Bill Text: NJ A1367 | 2024-2025 | Regular Session | Introduced
Bill Title: Revises time period at which unit owners assume control of homeowners' associations.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly Housing Committee [A1367 Detail]
Download: New_Jersey-2024-A1367-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblyman JULIO MARENCO
District 33 (Hudson)
SYNOPSIS
Revises time period at which unit owners assume control of homeowners' associations.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the control of homeowners' associations and amending P.L.1979, c.157 and P.L.1993, c.30.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.1979, c.157 (C.46:8B-12.1) is amended to
read as follows:
2. a. When unit owners other than the developer own 25% or more of the units in a condominium that will be operated ultimately by an association, the unit owners other than the developer shall be entitled to elect not less than 25% of the members of the governing board or other form of administration of the association. Unit owners other than the developer shall be entitled to elect not less than 40% of the members of the governing board or other form of administration upon the conveyance of 50% of the units in a condominium. Unit owners other than the developer shall be entitled to elect all of the members of the governing board or other form of administration upon the conveyance of 75% of the units [in a condominium] within a single condominium structure, or two years after the substantial completion of a single condominium structure, whichever occurs first. However, when some of the units of a condominium have been conveyed to purchasers and none of the others are being constructed or offered for sale by the developer in the ordinary course of business, the unit owners other than the developer shall be entitled to elect all of the members of the governing board or other form of administration.
Notwithstanding any of the provisions of subsection a of this section, the developer shall be entitled to elect at least one member of the governing board or other form of administration of an association as long as the developer holds for sale in the ordinary course of business one or more units in a condominium operated by the association.
b. Within 30 days after the unit owners other than the developer are entitled to elect a member or members of the governing board or other form of administration of an association, the association shall call, and give not less than 20 days' nor more than 30 days' notice of, a meeting of the unit owners to elect the members of the governing board or other form of administration. The meeting may be called and the notice given by any unit owner if the association fails to do so.
c. If a developer holds one or more units for sale in the ordinary course of business, none of the following actions may be taken without approval in writing by the developer:
(1) Assessment of the developer as a unit owner for capital improvements.
(2) Any action by the association that would be detrimental to the sales of units by the developer. However, an increase in assessments for common expenses without discrimination against the developer shall not be deemed to be detrimental to the sales of units.
d. Prior to, or not more than 60 days after, the time that unit owners other than the developer elect a majority of the members of the governing board or other form of administration of an association, the developer shall relinquish control of the association, and the unit owners shall accept control. Simultaneously, the developer shall deliver to the association all property of the unit owners and of the association held or controlled by the developer, including, but not limited to, the following items, if applicable, as to each condominium operated by the association:
(1) A photocopy of the master deed and all amendments thereto, certified by affidavit of the developer, or an officer or agent of the developer, as being a complete copy of the actual master deed.
(2) A certified copy of the association's articles of incorporation, or if not incorporated, then copies of the documents creating the association.
(3) A copy of the bylaws.
(4) The minute books, including all minutes, and other books and records of the association, if any.
(5) Any house rules and regulations which have been promulgated.
(6) Resignations of officers and members of the governing board or other form of administration who are required to resign because the developer is required to relinquish control of the association.
(7) An accounting for all association funds, including capital accounts and contributions.
(8) Association funds or control thereof.
(9) All tangible personal property that is property of the association, represented by the developer to be part of the common elements or ostensibly part of the common elements, and an inventory of that property.
(10) A copy of the plans and specifications utilized in the construction or remodeling of improvements and the supplying of equipment to the condominium and in the construction and installation of all mechanical components serving the improvements and the site, with a certificate in affidavit form of the developer, his agent, or an architect or engineer authorized to practice in this State that such plans and specifications represent, to the best of their knowledge and belief, the actual plans and specifications utilized in the construction and improvement of the condominium property and for the construction and installation of the mechanical components serving the improvements. If the condominium property has been declared a condominium more than 3 years after the completion of construction or remodeling of the improvements, the requirements of this paragraph shall not apply.
(11) Insurance policies.
(12) Copies of any certificates of occupancy which may have been issued for the condominium property.
(13) Any other permits issued by governmental bodies applicable to the condominium property in force or issued within 1 year prior to the date the unit owners other than the developer take control of the association.
(14) All written warranties of the contractor, subcontractors, suppliers, and manufacturers, if any, that are still effective.
(15) A roster of unit owners and their addresses and telephone numbers, if known, as shown on the developer's records.
(16) Leases of the common elements and other leases to which the association is a party.
(17) Employment contracts, management contracts, maintenance contracts, contracts for the supply of equipment or materials, and service contracts in which the association is one of the contracting parties and maintenance contracts and service contracts in which the association or the unit owners have an obligation or responsibility, directly or indirectly to pay some or all of the fee or charge of the person or persons performing the service.
(18) All other contracts to which the association is a party.
(cf: P.L.1979, c.157, s.2)
2. Section 5 of P.L.1993, c.30 (C.45:22A-47) is amended to read as follows:
5. a. Irrespective of the time set for developer control of the association provided in the master deed, declaration of covenants and restrictions, or other instruments of creation, control of the association shall be surrendered to the owners in the following manner:
(1) Sixty days after conveyance of 25 percent of the lots, parcels, units or interests, not fewer than 25 percent of the members of the executive board shall be elected by the owners.
(2) Sixty days after conveyance of 50 percent of the lots, parcels, units or interests, not fewer than 40 percent of the members of the executive board shall be elected by the owners.
(3) Sixty days after conveyance of 75 percent of the lots, parcels, units or interests within a single structure, or two years after substantial completion of a single condominium structure, whichever occurs first, the developer's control of the executive board shall terminate, at which time the owners shall elect the entire executive board; except that the developer may retain the selection of one executive board member so long as there are any units remaining unsold in the regular course of business.
b. The percentages specified in subsection a. of this section shall be calculated upon the basis of the whole number of units entitled to membership in the association. The bylaws of the association shall specify the number or proportion of votes of all units conveyed to owners that shall be required for the election of board members. Unless the bylaws provide otherwise, each unit conveyed to an owner shall be entitled to one vote. A developer may surrender control of the executive board of the association before the time specified in subsection a. of this section, if the owners agree by a majority vote to assume control.
c. Upon assumption by the owners of control of the executive board of the association, the developer shall forthwith deliver to the association all items and documents pertinent to the association, such as, but not limited to, a copy of the master deed, declaration of covenants and restrictions, documents of creation of the association, bylaws, minute book including all minutes, any rules and regulations, association funds and an accounting therefor, all personal property, insurance policies, government permits, a membership roster and all contracts and agreements relative to the association.
d. The association when controlled by the owners shall not take any action that would be detrimental to the sale of units by the developer, and shall continue the same level of maintenance, operation and services as immediately prior to their assumption of control, until the last unit is sold.
e. From the time of conveyance of 75 percent of the lots, parcels, units, or interests, until the last lot, parcel, unit, or interest in the development is conveyed in the ordinary course of business, the master deed, bylaws or declaration of covenants and restrictions shall not require that more than 75 percent of the votes entitled to be cast thereon be cast in the affirmative for a change in the bylaws or regulations of the association.
f. The developer shall not be permitted to cast any votes allocated to unsold lots, parcels, units, or interests, in order to amend the master deed, bylaws, or any other document, for the purpose of changing the permitted use of a lot, parcel, unit, or interest, or for the purpose of reducing the common elements or facilities.
(cf: P.L.1993, c.30, s.5)
3. This act shall take effect immediately.
STATEMENT
This bill would revise the statutes governing the control of a homeowners association by the developer of a condominium, or other planned unit development, to limit the amount of time that a developer may control a homeowners'' association. Under current law, once 75% of the units in a condominium or planned unit development are sold by the developer, the homeowners' association is governed by unit owners, and not the developer. However, in many cases, a developer will cease construction of additional units of housing in order to maintain control of the homeowners' association. The provisions of this bill are intended to address this issue.
The bill would amend section 2 of P.L.1979, c.157 (C.46:8B-12.1), which supplements the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.), to clarify that the control by the owners shall occur 60 days after the conveyance of 75 percent of the lots, parcels, units or interests within a single structure, or two years after substantial completion of a single condominium structure, whichever occurs first.
The bill would also amend the "Planned Real Estate Development Full Disclosure Act," P.L.1993, c.30 (C.45:22A-43 et seq.), to clarify that the control by the owners shall occur 60 days after the conveyance of 75 percent of the lots, parcels, units, or interests within a single structure, or two years after substantial completion of a single condominium structure, whichever occurs first.
