---
title: Lawsuit forces condo association to tap reserve fund and assess
description: Our NJ condominium association was sued by a former employee for wrongful termination and the association had to pay large legal fees and a payout.
---

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# Lawsuit forces condo association to tap reserve fund and assess

| [Condo & HOA Assessments](https://www.condoassociation.com/blog/topic/condo-hoa-assessments) |   [Condo Reserves](https://www.condoassociation.com/blog/topic/condo-reserves) |   [Board of Directors](https://www.condoassociation.com/blog/topic/board-of-directors) |  

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## What do you think? Question:

Our New Jersey condominium association was sued by a former employee for wrongful termination and the association had to pay large legal fees and a payout. Unfortunately, we did not have the proper insurance at that time. During this three year lawsuit, we paid the attorney fees from our proportioned monthly dues. The final agreement of a $60,000 payout came out of our Reserve Account. Since the Reserve Account had almost been depleted because of this payout, we have a Special Assessment to replenish this account needed for capital improvements. How should this Assessment be collected? As stated in our Master Deed and Bylaws, we pay all our dues, loans, expenses (including the attorney fees for this lawsuit), and previous monies into the Reserve Account by a proportion of the unit's size. Shouldn't this assessed reserve monies continue to be collected this way? It states in the bylaws that the Board has the duty to collect a "proportioned part" of the common expenses. The Board can only determine how and for what this money is spent. The current Board is currently assessing us with a flat fee (all units paying the same, regardless of size)for the Reserve Account. Many of us object especially since all of the 85 of the 88 units are subsidizing the 3 much larger units. The Board refuses to budge. What are our options? Do you agree that the Assessment charges should be by proportion?

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## What do you think? Answers (7)

#### What are your thoughts on this topic?

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