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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. 

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

New Jersey – Manager Licensing Bill

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

Today, January 9th 2014, the New Jersey State Senate passed the “Manager Licensing Bill”.

The bill will now go to the Governor for his signature.

The bill is available for viewing and downloading here.

This bill was first introduced in 2012 and has been working its way through the system.

We will keep you updated on any progress with regard to the actual signing of the bill by the Governor.

 

 

History of the bill:

3/8/2012 Introduced, Referred to Assembly Regulated Professions Committee
6/18/2012 Reported out of Assembly Comm. with Amendments, 2nd Reading
6/25/2012 Passed by the Assembly (51-26-1)
6/28/2012 Received in the Senate, Referred to Senate Commerce Committee
6/13/2013 Reported from Senate Committee with Amendments, 2nd Reading
6/13/2013 Referred to Senate Budget and Appropriations Committee
12/5/2013 Reported from Senate Committee, 2nd Reading
1/9/2014 Substituted for S2578 (1R)
1/9/2014 Passed by the Senate (29-7)
1/9/2014 Received in the Assembly, 2nd Reading on Concurrence

Bill
Manager Licensing Bill

Association’s Need to Collect Assessments to Keep Up the Fight

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

Community Associations fight the spread of COVID-19 where people live. Associations must not be stopped from collecting the assessments they need to keep up the fight. Senate Bill S2330 sponsored by Senators Joseph P. Cryan and Nellie Pou; and Assembly Bill A3908 Sponsored by Assembly Members Mila Jasey, Verlina Reynolds-Jackson and John McKeon had been listed for votes in the Senate and Assembly on April 13, 2020.

To the great relief of Condominiums, Co-Ops, and Homeowners Associations throughout New Jersey, neither the Senate nor the Assembly voted on these bills on May 13, 2020. These bills have however re-surfaced. And, at least for the moment, they do not contain Senator Pou’s proposed Amendment that would remove Association-crippling Section 3. A copy of Senator Pou’s proposed amendment may be viewed by clicking here: Senator Pou’s proposed amendment

The Assembly version, A3908, is scheduled for hearing before the Assembly Commerce and Economic Development Committee on Thursday, May 7, 2020 at 11:00 AM. The Senate version, S2330, is scheduled for hearing before the Senate Budget and Appropriations Committee on Thursday, May 7, 2020 at 1:00 PM. The Senate and Assembly Bills are identical for the time being. A copy of Senate Bill S2330 may be found by clicking here: https://www.njleg.state.nj.us/2020/Bills/S2500/2330_I1.HTM

The Committees would have taken your oral testimony on A3908 and S2330, by telephone and/or video but a deadline for submitting the required SBA Committee Registration Form was set as 3:00 pm on May 5, 2020 so it seems that the late notice will effectively exclude telephonic or video testimony. You may however still submit written testimony via e-mail to OLSAideSBA@njleg.org. Your e-mails will be included in the committee records and distributed to the Committee members. Please reference the bill numbers and Committees you are submitting your comments to in the e-mail Re: line.

Without amendment, the proposed legislation will cripple Association cash flow. It will make it more difficult or impossible for Associations to perform their critical functions. It will make it more difficult or impossible for Associations to pay the individuals and small businesses Associations employ.

Assessment revenue is the lifeblood of every Condominium, Co-Op, and Homeowners Association. To a degree, the crisis has already hobbled collection efforts.

We have advocated forbearance agreements and encouraged flexibility. We continue to do so.

Please e-mail the Assembly Commerce and Economic Development Committee members: Gordon Johnson, Robert Karabinchak, Robert Auth, John Catalano, Nicholas Chiaravalloti, John DiMaio, Aura Dunn, William Moen, Annette Quijano and Verlanda Reynolds-Jackson and the Senate Budget and Appropriations Committee members: Paul Sarlo, Sandra Cunningham, Dawn Addiego, Nilsa Cruz-Perez, Patrick Diegnan, Linda Greenstein, Declan O’Scanlon, Steven Oroho, Teresa Ruiz, Troy Singleton, Michael Testa, and Samuel Thompson and request that these bills not move forward without Senator Pou’s amendment removing Section 3. You may find your legislators by clicking here:  https://www.njleg.state.nj.us/members/legsearch.asp

Thank you.

Notarizing Documents Remotely

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

On April 14, 2020, Governor Murphy signed Assembly Bill 3903 into law. The text of the Bill may be reached by clicking here: https://www.njleg.state.nj.us/2020/Bills/A4000/3903_R1.PDF  The new law provides for notarizing documents remotely during the public health emergency and state of emergency.

Among other things, notaries confirm from personal knowledge or from satisfactory evidence that the person appearing before them is the person whose true signature is on the document. In New Jersey and certain other states, lawyers may also acknowledge documents.

Although it is easy to become a New Jersey notary. Acknowledging documents and performing the other duties of a notary is serious business. In his article Signed, Sealed, Delivered…Disbarred – Notarial Misconduct by Attorneys, available by clicking here: https://repository.jmls.edu/cgi/viewcontent.cgi?article=1644&context=lawreview   Christopher B. Young surveyed improper notary practices by attorneys and the sanctions that followed such activity.  31 J. Marshall L. Rev.1085 (1998). In especially egregious cases attorney discipline has been severe.

Mr. Young’s article, highlights instances where lawyers attempted to defend themselves by claiming that it was common practice for attorneys to have notaries notarize clients’ signatures without the client being present, such arguments were rejected. A quick review of New Jersey Attorney Disciplinary Decisions reveals that the New Jersey Supreme Court has reprimanded at least two New Jersey attorneys for execution of improper acknowledgments.

The above being said, notary duties must be taken seriously and the new law, in sum provides:

During the public health emergency, except with respect to the exceptions in the law, notaries may take acknowledgements remotely via communication technology that allows the individuals to communicate with each other via sight and sound if:

  1. The notary has (a) personal knowledge of the identity of the person appearing, (b) has evidence by oath via a credible witness also appearing before the notary or (c) has obtained satisfactory evidence of the identity of the remote-located individual by using at least two different types of required identity proofing and
  2. The notary is reasonably able to confirm that the document before the notary is the same document on which the remotely located person executed a signature and
  3. The notary creates and maintains for ten years an audio-visual recording of the performance of the actions required.

Further, the acknowledgement shall state that the document was notarized using communication technology. Consult your lawyer for details. This law helps during the crisis, but the process must be followed.

Legislative Bills S2330/A3908 Tabled – For the Moment

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

I hope you and your family had a nice weekend despite the social distancing.  I write to follow up on my April 10th e-mail.  This morning the Senate met virtually and tabled S2330.  You may read the bill by clicking here: https://www.njleg.state.nj.us/2020/Bills/S2500/2330_I1.PDF.   A3908 is currently identical.  My understanding is that, when the Assembly meets this afternoon, it will table A3908.

Thank you to everyone who reached out to their Senators and Assembly Members and voiced concern on these bills.  They could cripple Condo. Co-Op and HOA cash flow.

The fact that these bills are tabled for the moment however does not mean that we should rest.  Versions of these bills will likely resurface shortly.

If you have not done so already, please reach out to your State Senator and Assembly Members and voice your concerns.  Contact information for State Senators and Assembly Members may be found here:  https://www.njleg.state.nj.us/members/legsearch.asp

I have written the following: “Dear Senator and Assembly Members:  Please revisit the above bill and either exempt or make specific provision for collection of Condo, Co-op and HOA assessments.  These Associations are financed on zero-based budgets.  There is no profit built in.  The annual expenses are distributed among the members.  If the assessments are not collected, the Associations will not have the funds to pay their expenses.”

I cited the below as language some associations are using when considering forbearance requests:

•          Arrearage will accrue for May and June 2020’s assessments (the “Accrued Assessments”).

•           Late fees will accrue for May and June 2020’s assessments (the “Accrued Assessment Late Fees”).

•           Membership rights will not be suspended for failure to timely pay May and June 2020’s assessments so long as they are paid as provided for in this agreement.

•           Unit Owner must timely pay all Association obligations arising on July 1, 2020 and thereafter beginning on July 1, 2020 and thereafter.

•           Unit Owner must also pay Accrued Assessments in six equal payments beginning on July 1, 2020 and on the first day of each month thereafter until all Accrued Assessments are paid in full.

•           So long as the Accrued Assessments are timely paid in six equal payments beginning on July 1, 2020 and on the first day of each month thereafter and all Association obligations that arose on July 1, 2020 and thereafter are timely paid in full, the Association will waive Accrued Assessment Late Fees;

•           So long as this agreement is timely complied with, the Association will forebear from collection action with respect to the Accrued Assessments.

•           So long as the Accrued Assessments are timely paid in six equal payments beginning on July 1, 2020 and on the first day of each month thereafter and all Association obligations that arose on July 1, 2020 and thereafter are timely paid, the Association will take no legal action with respect to the Accrued Assessments.

I noted that Associations are addressing forbearance agreements depending on their populations and financial positions.  So, for example, certain Associations are forbearing for May and June while others may be forbearing for longer.

I advised that, although we may or may not represent an Association in their District, the Associations in their district work hard to keep the Associations on sound financial footing.  I suggested that the Legislators contact the President of one of the Associations in their district for feedback.

Again, please reach out to your State Senators and Assembly Members.  Emphasize the great work that you do, emphasize that your Association is showing flexibility via forbearance agreements (if true) and emphasize that, though perhaps well-intentioned, hampering Associations’ ability to collect will do more harm than good.  Thank you.

Associations Need Time to Comment on Proposed Collection Legislation

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

I write to follow up on my April 3, memo suggesting assessment forbearance agreements for certain Association Members. Late in the day yesterday State Senators Joseph P. Cryan and Nellie Pou introduced Senate Bill S2330; State Assembly Members Mila Jasey, Verlina Reynolds-Jackson and John McKeon introduced Assembly Bill A3908. The Senate and Assembly Bills are identical for the time being. A copy of Senate Bill S2330 may be found here: https://www.njleg.state.nj.us/2020/Bills/S2500/2330_I1.PDF

The proposed legislation will impact Association cash flow. It could make it more difficult or impossible for Associations to perform their critical functions. It could make it more difficult or impossible for Associations to pay the individuals and small businesses Associations employ.

There is speculation that these bills may be voted on this Monday, April 13, 2020. The timing of this proposed legislation is a great concern. Among other things, Passover, Good Friday and Easter have justifiably drawn Association Members’ attention to family and spiritual commitments.

Assessment revenue is the lifeblood of every Community Association. There should be adequate time for Association Members and others to consider and comment on this legislation. To a degree, the crisis has already hobbled collection efforts.

We have advocated forbearance agreements and encouraged flexibility. We continue to do so. We ask that you reach out to your State Senators and Assembly Members and request that they not vote on this proposed legislation until Association Members and others have had time to consider and comment on it.

You may find your legislators by clicking here https://www.njleg.state.nj.us/members/legsearch.asp

Thank you.

Governor Murphy’s Stay At Home Order

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

Governor Murphy issued Executive Order Number 107 this afternoon. Governor Murphy described the Order as his “Stay at Home Order”. The original Order is 13 pages long and is available on the Governor’s website. The attached copy has been modified to remove four pages of “Whereas” clauses and insert headings for convenience purposes only. These headings are not a part of Executive Order 107. As you can see from the headings, the Order addresses the following main points.
1.      Remain at home or at your place of residence.
2.      Must practice social distancing.
3.      Do not use public transport if you do not have to.
4.      No in-person gatherings.
5.      Non-essential brick & mortar retailers must close to public.
6.      Essential retail must use social distancing.
7.      Delivery and takeout are permitted.
8.      Recreational and entertainment businesses are closed.
9.      Remote work arrangements are required.
10.  On-site workers: only minimal necessary to ensure essential operations. This paragraph is most important to Associations as it allows for workers who must be physically present to perform their duties for example: certain administrative staff as well as janitorial and custodial staff.
25. Enforcement
Governor Murphy highlighted that many New Jersey residents are fortunate enough to own summer homes at the Jersey Shore. He warned against going there, however. Governor Murphy warned that these seasonal areas lack the healthcare and other infrastructure necessary to adequately handle an influx of summer residents at this time, in this crisis. Governor Murphy’s message, in short, was “Stay Home”.
Governor Murphy’s Executive Order 107 references enforcement statutes N.J.S.A. App. A:9-49 & 50 (attached) which make violation and assisting in a violation a Disorderly Persons offence subject to imprisonment for a term not to exceed 6 months or a fine not to exceed $1,000 or both in the discretion of the court.