NEW JERSEY LEGISLATURE PASSES LAW PROHIBITING DISCRIMINATORY DEED LANGUAGE, AND REQUIRING THE REVIEW OF COMMUNITY ASSOCIATION GOVERNING DOCUMENTS
On June 30, 2021, New Jersey’s Legislature passed S. 2861/A. 5390 (2021), which was signed into law by Governor Murphy on November 8, 2021. It has since been approved as P.L.2021, c.274, and will be codified as N.J.S.A. § 46:15-15 to 18. which requires that any deed filed after January 1, 2022, must not contain any language that violates Sections 4 or 11 of New Jersey’s Law Against Discrimination (“LAD”). Community Associations will have to review their current Governing Documents to ensure compliance and will have to amend them if necessary.
Language that would violate these sections of LAD include any restrictions on the basis of:
- national origin,
- marital status,
- affectional or sexual orientation,
- familial status,
- liability for service in the Armed Forces of the United States,
- gender identity or expression, or
- source of lawful income used for rental or mortgage payments.
The Legislature enacted this law as part of the effort to ensure that the discriminatory and hurtful language contained in land transactions are removed and no longer used in New Jersey State land deeds. The purpose of this law is to ensure that potential landowners are not discouraged from buying a home or upset by the discriminatory language that was previously recorded in their deed. Although these forms of restrictive covenants were already unenforceable, this law goes a step further to ensure that they do not appear in any future deeds.
The law prevents the continued usage of these restrictions by requiring county clerks to refuse to accept any deed that contains such language. In addition, any attorney or title company preparing a deed for recordation must ensure that any restrictive covenants are not referenced in the deed prior to submission. Any deed that is recorded on or after January 1, 2022, that mistakenly contains language in violation of the Law Against Discrimination will still constitute a valid transfer of real property. However, homeowners that want to remove a discriminatory restrictive covenant from their deeds, can do so by filing a “Certificate of Release of Certain Prohibited Covenants” at no expense.
Importantly, this law requires the same discriminatory language be removed from the governing documents of Community Associations. Within ninety (90) days of the enactment of this law (so, by February 6, 2022), all Community Associations are required by this law to review their governing documents to determine whether they contain any prohibited restrictive covenants. If the governing documents contain such discriminatory language, the association can remove that language without going to its members for approval. In other words, the normal amendment procedure requiring quorum and certain percentage of votes to change the governing documents is not necessary to remove restrictive covenants that violate LAD.
Additionally, any member may make a written request to remove such language from the documents. If this request is made, the Board must undertake a document review within thirty (30) days of the request and amend the documents within thirty (30) days of that determination. With that said, this bill does not give a private cause of action against any association or its board for removing or failing to remove any unlawful restriction in the governing documents.
While this law fails to mention age-restricted communities, it is presumed that such communities will not have to remove restrictive covenants that discriminate on the basis of age from their governing documents. Age-restricted communities are expressly authorized by federal law and New Jersey law. So, providing the age-restrictive language in the governing documents of senior communities otherwise complies with LAD, there age-restricted communities will not need to remove that language from their governing documents.
If you need assistance reviewing your governing documents for language that may violate this law, or require assistance amending those documents, we, at Griffin Alexander, P.C., can help. Our attorneys are experienced in all aspects of Community Association law and can help ensure that your Association remains in compliance with the advent of this new law.
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 on particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
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