Twp. Developer Promises Responsibility for Maintenance

The developer of a seven-house proposal in Chatham Township would be responsible for maintenance of the entire property until more than half of the houses are built.

Ronald Gunn, owner of Fenix-Chatham LLC, plans to develop a grouping of houses around Ormont Road, Longview Avenue, Mountainside Drive and River Road, a proposal that has been under the . Gunn was made available for questions during the board’s Aug. 1 meeting.

Planning board and township committee member Bailey Brower was concerned about the residents would have to sign into if they buy a new house.

Brower was particularly wary of where the responsibility for maintenance would lie if Fenix-Chatham, for some reason, were not able to finish the project, citing that the township has had two to three developments over the years that have had multiple changeovers because the developers have gone bust.

Gunn explained that, through the contract, there is a developer’s agreement that requires his company to post a bond to ensure all infrastructure work is done and well-maintained.

Township engineer John Ruschke explained that while the bond lasts for a maximum of two years, the value of the bond is “120 percent of the improvements.”

“Under our divisional land use law, we can hold up to 30 percent of the total bond amount until the project is completely done,” Ruschke said. “If there is a bust prior to the maintenance period happening, there will be money available for completing the development.”

However, Ruschke said, the township doesn’t take on the maintenance bond until the project is complete.

“But if Mr. Gunn goes belly up and only three houses are built, where’s the money coming from?” Brower said. “This is a high-maintenance facility, and the bond is only good for two years.”

Gunn’s attorney Steven Schaffer said there aren’t many facilities that have to be maintained and that the amount of money for maintenance is not a lot.

Gunn said the money amounts to $12,000 in total, with $6,000 for the maintenance of the retention basins, $4,000 for maintaining the private roadways and $2,000 to fund snowplowing.

In addition, Gunn said that, as the developer, he customarily maintains full responsibility for homeowner associations he establishes until more than half of the development is built.

“Everything that the homeowner association will ultimately be responsible for, [Fenix-Chatham] will probably be responsible for until four [of the seven] houses are built,” Gunn said.

Gunn said he had a similar plan in place when he built the Stonegate development of condominiums in Watchung, waiting until 21 of the 41 units were sold for the owners to begin taking full responsibility.

The proposed Chatham Township development would cover seven subdivisions – lots 2, 6 and 8 in block 32 and lots 1, 14, 17 and 20 in block 33–and equates to approximately 6.3 acres.

The application will next be discussed in front of the planning board at its Sept. 12 meeting. The planned discussion topics–though subject to change–are slated to be a geotechnical analysis of the land and a possible report on the width of the roads from the fire marshal.