Bipartisan Legislation Limits Municipalities Ability to Protect Associations

Senate Bill 3233/Assembly Bill A1425 from the 2016-2017 Legislative Session was signed into law by Governor Christie on January 16, 2018.

Unfortunately, per the Assembly Judiciary Committee Statement, and with very limited exception, “a municipality will only be able to require developers to post performance guarantees that cover improvements being dedicated to a public entity”.  One has to wonder where this legislation came from.  Presumably not the League of Municipalities as municipalities are in the best position to help associations and their members during build-out.  Especially with respect to typically-bonded items like grading and drainage, roadways, sidewalks and storm sewers.

Perhaps the builders?  But won’t the lack of bonding just lead to more litigation by Associations directly?  In the past, often (but not always) defects in these items were corrected as part of the bond reduction/release process.  Suffice it to say, going forward, Associations and their members will have one less protection and will face greater challenges in making sure they get what they paid for.