06/05/2020

Client Alert

Written by: Ronald L. Perl, Esq.

Effective as of May 18, 2020, the New Jersey Department of Community Affairs has issued formal regulations governing elections held in community associations. The regulations were made effective as of the date they were made public, so associations have had very little time to adapt to them. These guidelines are intended to provide a quick reference to the highlights of the regulations.

Ballots and Voting

• Voting must be anonymous so if you are not using electronic voting, names and signatures shall not be required on ballots, whether in-person, absentee or by proxy.
• Sample ballots must be provided with the election notice, even if you include an absentee ballot or proxy ballot.
• “Public” tallying of ballots is required. This may be accomplished at the annual meeting itself, or in some other method by which the members have an opportunity to view the counting.
• For associations of 50 units or more the opportunity for write-in votes is mandatory, whether or not authorized by your bylaws. There must be a space for one write-in vote for each available seat.
• Ballots must be available for inspection by the members for a period of 90 days from the election date.
• Candidates must be listed in alphabetical order and no candidate may be identified as an incumbent.
• Proxies must state that they are voluntary on the part of the granting owner.
• Electronic voting must be administered by a “neutral third party” and anonymity must be maintained.

Good Standing

• Notice must now be given to association members who are not in good standing.
  • In associations with fewer than 50 units, the notification must be sent at least 14 days before the election, state the reason why the member is not in good standing and inform them of the right to ADR in regard to the good standing issue.
  • In associations with 50 or more units, the notice must be at least 30 days before the election and contain the same information as above.
  • Members are entitled to rectify their standing up to 5 business days prior to the election.
  • Note: The ADR need not be conducted prior to the election, but a member who requests ADR is considered in good standing until the ADR occurs.

Affordable Units

• When an association:
  • (1) contains affordable units; and
  • (2) the number of affordable units is fewer than 50% of the total number of units, the bylaws must reserve a seat or seats on the board for a member residing in an affordable unit.

• The regulations do not say:
  • whether existing bylaws must be amended or whether this applies to new bylaws; or
  • what happens if there are no willing candidates from affordable units; or
  • what happens when the affordable housing restrictions expire

Board Representation (other than affordable)

• In mixed-use developments, the owners of commercial units may not constitute a majority of the board.
• No more than one resident from a single unit may serve on the board at a given time.
• Neither a person, nor an entity, may hold more than one seat on the board.

Removal of a Board Member

• Board members may be removed:
  • In accordance with the bylaws; OR
  • By the Board for good cause directly impacting the member’s ability to serve.
    • Board may not remove a member for disagreement with the majority or for violating a confidentiality agreement without affording the member ADR; AND
    • ADR provider must conclude that there was a breach that adversely affected the interests of the association as opposed to that of the board.
• Board member may also be removed by a vote of the members at a meeting held for that purpose (which can be initiated by a petition signed by 51% of the members).

If you have questions about this or any other issues with your community association, please contact one of our community association attorneys.

©2020 Hill Wallack LLP. All rights reserved. Please contact Hill Wallack for permission to reprint. Notice: The purpose of this Client Alert is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, accuracy and completeness of which cannot be assured. This Client Alert should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.