and then turned around and marketed their home for sale making the opposite claim in their marketing materials.  Some of those homes that are currently for sale are by UFS members who openly tout the benefits of being a part of LAC.

LAC’s assessment of a mandatory easement fee, starting in 2010, was fully vetted by counsel and is grounded in a series of Appellate Division decisions recognizing this right.  On June 14, 2013, the Honorable Stephen Hansbury, J.S.C. denied cross motions for summary judgment and ordered a trial on the issues, to commence on August 20, 2013. 

LAC is in the final trial preparation stages and will be holding a General Meeting on June 27, 2013 to provide you with a more complete update on this litigation and what it could mean for you and your property rights if LAC is unsuccessful.  While LAC is confident that it will prevail, we cannot take that for granted and must take all measures possible to preserve our property rights, as is LAC’s founding charter since 1927.

The legal challenge by UFS could seriously impair your property rights and have a significant impact on your neighborhood, if successful.  LAC cannot survive without the ability to pass on the substantial maintenance, insurance, taxes and other expenses, to the people in the community who benefit from their proximity to the lakes and ability to use same.    A determination that LAC has no ability force its community members to pay such costs will mean the end of LAC.

If this challenge were successful, LAC would cease to exist; the properties it owns would be sold at a tax auction to the highest bidder; and the lakes would likely need to be drained.  Can you imagine what it will be like to have Lake Arrowhead drained and condominiums built where the lake used to stand?  Can you imagine what it will be like to have the three lakes and Route 46 pond drained and surrounded by chain-linked fences after they are condemned?

Significantly, under a broad reading of applicable statutes, it is entirely possible that all of the homeowners in the community (including all of us and the UFS members) could still face liability to state agencies for the decommissioning of the dams and lakes, if this legal challenge were upheld and LAC ceased to exist.    It is our belief that the legal position taken by UFS is simply reckless and fails to acknowledge the substantial harm that could be delivered to all of our properties, including those of the UFS members.

It is imperative that each of you do what you can to attend the General Meeting so that we can discuss how to organize for the trial.  If you are unable to make it, I encourage you to reach out to me directly by email and discuss with me and questions you may have.  I can be reached at koconnor2012@optonline.net, or by cell at 201-359-7040.

Sincerely,
                                         
Kevin O’Connor
Chair, Easement Committee