Location:
CONDOMINIUMS; TAXES - PROPERTY;

OLR Research Report


February 27, 2009

 

2009-R-0138

COMPENSATING CONDOMINIUM OWNERS FOR MUNICIPAL SERVICES

 

By: John Rappa, Principal Analyst

You asked if other states' laws allow municipalities to compensate condominium owners for trash pick up, snow plowing, or other municipal services they pay for through property taxes but do not receive.

Your question relates to the fact that condominium owners pay property taxes often without receiving all the municipal services other property owners receive. A municipality could compensate them for the services they do not receive by cutting their taxes or reimbursing them for services procured from private vendors.

Maryland appears to be the only state with a statute explicitly allowing municipalities to assist condominium associations, an online search of legal databases found. Maryland law allows municipalities to contract with these associations to provide residential street service or reimburse them for the cost a municipality would incur if it provided the service (MD Code 1957, Art 23A, 50, Attachment 1).

Alternatively, states could require municipalities to provide services to condominiums. New Jersey is the only state that does this. Its 1989 Municipal Services Act requires municipalities to provide specified services to condominiums and cooperatives or reimburse them for the cost (NJSA 40:67-23.2, Attachment 2). The services include removing snow, lighting streets, and collecting leaves and recyclable materials. Attachment 3 discusses the cases construing the act (New Jersey Law Journal, “New Jersey's Municipal Services Act Becomes an Adult,” June 23, 2008).

New Jersey's law appears to be the model for a bill the Rhode Island legislature is currently considering. H 5537 requires municipalities to collect garbage and recyclable materials from condominium as they do single family homes or reimburse them for the cost of obtaining this service (Attachment 4).

Although Maryland appears to be the only state with a law allowing compensation, municipalities may not need such an enabling law. Our research found examples of municipalities in Connecticut and other states that compensated condominiums for services they paid for but did not receive. Attachment 5 is a 2001 OLR report the practice in Connecticut (2001-R-0528).

JR:ak