(TRENTON) – An Assembly panel released on Monday legislation sponsored by Assembly Speaker Vincent Prieto (D-Hudson) to strengthen the laws governing common interest communities and ensuring protection of owner’s rights.
“It’s been more than 30 years since the enactment of The Planned Real Estate Development Full Disclosure Act,” which outlines state oversight of how planned developments are marketed to buyers,” said Prieto. “It has also been 10 years since the Assembly Task Force to Study Homeowners’ Associations submitted recommendations calling for changes in laws in order to increase protections for homeowners.”
“This legislation addresses the recommendations made by the task force and would strengthen protections for homeowners’ in common interest communities.”
The bill (A-2260) provisions include, but not limited to, the following:
(1) Revise the manner in which information should be provided to prospective purchasers by developers. The bill would require items which are likely to be of extreme importance to a purchaser, such as obligations, governance structures, potential future liabilities, restrictions, or hidden loans on the part of a developer to the association,, may be buried deep within a document and not disclosed adequately at all;
(2) Requires the Public Offering Statement (POS), and the registration of developments process, to be revised and streamlined. The executive summary of the offering is required to be made in plain language, explaining the rights, liabilities, obligations and governing form applicable to the association;
(3) Addresses the problem that planned communities with fewer than 100 units have been exempted from registration under the act, which has been interpreted by administering agency as exempting developers from providing no protections for purchasers in smaller communities. The bill would remove this exemption by requiring a POS for every prospective purchaser in a planned community;
(4) Allows owners to have earlier exposure to operational issues and input into governance matters, as well as, requires boards to adopt principles of democratic and transparent governance; and
(5) Creates a commission in, but not of, the department of Law and Public Safety, to serve as a state resource center, liaison, and educational resource to owners and their shared ownership community associations, and to coordinate low cost, reliable alternative dispute resolution services to these associations.
“This bill recognizes the governmental nature of homeowners associations and aims to provide the best enforcement of statutory protections for prospective homebuyers,” continued Speaker Prieto. “These comprehensive changes are overdue and important to current and future homeowners in these communities.”
In addition, the bill would transfer the responsibility for the “Planned Real Estate Development Act” to a new bureau within the Division of Consumer Affairs currently has significant experience in administering consumer protection programs.
The bill was released by the Assembly Housing and Community Development Committee.