New Jersey Court Finds Residual Beneficiary of Homeowner’s Estate is Not Liable for HOA Assessments

UNPUBLISHED New Jersey Appellate Court decision (July 8, 2014).

A homeowners association sought to collect unpaid assessments that accrued after the death of a homeowner against the homeowner’s surviving daughter who was the “residuary beneficiary” and the executrix under the homeowner’s will. At the time of the mother’s death the property was worth less than the balance owed on a reverse mortgage that the mother had put on the property. The estate had limited funds that were used to pay the association’s monthly assessments after the mother’s death until they ran out. The association then sued both the estate and the daughter for the unpaid assessments that were accruing contending that under New Jersey law when a person dies, his or her property devolves to the person to whom it is devised by will. The association thus contended that the daughter became the owner of the mother’s home upon the mother’s death and therefore became responsible for payment of all of the association’s assessments that thereafter came due. The daughter contended that the assessments were owed by the estate.

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