Provides standards for election and recall of officers for associations of planned real estate developments and restricts certain expenditures.

A1138

ASSEMBLY, No. 1138

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman JOE DANIELSEN

District 17 (Middlesex and Somerset)

SYNOPSIS

���� Provides standards for election and recall of
officers for associations of planned real estate developments and restricts
certain expenditures.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning associations of planned real estate
developments, amending and supplementing
P.L.1977, c.419, and amending
P.L.1993, c.30 and P.L.2017, c.106
.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 3 of P.L.1977,
c.419 (C.45:22A-23) is amended to read as follows:

���� 3.��� As used in this act
unless the context clearly indicates otherwise:

���� a.���� "Disposition"
means any sales, contract, lease, assignment, or other transaction concerning a
planned real estate development.�

���� b.��� "Developer" or
"subdivider" means any person who disposes or offers to dispose of
any lot, parcel, unit, or interest in a planned real estate development.�

���� c.���� "Offer" means
any inducement, solicitation, advertisement, or attempt to encourage a person
to acquire a unit, parcel, lot, or interest in a planned real estate
development.�

���� d.��� "Purchaser" or
"owner" means any person or persons who acquires a legal or equitable
interest in a unit, lot, or parcel in a planned real estate development, and
shall be deemed to include a prospective purchaser or owner.� However, as used
in P.L.1993, c.30 (C.45:22A-43 et seq.), "owner" means any person
owning a unit, or an "owner" or holder of a "proprietary
lease," as those terms are defined under subsections i. and k. of section
3 of "The Cooperative Recording Act of New Jersey," P.L.1987, c.381
(C.46:8D-3), if the development is a cooperative.�

���� e.���� "State" means
the State of New Jersey.�

���� f.���� "Commissioner"
means the Commissioner of Community Affairs.�

���� g.��� "Person" shall
be defined as in R.S.1:1-2.�

���� h.��� "Planned real
estate development" or "development" means any real property
situated within the State, whether contiguous or not, which consists of or will
consist of, separately owned areas, irrespective of form, be it lots, parcels, units,
or interest, and which are offered or disposed of pursuant to a common
promotional plan, and providing for common or shared elements or interests in
real property.� This definition shall not apply to any form of timesharing.

���� This definition shall
specifically include, but shall not be limited to, property subject to the
"Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.), any form of
homeowners' association, any housing cooperative or to any community trust or other
trust device.

���� This definition shall be
construed liberally to effectuate the purposes of this act.

���� i.���� "Common
promotional plan" means any offer for the disposition of lots, parcels,
units or interests of real property by a single person or group of persons
acting in concert, where such lots, parcels, units or interests are contiguous,
or are known, designated or advertised as a common entity or by a common name.

���� j.���� "Advertising"
means and includes the publication or causing to be published of any
information offering for disposition or for the purpose of causing or inducing
any other person to purchase an interest in a planned real estate development,
including the land sales contract to be used and any photographs or drawings or
artist's representations of physical conditions or facilities on the property
existing or to exist by means of any:

���� (1)�� Newspaper or periodical;

���� (2)�� Radio or television
broadcast;

���� (3)�� Written or printed or
photographic matter;

���� (4)�� Billboards or signs;

���� (5)�� Display of model houses
or units;

���� (6)�� Material used in
connection with the disposition or offer of the development by radio,
television, telephone or any other electronic means; or

���� (7)�� Material used by
developers or their agents to induce prospective purchasers to visit the
development, particularly vacation certificates which require the holders of
such certificates to attend or submit to a sales presentation by a developer or
his agents.

���� "Advertising" does
not mean and shall not be deemed to include: Stockholder communications such as
annual reports and interim financial reports, proxy materials, registration
statements, securities prospectuses, applications for listing securities on
stock exchanges, and the like; all communications addressed to and relating to
the account of any person who has previously executed a contract for the
purchase of the subdivider's lands except when directed to the sale of
additional lands.

���� k.��� "Non-binding
reservation agreement" means an agreement between the developer and a
purchaser and which may be canceled without penalty by either party upon
written notice at any time prior to the formation of a contract for the
disposition of any lot, parcel, unit or interest in a planned real estate
development.

���� l.���� "Blanket
encumbrance" means a trust deed, mortgage, judgment, or any other lien or
encumbrance, including an option or contract to sell or a trust agreement,
affecting a development or affecting more than one lot, unit, parcel, or
interest therein, but does not include any lien or other encumbrance arising as
the result of the imposition of any tax assessment by any public authority.

���� m.�� "Conversion"
means any change with respect to a real estate development or subdivision,
apartment complex or other entity concerned with the ownership, use or
management of real property which would make such entity a planned real estate
development.

���� n.��� "Association"
means an association for the management of common elements and facilities,
organized pursuant to section 1 of P.L.1993, c.30 (C.45:22A-43).

���� o.��� "Executive
board" means the executive board of an association, as provided for in
section 3 of P.L.1993, c.30 (C.45:22A- 45).

���� p.��� "Unit" means
any lot, parcel, unit or interest in a planned real estate development that is,
or is intended to be, a separately owned area thereof.

���� q.��� "Association
member" means the owner of a unit within a planned real estate
development, or a unit's tenant to the extent that the governing documents of
the planned real estate development permit tenant membership in the
association, and the developer to the extent that the development contains
unsold lots, parcels, units, or interests pursuant to subsection c. of section
1 of P.L.1993, c.30 (C.45:22A-43).� This definition shall not be construed to
provide the developer a different transition obligation than that required
pursuant to section 5 of P.L.1993, c.30 (C.45:22A-47), or to require that the
developer is allowed to vote in executive board elections.

���� r.���� "Good
standing" means the status - solely with respect to eligibility to (1)
vote in executive board elections, (2) vote to amend the bylaws, and (3)
nominate or run for any membership position on the executive board - applicable
to an association member who is current on the payment of common expenses, late
fees, interest on unpaid assessments, legal fees, or other charges lawfully
assessed, and which association member has not failed to satisfy a judgment for
common expenses, late fees, interest on unpaid assessments, legal fees, or
other charges lawfully assessed.� An association member is in good standing if
he is in full compliance with a settlement agreement with respect to the
payments of assessments, legal fees or other charges lawfully assessed, or the
association member has a pending, unresolved dispute concerning charges
assessed which dispute has been initiated: through a valid alternative to
litigation pursuant to subsection c. of section 2 of P.L.1993, c.30
(C.45:22A-44); through subsection (k) of section 14 of the "Condominium
Act," P.L.1969, c.257 (C.46:8B-14); or through a pertinent court action.

���� s.���� "Voting-eligible
tenant" means a tenant of a unit within a planned real estate development
in which:

���� (1)�� the governing documents
of the development permit the tenant's participation in executive board
elections, and

���� (2)�� either (a) the
development has allowed tenant participation in executive board elections as a
standard practice prior to the effective date of P.L.2017, c.106 (C.45:22A-45.1
et al.), or (b) the owner has affirmatively acknowledged the right of the
tenant to vote through a provision of a written lease agreement or separate
document.�

���� This definition shall not be
construed to affect voting as an agent of the owner through a proxy or power of
attorney.� Pursuant to subsection d. of this section, if the development is a
cooperative corporation, then, an "owner" or holder of a "proprietary
lease," as those terms are defined under subsections i. and k. of section
3 of "The Cooperative Recording Act of New Jersey," P.L.1987, c.381
(C.46:8D-3), is also an "owner," not a tenant, for the purposes of P.L.1993,
c.30 (C.45:22A-43 et seq.).

����
t.���� "Election committee"
means an election committee of association members established pursuant to
paragraph (1) of subsection b. of section 6 of P.L.2017, c.106 (C.45:22A-45.2).

����
u.��� "Non-directed
proxy ballot" means a proxy ballot that provides the proxy holder general
discretion to decide how the vote is cast on the proxy owner�s behalf.

����
v.��� "Qualifying expenditure"
means all association expenses that exceed $100,000 or any maintenance fee
increase in excess of the Consumer Price Index.

(cf: P.L.2017, c.106, s.2)

���� 2.��� Section 3 of P.L.1993,
c.30 (C.45:22A-45) is amended to read as follows:

���� 3.� a.� The form of
administration of an association organized pursuant to section 1 of P.L.1993,
c.30 (C.45:22A-43) shall
:

����
(1)
�� provide for the
election of an executive board, elected by the association members, and
voting-eligible tenants where applicable, and responsible to the members of the
association pursuant to section 4 of P.L.1993, c.30 (C.45:22A-46), through
which the powers of the association shall be exercised and its functions
performed
; and

����
(2)�� be described in the
governing documents, specifying the powers, duties, manner of selection and
removal, and compensation, if any, of the officers, directors, or trustees of
the executive board
.
�

���� b.��� Subject to the master
deed, declaration of covenants and restrictions, bylaws or other instruments of
creation, subsection d. of this section, and the laws of the State, the
executive board may act in all instances on behalf of the association.�

���� c.���� The members of the
executive board appointed by the developer shall be liable as fiduciaries to
the owners for their acts or omissions.�

���� d.��� During control of the
executive board by the developer, copies of the annual audit of association
funds shall be available for inspection by owners or their authorized
representative at the project site.�

(cf: P.L.2017, c.106, s.5)

���� 3.� Section 6 of P.L.2017,
c.106 (C.45:22A-45.2) is amended to read as follows:

���� 6.� a.� An association shall
hold executive board elections in accordance with the provisions of its
governing documents, including validly
[
-
]
adopted
executive board rules
[
,
]
that do not
conflict with the provisions of this section.�
[
If such documents do not set a
specific time or interval, the elections
]
�

Unless otherwise provided in the governing documents, the executive board
shall consist of five members, but notwithstanding the governing documents, if
the number of housing units in the community is less than 11, the executive
board shall consist of no more than three members.� The executive board shall
elect from among its members a president, secretary, treasurer, and, in the
case of communities with more than 10 units, a vice president, who shall
perform the duties of those offices customarily performed by similar officers
of nonprofit corporations.� As permitted by the governing documents, the
executive board may appoint and designate other officers and assign them such
duties as it deems appropriate.� Elections
shall be held at two-year
intervals
and shall be conducted with strict adherence to democratic
principles and fairness
.� If an association has not held an election in
compliance with its governing documents in two or more years, it shall hold an
election within 90 days of the submission to any current executive board member
of a petition signed by
at least
25
[
or
more
]

percent of association members in good standing, but in no event less than the
number of association members required to meet the quorum requirements set
forth in the governing documents.� If an association has no executive board
members and association members fail to act on petition or by majority, any
association member or group thereof, at common expense and, upon written notice
to all owners, may petition a court of competent jurisdiction for authority to
act temporarily in the interests of the association and to organize and hold an
election within 90 days of the date of the court order.� Any proxies used by an
association must contain a prominent notice that use of the proxy is voluntary on
the part of the granting owner, that it can be revoked at any time before the
proxy holder casts a vote, and that absentee ballots are available.� An
association may not use proxies for an executive board member election without
also making absentee ballots available.�

���� b.��� An association
[
of a
development with fewer than 50 units
]

shall
[
ensure
]
:

����
(1)� Conduct elections
under the administration of an election committee of association members, none
of the members of which shall be current executive board members or candidates
for the executive board.� The election committee shall consist of at least
three association members, who shall be selected by lot of eligible association
members at least 120 days prior to an election, provided that any association
member may decline to serve on the election committee after selection and allow
for the selection by lot of another association member.� The election committee
shall function independently of the executive board, and may contract for the
services of a qualified, independent individual or an organization that is
qualified in election monitoring services.� The election committee shall be
responsible for determining the eligibility of association members to vote or
to be candidates for membership on the executive board, for counting ballots,
and for verifying election results; and

����
(2)� Ensure
an
executive board election system that includes:
[
(1)
]

(a)
the provision of
election notice,
[
(2)
]

(b)

the provision of the ability to nominate and vote for any association member in
good standing,
[
(3)
]

(c)

the provision of an opportunity to review any candidacy qualifications such
that the owner is permitted to be a candidate for election to the board,
[
(4)
]

(d)

the provision of ready access to information on when and how to vote, and
[
(5)
]

(e)

the counting of ballots and verification of eligibility to vote, all of which
shall be conducted in a non-fraudulent manner.�
[
Such association shall also be
subject to the requirements of paragraphs (9) and (10) of subsection c. of this
section.
]

���� c.���� In order to ensure open
and fair executive board elections, the following provisions of this subsection
shall apply to all associations
[
of
developments with 50 or more units, except for paragraphs (9) and (10), which
shall apply to associations of all developments
]
.�

���� (1)�� An association shall not
provide for a term of an executive board member to be for more than
[
4
]

two
years,
provided that nothing shall prevent an executive board member from continuing
to serve until his or her successor is duly qualified and elected.�

���� (2)�� An association shall not
prohibit a voting-eligible tenant, where applicable, from casting a vote
allocated to a unit if the bylaws otherwise permit tenant participation in an
election of executive board members nor prohibit an individual acting pursuant
to a valid power of attorney or proxy from casting a vote.�

���� (3)�� An association shall
provide
the first of two
written
[
notice
]

notices
pursuant to paragraph (5) of this subsection,
to all association members no
later than
[
30
]

60

days prior to the
[
date
for the mailing of the notice of the meeting set forth in paragraph (5) of this
subsection that informs
]

election, informing
association members of the right to nominate
themselves or other association members in good standing for candidacy to serve
on the executive board.�

���� (4)�� An association,
in
accordance with this subsection and paragraph (1) of subsection b. of this
section, and
subject to the exceptions under subsection f. of this section,
shall not prohibit an association member in good standing from nominating
himself or herself, or any other association member in good standing as a
candidate for any membership position on the executive board, so long as the
nomination is made prior to the mailing of ballots or proxies to the
association members, which mailing shall occur no earlier than: (a) the day
following the expiration of the time period within which candidates must be
nominated, or (b) where no expiration date is set forth for nomination of
candidates, then the business day prior to the mailing of the
second
notice
of the election, required pursuant to paragraph (5) of this subsection.� The
period for submitting nominations shall not be less than
[
14
]

30

days from the mailing of the request for nominations
pursuant to paragraph
(5) of this subsection
.�

���� (5)�� An association shall
provide association members
with two
written
[
notice
]

notices
of an election by
personal delivery, mail, or electronic means
[
,
no less than 14 nor more than 60
]

:

����
(a)�� An association shall
provide all association members with the first notice at least 60 days prior to
the election, which shall include the election rules, to inform association
members and allow all eligible persons who might be interested in filing as
candidates or nominating an association member in good standing a reasonable
opportunity to do so.
�

����
(b)�� An association shall
provide all association members with the second notice no more than 30 nor less
than 14
days prior to the meeting at which an election of executive board
members is scheduled.� This
second
notice shall include a proxy ballot
and an absentee ballot, unless prohibited by the bylaws, which ballots shall
list in alphabetical order by last name the names of all candidates nominated
pursuant to paragraph (4) of this subsection.� In the case of mailing, the
notice shall be effective when deposited in the mailbox with proper postage.�
The notice may only be sent by electronic means if either (a) the affected
association member, or voting-eligible tenant where applicable, has agreed in
writing to accept notice by electronic means; or (b) the governing documents
permit electronic notices, provided another form of voting by absentee
balloting or proxy voting is available.�

���� (6)�� An association shall use
ballots, whether paper ballots or electronic ballots, that contain the names of
all persons nominated as a candidate for the executive board.�

���� (7)�� An association shall not
prohibit any association member in good standing, or voting-eligible tenant
where applicable, subject to the exceptions under subsection f. of this section
and any limitation on the number of votes per unit permitted under paragraph
(9) of this subsection, from voting for any nominated candidate in an executive
board election.�

���� (8)��
An association member
shall be allowed to cast a ballot anonymously for the election of executive
board members.
� An association shall
[
not
prevent voting for an executive board member by electronic means
]

allow all
eligible association members, or voting-eligible tenants where applicable, to
cast a ballot by mail, in person, or,
where the executive board determines
to employ voting in such manner and an association member, or voting-eligible
tenant where applicable, consents to casting a vote in such manner
, by
electronic means.� A mailed ballot or an electronic ballot shall be deemed to
be a proxy for purposes of determining a quorum for the meeting at which the
election is conducted.� A non-directed proxy ballot shall not be counted in an
election if the number of executive board positions to be filled at the
election exceeds the number of candidates seeking to fill executive board
positions
.
�

���� (9)�� An association shall not
provide for an allocation of votes other than one vote for each unit, or such
larger number of equal votes per unit as may be set forth in the governing
documents of the association, except (a) where the bylaws or other governing
document provide for the voting interest to be proportional to a unit's value
or size, (b) where the governing documents permit more than one vote to be cast
by each unit on an equal basis or a basis consistent with each unit's value or
size, or (c) where the governing documents do not set forth the number of votes
that may be cast by each unit, then in accordance with a rule adopted by the
executive board that allows more than one vote to be cast by each unit,
provided such rule assigns an equal number of votes to each unit.�

���� (10) Election procedures shall
not be established or administered in any way to prohibit participation by the
residents of low
-
or moderate
-
income housing units.�

����
(11)� All nominated candidates
shall be allowed to observe the entire process of counting and tabulation of
the ballots, either in person or through a designated representative, and shall
have access to lists of association members who are eligible to vote and, after
the voting has started, to any list of association members who have voted that
the association may maintain.�

���� d.��� Initial executive board
elections in condominium associations, governed under the "Condominium
Act," P.L.1969, c.257 (C.46:8B-1 et seq.), shall follow the notice
timeline under subsection b. of section 2 of P.L.1979, c.157 (C.46:8B-12.1),
and shall not be subject to this section.��

���� e.���� Whether or not formed
as a nonprofit corporation, associations
[
of
developments of 50 or more units
]

shall conform to the requirements of the "New Jersey Nonprofit Corporation
Act," P.L.1983, c.127 (N.J.S.15A:1-1 et seq.) regarding the counting of
ballots.�

���� f.���� (1) It shall be
permissible for the bylaws of the association to provide:

���� (a)�� for the association
members, and voting-eligible tenants where applicable, of a planned real estate
development with units of different use types to nominate and vote for some
members of the executive board and, pursuant to the mixed-use development's governing
documents, have other members of the executive board nominated and elected by
association members and voting-eligible tenants of units of a different use
type;�

���� (b)�� for the association
members, and voting-eligible tenants where applicable, of a planned real estate
development to nominate and vote only for some members of the executive board
based upon a distribution that allocates votes with approximate proportionality
to the number, value, or size of units located in certain geographical areas
within the development;

���� (c)�� for a limitation on the
number of executive board members nominated and elected by only certain
association members, and voting-eligible tenants where applicable, if that
limit is based upon a classification intended to further the election of one or
more executive board members by the association members, and voting-eligible
tenants where applicable, of affordable housing units that represent a minority
of the units in a planned real estate development;�

���� (d)�� for the association
members, and voting-eligible tenants where applicable, of a planned real estate
development to nominate and vote for some members of the executive board and,
pursuant to the governing documents, have other members of the executive board
nominated and elected by the association members, and voting-eligible tenants
where applicable, of one or more separate developments, so long as each
development's voting weight is approximately proportional, based on the number,
value, or size of the units; and

���� (e)�� that, except for
executive board members serving as representatives of the developer during the
period prior to surrender of control to the owners pursuant to section 5 of
P.L.1993, c.30 (C.45:22A-47), not more than one owner, entity-owner
representative, or voting-eligible tenant where applicable, from a single unit
may serve on the governing board simultaneously;

���� (2)�� The executive board of
an umbrella or master association that does not directly contain units need not
be elected by individuals who are association members, and voting-eligible
tenants where applicable, with units within the geographical area of the umbrella
or master association, provided the members of the executive board serve as
executive board members of another planned real estate development executive
board, and have been nominated and elected by the association members, and
voting-eligible tenants where applicable, with units in that planned real
estate development, in compliance with this section.�

���� (3)�� Except with regard to
[
a planned real
estate development containing fewer than 50 units, and
]
any
appointment by the developer permitted pursuant to section 5 of P.L.1993, c.30
(C.45:22A-47), an association shall:

���� (a)�� not allow a person to
take an executive board position through appointment, provided that nothing
herein shall prevent the executive board members of an association from filling
a vacancy in the executive board created by resignation, death, failure to maintain
any reasonable qualification, including maintaining good standing, to be an
executive board member or by removal following a vote in favor of removal open
to all association members in accordance with the terms of the bylaws
and
subsection j. of this section
; and�

���� (b)�� ensure that, in order to
serve on the executive board, a person shall be elected through a process that
does not conflict with the provisions of this section.�

����
g.� A challenge to the
validity of election results, unless based upon allegations of vote tampering
or fraud directly concerning the election committee or its members, shall be
submitted to the election committee no less than 30 days following the date on
which written notice of the results of the election is given to members of the
association.� Pending the outcome of any such challenge, the persons declared elected
by the election committee shall serve as de facto officers or trustees, as the
case may be.�

����
h.� Ballots, envelopes,
registration records, eligibility lists, proofs of mailing, and other voting
materials shall be subject to inspection by all association members at the time
of the election and shall be kept in the custody of a certified public
accountant or the election committee for not less than 30 days following the
election, or until such time as any challenge to the election brought within
that 30-day period has been resolved and the documents are no longer required.�
Voting materials and procedures shall at all times be subject to inspection and
review by the election committee.� The parties to any election dispute shall be
allowed the opportunity to be present or to be represented at any such
inspection and review.�

����
i.� The election committee
shall have the sole authority to report all substantiated allegations of vote
tampering or fraud by the association�s management, legal team, candidates, or
the election committee to the agency, unless the allegations concern the
election committee or its members directly, in which case any aggrieved
association member may report to the agency only those allegations that concern
the election committee or its members directly.� The agency shall have the
authority to investigate all reported, substantiated allegations of vote
tampering or fraud.� If the agency determines that the association�s management,
legal team, candidates, or the election committee have engaged in vote
tampering or fraud, the election results shall be considered void, the
violation shall constitute a disorderly persons offense, the election committee
shall report the determination to the county prosecutor�s office, and the
election committee shall conduct a new election pursuant to the procedures set
forth in P.L.1977, c.419 (C.45:22A-21 et seq.).� If the allegations concern the
election committee or its members directly, then a new election committee shall
be constituted in accordance with paragraph (1) of subsection b. of this
section for the purpose of conducting the new election.

�

����
j.� A member of the
executive board may be recalled and removed from office, with or without cause,
by the vote of, or agreement in writing by, a majority of the association
members present and eligible to vote at a special meeting of association
members called for that purpose.� The recall and removal process shall only be
initiated upon a petition signed by at least 10 percent of association members
to call such a special meeting.� The association members shall give notice of
the meeting as required, and the notice shall state the purpose of the meeting.�

(cf: P.L.2017, c.106, s.6)

���� 4.� (New Section)� The executive
board shall report qualifying expenditures to association members no less than
30 days prior to a formal vote on the expenditures.� The association or
executive board shall only approve the qualifying expenditures if not less than
a majority, or greater than a majority if required by the governing documents,
of all association members in good standing, vote in favor.� The requirements
of this subsection shall not apply to qualifying expenditures necessary to:

���� a.���� respond to an
emergency; or�

���� b.��� comply with statutory or
regulatory obligations, which shall include but not be limited to, those
concerning health, public safety, or the environment, on condition that:

���� (1)� there are no other less
expensive alternatives available for meeting the statutory or regulatory
obligations that receive approval by a majority, or greater than a majority if
required by the governing documents, of all association members in good
standing; and

���� (2)� no less than 10 days
prior to remittance or other action to commit to the qualifying expenditures, the
association or executive board submits a report of the qualifying expenditures
necessary to comply with the statutory or regulatory obligations and results of
the votes at which the qualifying expenditures and less-expensive alternatives,
failed to receive approval by a majority of all association members in good
standing, or greater than a majority if required by the governing documents, to
all association members.

���� 5.� This act shall take effect
on the first day of the seventh month next following enactment, and shall apply
to any vote or election conducted on or after the date of enactment, and any
actions in relation to the vote or election taken in anticipation of the vote
or election.

STATEMENT

���� This bill establishes fair standards
for the election and recall of executive board members of common interest
communities and requires association member approval for certain expenditures.�

���� The bill would require
associations to hold elections at two-year intervals under the administration of
an independent election committee of association members who are neither
current executive board members nor candidates for the executive board and
would restrict the maximum terms of executive board members to two years.� The
bill would also limit the size of executive boards to three members for
communities comprised of less than 11 homes, provide a default size of five
members for the executive boards of all other communities unless the bylaws
provide otherwise, and extend the election provisions of the "Planned Real
Estate Development Full Disclosure Act," P.L.1977, c.419 (C.45:22A-21 et
seq.) to include associations with less than 50 units.� Further, the bill would
clarify an association�s election notice obligations by requiring two written
notices of an election: the first, to notify members of the election, election
rules, and to allow for nominations and interested candidate applications; the
second, to provide association members with the official list of candidates, election
information, and absentee and proxy ballots. �An association would be required
to be send the first notice no later than 60 days prior to the election and the
second no more than 30 nor less than 14 days prior to the election.

����
The bill would require associations to permit owners
to vote anonymously for executive board members and to cast a ballot by mail,
in person, or by electronic means.� The election committee would have the
exclusive authority to investigate election challenges and to report substantiated
allegations of vote tampering or fraud to the Division of Housing and
Development in the Department of Community Affairs (agency), unless the
allegations involve the election committee or its members directly.� In such
case, any aggrieved association member could report only those allegations
directly concerning the election committee to the agency, which would have
discretion to conduct its own investigation.� If the agency determines that the
association�s management, legal team, candidates, or the election committee are
guilty of vote tampering or fraud, the election would be considered void,
violations constitute a disorderly persons offense, and the election committee
would be required to report

the determination
to the county prosecutor�s office.

���� The bill also establishes standard procedures for the recall
and removal of executive board officers or trustees, and provides that any
member of the executive board may be recalled and removed from office, with or
without cause, by a majority of the association members at a special meeting
called for that purpose. �

���� Further, under the bill, any expenditures in excess of
$100,000 or maintenance fee increases exceeding the Consumer Price Index (qualifying
expenditures) require 30 days� notice to be provided to all association members
prior to a formal vote on the expenditures, which require approval by a
majority of association members in good standing, or greater if required by the
governing documents. �The bill contains an exception that allows an association
to make qualifying expenditures to respond to an emergency.� The bill contains
an additional exception allowing the association to make qualifying
expenditures that are necessary to comply with statutory and regulatory
obligations, on condition that: (1) there are no other less expensive
alternatives that receive approval by a majority of association members, or
greater if required by the governing documents, and (2) the association
provides a written report to all association members of the qualifying
expenditures and votes at which the qualifying expenditures and less expensive
alternatives, failed to receive approval by a majority of association members,
or greater if required by the governing documents.

���� This bill would take effect on the first day of the
seventh month next following enactment, and apply to any vote or election
conducted on or after the date of enactment, and any actions in relation to the
vote or election taken in anticipation of the vote or election.