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Green Bill to Clarify Law Concerning Homeowners Associations in Planned Real Estate Developments Gains Assembly OK

Legislation sponsored by Assemblyman Jerry Green, chair of the Assembly Housing and Community Development Committee, to modify regulations regarding planned real estate developments and homeowners associations recently received approval from the General Assembly.

Green cited recent court decisions as the motive for sponsoring the legislation this session and indicated a need for clarification and adjustment to the laws in this area.

“Access to meetings, records and information on ownership is the right of every homeowner in these communities,” said Green (D-Middlesex/Somerset/Union). “This bill would help to ensure homeowners remain clear on their investment and have a seat at the table when decisions are made for their communities.”

The legislation (A-469) would make several modifications to the laws which regulate planned real estate developments and the homeowners associations formed to manage the commonly-owned property in such communities. The bill would prohibit the mere titling of common property in the name of the association from being construed as diminishing the ownership interests of unit owners in the common or shared elements and facilities of a planned community.

In addition, the measure would require that common property ownership interest be equal proportionately to the obligation of each unit owner to pay for the maintenance of the common property, and that the sum of the common property interests in the community is not to exceed 100 percent.

The bill also would require membership in the homeowners association to be inherent for a purchaser of a home in such a planned community. Under the bill’s provisions, standards are set for homeowners associations concerning access to records and elections of members to the governing board of an association. The legislation also eliminates closed-meeting working sessions of an association’s governing board to reflect the similar law currently applicable to public governing bodies and provides for a recall procedure which would authorize the removal of elected governing board members.

The bill would direct the Commissioner of Community Affairs, which provides oversight to the associations, to distribute guidelines on the election procedures and to promulgate, within 60 days, any rules or regulations that may be necessary to effectuate the provisions.

The bill, which was approved 71-4-2 on Thursday, awaits Senate consideration.