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DCA Proposes New Association Regulations Including Changes to Fines, Penalties & Elections

By Jennifer L. Alexander, Esq. June 20, 2019 Posted in Community Association Law

On June 3, 2019, the New Jersey Department of Community Affairs (“DCA”) issued several proposed amendments to regulations under the Planned Real Estate Development Full Disclosure Act (“PREDFDA”). The regulations are intended to both carry out the 2017 amendments set forth by the “Radburn Act” and “to enhance resident voting participation rights” in community associations. Of particular importance is that several of these proposed regulations seek to implement obligations on Associations that exceed the obligations set forth under Radburn.   

The proposed requirements, enforcements and penalty provisions should be carefully considered by board members, managers, management companies and professionals.

Some Proposed Changes include:

N.J.A.C. 5:26-8.1(e) which proposes that: “Members of the executive board appointed by the developer shall be liable as fiduciaries to the unit owners for their acts or omissions.”

N.J.A.C. 5:26-8.4(a) which proposes that: “A developer who retains at least one unit as a rental unit shall not be entitled to an automatic seat on the executive board…This shall not be construed to prevent a developer from being a candidate for a position on the executive board.”

N.J.A.C. 5:26-8.4(d) which proposes that: “The bylaws may allow tenants to vote in executive board elections and may allow tenant membership in the association, but to do so, the bylaws shall provide that the tenant can vote or be a member in the association only with the consent of the owner of the unit tenant is leasing.”

N.J.A.C. 5:26-8.4(d)(3) which proposes that: “A voting eligible tenant shall have the same voting rights as the owner of the unit that the tenant leases. Such voting rights shall be in place of, and not in addition to, the rights of the owner of the leased unit.

N.J.A.C. 5:26-8.9(a)(1) which proposes that: “The developer shall not be entitled to cast votes in any executive board elections while the developer maintains a seat or seats on the board pursuant to Section 5 of P.L. 1993, c. 30 (N.J.S.A. 45:22A047).”

N.J.A.C. 5:26-8.9(l) which proposes that: “[E]lection notice[s] would be required to contain a copy of the ballot that must meet the following requirements: ballots must contain the names of all persons nominated as candidates for the executive board in alphabetical order, in the same font, same font size, and same font color, indicate what office and term each candidate is seeking, and include space for write-in candidates.”

N.J.A.C. 5:26-8.9(h) which proposes that: “The association shall verify the eligibility of the voters and count the ballots in a non-fraudulent and verifiable way.”

N.J.A.C. 5:26-8.9(h)(1) which proposes that: “Any depository for physical ballots shall be secured.”

N.J.A.C. 5:26-8.9(k)(2) which proposes that: “All association members may nominate any member for candidacy, including self-nomination. The association shall ensure that all nominees are in good standing. Good standing shall be the sole criterion for the eligibility of a nominee.”

N.J.A.C. 5:26-8.9(k)(3)(i) which proposes that: “Provisions for write-in candidates may be established in the bylaws of the association. In the event a write-in candidate receives sufficient votes to be elected but is not eligible, such candidate shall not be deemed to have been elected…”

N.J.A.C. 5:26-8.12(a)(2) which proposes that: “The board shall provide a brief explanation of the basis for and cost entailed in the matter that is the subject of any binding vote and include the explanation in the minutes for the meeting.”

N.J.A.C. 5:26-8.12(e) which proposes that: “The executive board may exclude attendance of all association members and voting eligible tenants at meetings, or portions of a meeting.”

N.J.A.C. 5:26-8.14(e)(2) which proposes that: “[F]or associations that are controlled by the developer, the Department may issue a revocation of registration.”

The full text of the regulations can be found on the DCA’s website at:

https://www.nj.gov/dca/divisions/codes/codreg/pdf_rule_proposals/PRED_Election_Regs.pdf

The proposed changes are not statutes, but rather suggested rules by the DCA and are subject to a public comment period. All responses should be submitted by August 2, 2019, to:

Geraldine Callahan

Department of Community Affairs

P.O. Box 800

Trenton, New Jersey 08625

Fax No. (609) 984-6696

geraldine.callahan@dca.nj.gov

For a further understanding of these new proposed regulations, please do not hesitate to contact the experienced attorneys at Griffin Alexander, P.C.

 

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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