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IMPORTANT ALERT From NJ-LAC Regarding Proposed DCA Regulations

Posted on Author By Francis J. McGovern, Jr., Esquire

On June 3, 2019, the New Jersey Department of Community Affairs (“DCA’) published proposed regulations concerning association elections among other matters.

The public may comment on the proposed regulations until August 2, 2019.  The full text of the proposed regulations can be seen here: https://www.nj.gov/dca/divisions/codes/codreg/pdf_rule_proposals/PRED_Election_Regs.pdf

 

Written comments can be submitted by email to geraldine.callahan@dca.nj.gov.

 

Or Mailed to:

Geraldine Callahan

Department of Community Affairs

P.O. Box 800

Trenton, NJ 08625

 

Your LAC has fully analyzed the proposed regulations and has submitted a letter of in response. View the letter submitted by CAI- NJ LAC HERE.

 

While there are numerous areas of serious concern, the NJ LAC draws your attention to these particularly troubling provisions:

  • Fines – Section 5:26-8.14 provides that DCA may fine any person who violates the regulations, even if only a technical violation.  This includes violations by board members and managers!  Fines can range from $50 to $50,000!
  • Public Ballot Tallying – Section 5:26-8.9(h)(2) states that all ballots shall be publicly tallied and open to inspection by any member for a period of 90 days.
  • All Votes Must be Anonymous Including Absentee and Proxy Ballots – While some association bylaws require anonymous balloting, Section 5:26-8.9(h)(3) mandates that all forms of votes be anonymous, which can create serious, practical election issues.
  • Removal of Board Members by Petition – Section 5:26-8.11(d) allows automatic removal of one or more board members upon presentation of a petition signed by 51% of the members.
  • No Binding Board Votes in Executive Session – Section 5:26-8.12(e)(2) mandates that matters that could have previously been voted on in executive session (pending litigation, matters of personal privacy, personnel matters, etc.) must now be voted on in a meeting open to the members.
  • 7-Day Notice of Board Meeting with Agenda of All Items for Discussion and Action – Section 5:26-8.12(c)(3) requires posting of a notice of board meetings seven days in advance (current regulations provide for 48 hour advance posting) and fails to include current regulation’s provision that agendas must be posted only “to the extent known.”
  • Associations with Affordable Housing Units Must Reserve a Board Seat for Affordable Owners – Section 5:26-8.10(a)(2) provides that when the bylaws do not set aside a board seat for affordable owners, the Association must amend its bylaws to provide for an affordable-owner reserved seat.

 

While these are not all of the troubling proposed regulations, they are some of the more important ones.  Write to the DCA to voice your objections.

PLEASE TAKE A FEW MINUTES AND SEND AN EMAIL TO THE DEPARTMENT OF COMMUNITY AFFAIRS EXPRESSING YOUR CONCERN WITH THE PROPOSED REGULATIONS. 

Objections to the Proposed DCA Regulations

Posted on Author By Francis J. McGovern, Jr., Esquire

On July 18, 2019 the New Jersey CAI Legislative Action Committee (“LAC”) submitted its comments to the Department of Community Affairs with respect to the proposed regulations.

The full submission is in the following link:

https://www.cainj.org/wp-content/uploads/2019/07/Ltr-from-CAI-LAC-NJ-to-DCA-re-proposed-regulations-7.16.19.pdf

Please submit your objections to the proposed regulations by August 2, 2019 to:

Geraldine Callahan

Department of Community Affairs

P.O. Box 800

Trenton, NJ 08625

e-mail: Geraldine.callahan@dca.nj.gov

(fax) (609)984-6696   

 

Thank you to the CAI-NJ’s Legislative Action Committee for its hard work. The LAC Committee members are:

George Greatrex

A. Christopher Florio

Joseph Chorba

Michael Pesce

Lisa Rayca

Elizabeth Comando

Barbara Drummond

Matthew Earle

Vincent Hager

Sue Howe

Steve Kroll

Christine Li

James Magrid

Thomas Martin

Glen Masullo

Jack McGrath

Paul Raetsh

J. David Ramsey

Caroline Record

 

Please contact me with any questions. Fran

DCA Proposes New Association Regulations

Posted on Author By Francis J. McGovern, Jr., Esquire

DCA Proposes New Association Regulations Including Fines & Penalties

On June 3, 2019 the New Jersey Department of Community Affairs published proposed new association regulations. A copy of the DCA’s summary and the full text of the proposed amendments and new rules can be found here:

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

The proposed requirements are granular, and the proposed enforcement and penalty provisions should be carefully considered by board members, managers, management companies and professionals.

If you desire to submit an opinion, your opinions on the proposed amendments and new rules must be submitted in writing by August 2, 2019 to:

Geraldine Callahan

Department of Community Affairs

P.O. Box 800, Trenton, NJ 08625

e-mail: Geraldine.callahan@dca.nj.gov

(fax) (609)984-6696

Some proposed sections of note include:

N.J.A.C. 5:26-8.9(h)3 which proposes that: “All ballots shall be cast in an anonymous manner.”

N.J.A.C. 5:26-8.9(h)4 which proposes that: “If the bylaws permit, and the association member consents, a ballot may be cast electronically if it is administered by a neutral third party and anonymity is maintained.”

N.J.A.C. 5:26-8.10(a)2 which proposes that: “When affordable units represent a minority of units in the development, the bylaws shall reserve a seat or seats on the executive board for election by owners of affordable units.”

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)2. which proposes that: “A vote taken at a closed meeting shall not be binding. If the matter requires a binding vote, it shall be taken at a subsequent open meeting in a manner that does not disclose any confidences.”

N.J.A.C. 5:26-8.14(e) which proposes that: “The Department may levy and collect fines and may issue penalties as set forth in N.J.A.C. 5:26-11. 1. For associations that are controlled by unit owners, the Department may issue cease and desist orders, may issue a monetary penalty, may transmit the case to the Office of Administrative Law, or may file and action in the Superior Court.”

Please contact me with any questions.

Francis J. McGovern, Jr., Esquire

DCA Regulations Positive or Punitive?

Posted on Author By Francis J. McGovern, Jr., Esquire

On June 3, 2019, the New Department of Community Affairs (the “DCA”) proposed regulations that would significantly impact Association governance. Many of you raised concerns with respect to the proposed regulations.
On Monday, May 18, 2020, with few modifications, the proposed regulations became effective. The DCA issued a 112-page document outlining the public comments and the DCA’s responses. That document is available by clicking here: PREDFA Regulations May 18, 2020 The DCA declined requests for hearings on the public comments.
The good news is that, decades before the proposed regulations, most Associations, Board Members and Managers worked hard to provide transparency, member participation and good governance. Theoretically, not much should change for them.
The bad news is that, because of the relatively few bad-apple Associations, all Associations, Board Members and Managers are now saddled with micro-regulation backed by the threat of fines and penalties.
It is hard to know where this will lead. Increased transparency, member participation and good governance? I hope so. Increased administrative expenses? Yes. Increased D & O claims? Most likely. Decreased volunteer participation? I hope not. “Wag the dog” politics? Sadly, probably.
Let’s be positive and hope that the DCA will, as it historically has done, use a constructive approach rather than a punitive approach to assisting Associations and their members. A lightly marked up copy of the original proposed regulations may be seen by clicking here: Mark-up Copy