By Paul Goldfinger, Editor@Blogfinger. Jack Bredin, Blogfinger researcher.
Look south on BF to find our October 24, 2020 post about two condominium associations which sued the CMA. (2/17/17) And don’t miss the comments.
Today’s BF re-post below about ground rents is also from 2017. The subject of ground-rents goes back to the 19th century and is still a source of interest and consternation.
You will also find two letters to the editor–same 2017 vintage on this subject.
The law suit described above is about two OG condominium associations who are suing the Camp Meeting Association regarding ground rents. But we haven’t seen the complaint and we don’t know what the complaint really is and what issues will be considered and explored during the discovery phase if it goes to trial.
Because of all the uncertainty, we have a wide open pathway for discussion, and won’t it be interesting to guess how many different spinoffs will be generated.
Fundamental assumptions will be questioned. Let’s begin with a collection of questions and ideas. Then send in your suggestions about where this suit will lead. Click on comments below or send an email to Blogfinger@verizon.net. If you ask to be anonymous, you will be. If you don’t share your email with us, we can’t talk to you individually.
1. Recently the OGHOA hired a lawyer to look into the ground rent matter. We don’t exactly know what his instructions were, but he cost the HOA $7,000. HOA members: where is your loyalty? You should demand that the identity of that lawyer be revealed and his report made public. (See Kevin Chambers’ inquiry about this.)
https://blogfinger.net/2017/01/30/just-wondering-what-happened-to-the-legal-opinion-on-ground-rents/
2. Will the court find that condo owners should be treated the same as other resident owners and be charged $10.50 per year ground rent? Will the court find that condo owners can be treated on a case to case basis, whereas home owners in town are mostly treated as if they were all the same? Will using home assessments to determine fees be OK for condo owners, but not for regular homeowners?
3. Who really owns the land in Ocean Grove? If the CMA owns the land, then how come we homeowners have to pay property taxes to Neptune Township? Why doesn’t the CMA pay the taxes? (This was questioned in court in the past, and the citizens lost that battle.) If the CMA doesn’t own the land, then will the current homeowners own the land? Will the CMA produce proof that they own the land?
4. If the CMA loses and has to return a ton of money, will it go bankrupt?
5. If the CMA loses, then they may not be able to make much money from condo’s in the future. If that happens, will they still support the construction of up to 165 condos at the North End? Will the North End Redevelopment Plan collapse before it begins?
6. If the CMA cannot make much money from the approval of more condos in the Grove, will they become supporters of single family zoning in town and opponents to more condos?
7. Will the CMA be able to continue raising the leasehold fees whenever it wants to, without providing justification?
8. The CMA is a secretive private organization. Will it have to open its books to the court? Will its officers and trustees have to undergo depositions?
9. Will the condo associations involved in the suit be able to continue paying high legal fees if this suit drags on? Can the CMA afford a long legal process?
10. Will other condominium associations join the suit?
Tell us your ideas. Please read the rules above about commenting on Blogfinger.
MERLE HAGGARD WITH THE PRESERVATION HALL JAZZ BAND:
Editor’s note: On Feb 22, 2017, Blogfinger posted two Letters to the Editor containing discussions of the history of ground rents in Ocean Grove. Here are links:
Does anyone on the CMA understand this land lease issue as it applies to land ownership? If so, why don’t they explain it in a public meeting or on Blogfinger.
Editor’s Note:
Noreen: The Ocean Grove Home Groaners Association (aka Home Owner’s Ass.) has proclaimed itself to be the local experts on this subject. Since the CMA almost never explains anything publicly, you would do well to send an email to them at their website. (OGHOA.org)
Also look up to see the top of our home page (Blogfinger.net) and find the search box. Write in words such as “ground rent” and you will find some specific information on this subject. —-Paul
Hmm, I was about to reply to you that (duh) “Seven percentum of 75 dollars” is $10.50 — but thought I should consult my trusty calculator instead of my rusty brain. And, lo and behold, 7% of $75 is $5.25, not $10.50. So now I am also very confused about why I pay $10.50. Nevertheless, I have my bank set to autopay the $10.50 on Dec. 31 just to be sure I don’t miss a payment.
I’m a strong supporter of the CMA and want to ensure they can continue to operate. But you are right, Paul, to raise these issues.
Dr. Carol. I don’t see $10.50 written into your document. My guess is that the CMA, wishing to promote good will and honor the original Stokes’ promise of “in perpetuity,” has not raised that sum for those whose original leases go back to the 19th century.
We went to Freehold to check the deed books for Ocean Grove:
In 1873 our lot was sold to Maggie A. Bodine of NYC for $325.00. Rev Stokes was present and signed the “lease agreement.” I guess the sale price was to purchase the 99 year (in perpetuity”) lease agreement and not to purchase the land itself.
So that is why I still pay $10.50. But, if someone’s home was built later, as in the case of Joe D. whose home was built around 1980, then that owner will have a higher ground rent, and one which is subject to changes over time.
So am I right? Is there anyone out there who actually knows about this issue?
Dr.Carol, If you want to know who owns your lot, look in the Tax Book. If your name is there, then you own the lot. If it says O.G.C.M.A. then they own the lot. It’s as simple as that.
Dr. Carol. Thank you for your condensed Reader’s Digest version.
By the way, your concern about violations, particularly not paying the fee on time, even if only $10.50, could provide an excuse to raise the fee, so our advice has been to pay those fees on time (they are due Jan. 1 each year.)—mark your calendars.—Paul
Here’s my simplified version, Paul: The Camp Meeting granted a lease to Mr. Pearce to use the lot for a residence in exchange for $10.50 per year for 99 years, provided Mr. Pearce abided by the covenants included (no mercantile business, no boarding house use, no use except May 15-Oct 30). If he kept these covenants, the lease would pass intact to anyone who inherited the lease from him or to whom he sold the lease (his “heirs and assigns”, and when the lease passed to another person it would restart the 99-year clock.
In my non-lawyerly opinion, we all have violated these clauses, so no one is immune from a restructuring of the lease terms. I don’t want to make any assumptions about the reasoning of the CMA, but it appears they have decided to hit the “mercantiles” (stores and maybe condos might be construed to be a mercantile) and boarding houses first — low hanging fruit, clearly in violation.
Dr. Carol. I defy anyone to actually read and understand this “party of the first part”document which I did not read in its entirety, but I want to point out that the document (“indenture”) seems to include indications of a quick shuffle.
You will notice that the word “deed” is mentioned with a date of August 4, 1870; Then comes your document which refers to a “lease”, but that is dated August 10, 1871.
I’m guessing that Stokes sold the lots in 1870, which is the year Bradley “bought” his lot from Stokes. Bradley’s own writings say that Stokes “sold” the lot to him.
The quote below is from a history of the region and is about the purchase of the first lot in OG. Note the use of the word “sold”
“ON AN AFTERNOON IN MAY 1870, New York brush manufacturer James A. Bradley was walking down Broadway, when he ran into David H. Brown, treasurer of the Ocean Grove Association. “How is Ocean Grove getting along?” Bradley asked his friend. “Very fairly,” said Brown. “Why don’t you buy a lot? Those who have their names put down now have first choice.” Bradley liked the idea. Hard work as partner in the profitable Smith and Bradley Brush Company had taken its toll on his health; a little sea air, he thought, would be just what he needed. First choice of lots? “Well put me down for two.”
“The founding of Ocean Grove had taken place the year before, and layout of the village was still in its early stages. On his first visit, Bradley was taken with the sylvan tranquillity of the locale; and since he was a strict Methodist (having been converted to this faith by his wife), he admired the moral principles on which the Grove was established. He bought the first lot sold, at a cost of $85.”
So maybe, in 1871, Stokes decided to pressure all buyers to return the lots so that the CMA could take over as owners and leasers.
But I defer to any lawyer with patience who can untangle this for us.–Paul @ Blogfinger
We do not own the land; we own a leasehold. For what it’s worth, I transcribed the handwritten leasehold for my property a few years ago. Some of the words were not legible, but here is the content as I was able to read it. My take is that the rent of $10.50 is renewable as long as I follow the covenants; however, the covenants include promises to not run a Mercantile or boarding house (which was violated decades ago by previous owners) and an agreement not to use the house except from May 15 – October 30 (which we all violate). I’ve always worried that our violation of these clauses subjects the leasehold to renegotiation. Here’s the full content:
The Ocean Grove Camp Meeting Association to Thomas C. Pearce:
This Indenture made the tenth day of August in the year of our Lord one thousand eight hundred and Seventy One Between the Ocean Grove Camp Meeting Association of the Methodist Episcopal Church of the first part and Thomas C. Pearce of the Borough of Hightstown in the County of Mercer and State of New Jersey of the Second Part witnesseth that the said Party of the first part for and in consideration of the sum of Seventy Five Dollars of lawful money of the United States of America to them in hand well and truly give by the said Party of the Second Part at and before the sealing and delivery of these presents the receipt whereof is hereby acknowledged and the yearly assessment or sent and covenants herein after mentioned and reserved to be kept paid and performed here — Lease and Let and hereby to demise Lease and let unto the said Thos. C. Pearce his Successors Administrators and Assigns all that certain That Piece or Parcel of ground know and designated as Lot the four hundred and ten on the map of Lots on Camp Ground of the said The Ocean Grove Camp Meeting Association of the Methodist Episcopal Church being a party of the same premises situated in Ocean Township in the County of Monmouth and State of New Jersey acquired by them. The __ Party of the First Part by virtue of the authority given by their Charter for the Tranposes of said Corporation by Conveyance to them made by William B. Osborn and wife and David H. C. Brown and wife by deed dated August 4th, 1870 and recorded in Book 227 of Deeds for said Monmouth County page 57-60. To have and to hold the said Lot or Parcel of Ground and all and singular the premises hereby demise With the appurtenances unto the said Thomas C. Pearce Executors Administrators and Assigns to them and their own proper use benefit and behoof but for the purposes hereinafter designated and render and subject to the rules and regulations which may from time to time be adopted as to manner of building upon and care of the lot and the buildings and improvements which may be erected thereon for and during the full end term of Ninety Nine Years from this day fully to be complete and ended renewable to the said Thomas C. Pearce his heirs and assigns for a like term of years forever. Paying therefore to the said Party of the First Part or their successors or assigns to and for a yearly rent for said premises not to exceed Seven per centum of said sum of Seventy Five Dollars at such time or times in each year of said term as the same may be required by said Party of the First Part their Successors or Assigns. Subject however, nevertheless and this Lease is granted and accepted according to the Regulations which may from time to time be adopted and formulated on the government of the said Camp Ground and which are freely made part of this entitlement as fully to all intents and purposes as if they were incorporated herein and the said Party of the Second Part for his Heirs Executors and Administrators as covenant promise and agree with said Party of the First Part their Successors and Assigns well and truly to pay to them the said assessment as herein aforesaid within thirty days after notice of the same and in case the Said Party of the Second Part shall persistently neglect or refuse to Pay the same or to observe the hereinafter contained covenants or said Regulations or any or either of them or any or either Herein contained it shall be lawful for said Party of the First Part their Successors or assigns to enter into and upon said demised premises and hold the same as of their former estate or estates and this Lease shall thereupon and from thenceforth be wholly at an end and the estate hereby granted shall cease and terminate. And Also that the said Party of the Second part shall not and will not at any time hereafter without the written consent of the said Party of the First Part their successors or assigns use or occupy said premises or any part or any building or other structure thereon or suffer or permit the same or any part thereof to be used or occupied as a Boarding House or any Mercantile or mechanical trade or purpose or in any other way or for any purpose whatsoever except as a temporary residence and seaside resort for and during the term commencing the fifteenth day of May and ending with the thirteenth day of October of each year. And Also that the said Party of the Second Part shall not nor will [not] at any time during the said lease year give demise let assign set over or in any manner dispose of the hereby demised premises or any part thereof for all or any part of the term hereby granted to any person or persons whatever without the consent and approbation in writing of the Party of the first part their successors and Assigns first Todd ? and obtained for that purpose. In Witness whereof the said Party of the First Part have hereunder set its common and corporate seal and caused their presents to be signed by its President and the said Party of the Second Part has hereunto set his hand the day and year above first written.
Signed sealed and delivered in the presence of Wm. S. Yard
E. H. Stokes, President
Attest W.H. Boole, Sec’y
Thomas C. Pearce