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Green & Eustace Bill to Clarify Law Concerning Homeowners Associations in Planned Real Estate Development Clears Assembly Panel

(TRENTON) – Legislation sponsored by Assemblymen Jerry Green and Tim Eustace to modify regulations regarding planned real estate developments and homeowners associations was approved Monday by the Assembly Housing and Economic Development Committee.

The sponsors 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.

“A neighborhood is stronger when neighbors care and are involved. These homeowners have a vested interest in these communities,” said Green (D-Middlesex/Somerset/Union), who chairs the committee. “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.”

“It shouldn’t take litigation for homeowners in these communities to know where they stand,” said Eustace (D-Bergen/Passaic). “Making these adjustments to our current laws ensures there is no confusion about what these homeowners are entitled to, and that the governing bodies that oversee these communities do not inadvertently deny these homeowners their rights.”

The bill (A-2027) 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.
The bill would also 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.

The bill would provide standards for homeowners’ associations concerning access to records and elections of members to the governing boards of associations. The bill would also eliminate closed-meeting working sessions of an association’s governing board to reflect the similar law currently applicable to public governing bodies. The bill would also provide a recall procedure which would authorize the removal of elected governing board members.

Lastly, 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 was approved by the Assembly Housing and Community Development Committee.

The Assembly panel also released legislation (A-2009) sponsored by Assemblyman Green that would permit master deeds of condominium to reflect proportional common and limited common elements interests of each owner as fractions.

Both bills will now go to the Assembly Speaker for further consideration.