CAI-NJ APPEALS NEW DCA REGULATIONS
On May 18, 2020, Regulations to the Planned Real Estate Development Full Disclosure Act (PREFDA) were adopted and published by the New Jersey Department of Community Affairs (DCA), without giving community associations an opportunity to prepare to implement them.
By way of background, the Radburn Law became law in July 2017. It contained requirements with respect to, among other things, community association elections, by-law amendments, and membership voting. In July 2019, The New Jersey Department of Community Affairs (DCA) proposed regulations, clarifying and furthering the intent of the Radburn Law. As required by law, a period for comment was provided. Extensive comments were submitted by the Community Associations Institute (CAI) but few of the comments CAI submitted were addressed. The new regulations were approved and published by the DCA, effective on May 18, 2020. According to the Regulations, they were to become effective immediately. The inability to prepare to implement these new requirements has caused a good degree of chaos, especially as to elections already in progress.
CAI’s Legislative Action Committee (LAC) prepared a proposal to challenge the new regulations, which CAI’s Board of Directors has unanimously approved. CAI-NJ Chapter will be the Appellant in the appeal, which has just been filed in the New Jersey Superior Court, Appellate Division.
LAC has stated that it will first seek a “stay” of the effective date of the regulations. The DCA regulations were published and put into effect on May 18, 2020. The stay would suspend the effective date of the regulations. As there is no guarantee if and when the stay will be granted, the DCA regulations stay in effect until such time, and all community associations must comply with the same.
Some significant changes that will need to be addressed for Association elections include public ballot tallying, having a 90-day inspection period for ballots, write-in candidate spaces on the ballot, requiring anonymous voting, and providing a notice of good standing to members 30 days prior to the election. Other changes include changes to the notice of board meetings, board representation by affordable unit owners, and fines for noncompliance. The regulations are extensive and require associations to make several changes to their regular course of business, especially when it comes to running an election. If the stay is granted, Community Associations will be afforded more time to figure out the best way to implement these procedures before the next election, and will provide CAI with more time with which to contest some of the unpleasant features of the Regulations.
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
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