The "Owners' Rights and Obligations in Shared Ownership Communities Act."

S3348

SENATE, No. 3348

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 5, 2026

Sponsored by:

Senator� SHIRLEY K. TURNER

District 15 (Hunterdon and Mercer)

SYNOPSIS

���� The �Owners� Rights and Obligations in Shared
Ownership Communities Act.��

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning rights and obligations of homeowners
living in shared ownership communities, amending various parts of the statutory
law, and supplementing Title 46 of the Revised Statutes.

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

���� 1.���� (New section)� This act
shall be known and may be cited as the �Owners� Rights and Obligations in
Shared Ownership Communities Act.�

���� 2.��� (New section)� The
Legislature finds and declares that:

���� a.���� Homeowners�
associations formed to manage property shared by all homeowners, whether that
property be in condominiums, planned communities, or cooperatives, function as
quasi-governments, often providing services in lieu of governmental services,
levying assessments and imposing fines, and, through their control of
maintenance and assessment levels, rulemaking powers, and enforcement efforts,
have substantial power to affect both the quality of life and financial health
of the individual homeowners comprising their membership.

���� b.��� Current statutes are
ineffective to compel homeowners' associations to treat fairly the owners of
homes in planned communities or the holders of proprietary leases in
cooperatives, in the manner of fair treatment required for condominium owners.�
The �Condominium Act,� P.L.1969, c.257 (C.46:8B-1 et seq.) requires developers
and associations to clearly recognize the coexisting interests of each
individual homeowner in the commonly-owned facilities of a condominium, by
requiring the consent of a majority of the owners prior to making changes in
the governing documents.� That act also provides �quasi-governmental� powers to
condominium boards to impose fines on members, and to place liens on their
individual homes.� Similar protections and powers have not been enunciated in
the statutes for owners of homes or holders of proprietary leases in planned
communities and cooperatives, respectively.� The Legislature attempted to
expand the law to apply to all types of homeowners� association through the
enactment of P.L.1993, c.30, but that act has proven ineffective in making sure
that owners in all types of these communities are treated fairly and
democratically by their governing boards.

���� c.���� The unilateral manner
in which a developer is permitted under the law to make all decisions for an
association until a certain level of sales of homes have been reached may serve
to protect the developer�s investment in the community while he is selling, but
does not serve an association well when it is required to act as a governing
board and operate in a democratic and fair manner, and in the best interests of
all of the owners as required by statute.� While protecting the interests of
both, there is a need to clearly separate in the law (1) the interests and role
of a developer of a shared ownership community from (2) the interests and role
of the association formed to represent the collective shared property interests
of owners of individual properties within such communities, and (3) a need to
provide standards to association governing boards to foster transparent
governance.

���� d.��� There is a further need
to update New Jersey�s laws to provide improved, relevant disclosure to a
prospective purchaser as to the exact nature of what is being purchased, and a
clear statement of their rights and responsibilities as a member of a
homeowners� association.� There is a need to standardize certain information,
and to allow developers to submit it in an electronic format for an expedited
review by the State.

���� e.���� There is a need to
eliminate exemptions from required disclosures by developers to purchasers in
smaller shared ownership communities.

���� f.���� In order to minimize
State involvement in the affairs of homeowners� associations, and in order to
reduce the need for litigation by members of associations, there is a need to
create a truly objective, reliable, and low cost system of dispute resolution
for shared ownership communities which will be overseen and provided by
experienced neutral parties, with adequate due process protections.

���� g.��� There is a need to
foster democratic governance in community associations in the following areas,
including, but not limited to, the regulation of elections, budget adoption,
access to association records, open meetings, education of owners and governing
board members, and to raise awareness of the rights and obligations of owners
and those owners serving their communities as governing board members.� The
Legislature declares that it is necessary and in the public interest to
establish an independent Commission on Shared Ownership Communities, comprised
of individuals living in and providing services to such communities, to
function as a State liaison for such communities.� The commission will promote
an equitable balance between the interests of association governing boards,
developers, owners, and residents in these communities, through the provision
of information and the establishment of governance standards for such
associations, and will serve as a coordinating entity for the provision of
alternative dispute resolution services and enforcement of statutory rights.

���� 3.��� (New section)� As used
in this act:

���� �Association,� �community
association� or �homeowners� association� means any legal entity, incorporated
or unincorporated, that is responsible for the governance over common property
of a shared ownership community, regardless of whether the association was
required to be formed pursuant to any law or ordinance.

���� �Association documents� means
governing documents.

���� �Commission� means the
Commission on Shared Ownership Communities established pursuant to section 5 of
P.L. , c. (C. ) (pending
before the Legislature as this bill).

���� �Common ownership community�
means a shared ownership community.

���� �Cooperative housing project�
means any system of land ownership and possession in which the fee title to the
land and structure is owned by a corporation in which the shareholders of that
corporation each also have a long term proprietary lease or other long term
arrangement of exclusive possession for a specific unit of occupancy space
located within the same structure.

���� "Declaration" means
the recorded document or documents containing the servitudes that create and
govern the common ownership community.

���� �Director� means the Director
of the Division of Consumer Affairs in the Department of Law and Public Safety.

���� �Dispute� means any
disagreement between two or more parties that conforms to the requirements of
section 6 of
P.L. , c. (C. ) (pending
before the Legislature as this bill).

���� �Executive director� means the
executive director of the Commission on Shared Ownership Communities.

���� �Governing body� or �governing
board� means the council of unit owners, board of directors, trustees, or any
other body authorized by a governing document to adopt binding rules or
regulations.

���� "Governing
documents" means the declaration and other documents, such as a deed, the
articles of incorporation or articles of association, bylaws, and rules and
regulations that govern the operation of an association, or determine the
rights and obligations of the members of the shared ownership community.

���� "Member" means the
owner of an individually-owned property bound by a servitude described in an
association document to contribute to maintenance of common property or to pay
mandatory dues to the association.� In the case of a shared ownership community
in which membership in the association and the obligation to pay assessments
are independent, the term member shall mean an owner who is bound by a
servitude described in an association document to contribute to maintenance of
common property or to pay mandatory dues to the association.

���� �Owner� means the individual
owner of a residence in a shared ownership community, and includes a unit owner
in a condominium, a lot owner in a homeowners' association, and a holder of a
proprietary lease in a cooperative housing project.

���� �Owners� coordinating council�
means the group to which owners may be elected to serve, other than the
governing board.

���� �Party� means a developer, an
owner, a governing body, or an occupant of a dwelling unit in a shared
ownership community.

���� �Period of developer control�
means the period of time during which a developer has a controlling voting
interest in the decisions of the governing board of an association pursuant to
section 5 of P.L.1993, c.30 (C.45:22A-47), prior to the developer�s interests
terminating.

���� �Public Advocate� means the
commissioner of the Department of the Public Advocate.

���� �Shared ownership community�
means a community in which individual property owners are bound by a servitude
in documents required to be recorded for real property, which servitude
requires support of the shared or commonly-owned property, and the benefit and
use of the shared property is appurtenant to the individually-owned property.�
A shared ownership community may consist of a fee-simple estate, a leasehold,
or an easement, unless the responsibility for maintenance of such easement is
determined by the extent of actual use, and it may be any kind of property held
or enjoyed in common by owners of the individually owned property.� The term
shall include, but not be limited to:

���� a development subject to a
declaration, master deed or other document enforced by an association;

���� a residential condominium, as
that term is defined in section 3 of P.L.1969, c.257 (C.46:8B-3 et seq.); and

���� a cooperative housing project.

���� 4.��� (New section)� This act
is intended to supplement the law on community associations, including, but not
limited to, the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et
seq.), the �Horizontal Property Act,� P.L.1963, c.168 (C.46:8A-1 et seq.), �The
Planned Real Estate Development Full Disclosure Act," P.L.1977, c.419
(C.45:22A-21 et seq.), P.L.1993, c.30 (C.45:22A-43 et seq.), and any other law
hereinafter enacted regulating shared ownership communities and associations.�
To the extent that any other law conflicts with the provisions of P.L.��� ,
c.��� (C.��������� ) (pending before the Legislature as this bill), the laws
shall be harmonized to the extent possible; however, in the event of any
unreconciled conflicts, the provisions of P.L.��� , c.��� (C.��������� )
(pending before the Legislature as this bill) shall control.

���� 5.��� (New section)� a.� The
Legislature finds it is necessary and in the public interest to form a special
State entity to:

���� (1)�� foster proper operation
of homeowners' associations, condominium associations, and cooperative housing
corporations;

���� (2)�� promote education,
public awareness and association membership understanding of the rights and
obligations of living in a shared ownership community;

���� (3)�� reduce the number and
divisiveness of disputes, and encourage informal resolution of disputes;

���� (4)�� maintain property values
and quality of life in these communities;

���� (5)�� assist and oversee in
the development of coordinated community and government policies, programs, and
services which support these communities; and

���� (6)�� prevent potential public
financial liability for repair or replacement of shared ownership community
facilities.

���� b.��� There is established in,
but not of, the Department of Law and Public Safety, the Commission on Shared
Ownership Communities.� The commission shall serve as the State liaison for
citizens residing in shared ownership communities, and shall provide
educational and reference materials as requested by an association or its
members.� The commission, in conjunction with the director, shall adopt
governance standards for shared ownership communities and their governing
boards and managers, in accordance with P.L.��� , c.�� (C.���� ) (pending
before the Legislature as this bill), to promote fair and democratic governance
and good business practices within such communities, in accordance with the
�Administrative Procedure Act,� P.L.1968, c. 410 (C.52:14B-1 et seq.). The
commission shall monitor requests for alternative dispute resolution services,
and,

working
in conjunction with the Office of Consumer Protection within the Division of
Consumer Affairs in the Department of Law and Public Safety, shall coordinate
and facilitate the resolution of disputes and enforce statutory rights in such
communities.

���� c.���� The commission shall
appoint an executive director of the commission and such other personnel as may
be deemed necessary.� The executive director and professional staff shall serve
at the pleasure of the commission and shall receive such compensation as
provided by law.� The executive director and professional staff, and all
expenses of the commission, shall be paid from the portion of the registration
fees required to be collected and allocated pursuant to section 7 of P.L.1977,
c.419 (C.45:22A-27), and directed to be used for the purposes of the commission
pursuant to P.L. , c.���
(C. ) (pending before the Legislature
as this bill). �Members of the commission shall not be paid compensation, but
shall be entitled to be reimbursed for reasonable travel and meal expenses, not
to exceed $100 per occurrence.

���� d.��� The Attorney General
shall provide legal representation to the commission.

���� e.���� The commission shall be
comprised of 12 voting members.� Eleven public members shall be recommended for
appointment by the Attorney General and appointed by the Governor, as follows:

���� (1)�� One member shall be a
resident of a shared ownership community containing fewer than 26 units;

���� (2)�� One member shall be a
resident of a shared ownership community located in the northern region of the
State;

���� (3)�� One member shall be a
resident of a shared ownership community located in the central region of the
State;

���� (4)�� One member shall be a
resident of a shared ownership community located in the southern region of the
State;

���� (5)�� One member shall be a
resident of a cooperative housing corporation;

���� (6)�� One member shall be a
resident of an age-restricted shared ownership community; and

���� (7)�� One member shall be a
resident of a shared ownership community containing more than 499 units.

���� Of the members selected under
subparagraphs (1) through (7), no more than three may include current members
or former members of association governing boards;

���� (8)�� One member shall be
selected from developers of shared ownership communities.

���� (9)�� Two members shall be
selected from persons who are members of professions associated with shared
ownership communities; one shall be an attorney, and one shall be a
professional community association manager; and

���� (10)��� One member who shall
be a certified public accountant.

���� (11)��� The Public Advocate,
or the Public Advocate�s designee, shall serve as an ex-officio voting member
of the commission, and shall represent the rights and interests of low and
moderate income households residing in dwelling units reserved by deed
restriction for occupancy by such households within shared ownership
communities.

���� f.���� Each public member
shall serve a three-year term. Of the members first appointed, one-third shall
be appointed for one-year terms, one-third shall be appointed for two-year
terms, and one-third shall be appointed for three-year terms.� A member shall
not serve more than two consecutive full terms.� A member appointed to fill a
vacancy shall serve the rest of the unexpired term.� Members shall continue in
office until their successors are appointed and qualified.

���� g.��� All public members shall
serve at the pleasure of the Governor.

���� h.��� The members of the
commission shall elect annually a chairman of the commission.� The commission
shall meet at the call of the chair as often as required to perform its duties,
but shall meet at least quarterly. A majority of the voting members shall be a
quorum for the transaction of business, and a majority of the voting members
present at any meeting may take any official action.

���� i.���� The Director of the
Division of Consumer Affairs shall arrange for offices and supplies for staff of
the commission as appropriate, and shall be entitled to reimbursement for all
costs incurred in complying with the provisions of P.L.�� ��, c. ����(C.������
) (pending before the Legislature as this bill) from the funds available from
the fees collected from developers of planned real estate developments pursuant
to subsection e. of section of 7 of P.L.1977, c.419 (C.45:22A-27).

���� j.���� The commission shall
submit annually by March 1 of each year, a report to the Legislature and the
Governor covering its activities of the previous calendar year, summarizing its
activities, needs, and recommendations, and the extent to which the goals of
P.L.����� , c.���� (C.������� ) (pending before the Legislature as this bill)
are being met, in the manner provided under section 2 of
P.L.1991, c.164 (C.52:14-19.1).

���� 6.��� (New section)� Any party
in a shared ownership community may request alternative dispute resolution
services from the Commission on Shared Ownership Communities established
pursuant to section 5 of P.L.����� , c.���� (C.������� ) (pending before the
Legislature as this bill), in accordance with the provisions of section 7 of
P.L.���� , c.���� (C.������� ) (pending before the Legislature as this bill).

���� For the purposes of this
section, �dispute� shall be interpreted broadly to mean any matter for which a
resolution is sought which is connected in some relevant manner to a shared
ownership community or its association.

���� a.���� Prior to the filing of
a request for dispute resolution with the Commission on Shared Ownership
Communities, a party shall make a good faith effort to utilize the dispute
resolution procedures required to be adopted by their respective community
association pursuant to section 2 of P.L.1993, c.30 (C.45:22A-44),

or any
reallocation thereof, and section 14 of P.L.1969, c.257 (C.46:8B-14). If
the dispute resolution services provided or arranged by the association do not
resolve the dispute in the view of any of the parties, then any of those
parties may file a request with the Commission on Shared Ownership
Communities.� The commission shall process all requests for dispute resolution
in accordance with rules to be promulgated by the commission and the Attorney
General, in accordance with the provisions of
P.L. , c. (C. ) (pending
before the Legislature as this bill).

���� b.��� In the event a party
alleges that a violation of statutory law, or any regulations promulgated
thereto, or that a violation of association governing documents, has occurred
by a governing board or a governing board member of an association, then that
party may submit a request for review and enforcement consideration pursuant to

section
8 of P.L.���� , c.�� (C.������� ) (pending before the Legislature as this
bill).

���� c.���� Prior to filing a lien
for unpaid fines assessed upon an owner, an association shall be required to
submit the matter for review through arbitration arranged by the commission through
the Division of Consumer Affairs in the Department of Law and Public Safety, in
accordance with section 9 the provisions of P.L. , c. �
(C. ��� ) (pending before the Legislature as this bill.).
Only those liens based on fines imposed which are submitted in accordance with
this section and section 9 shall be eligible for recording with the county
recording office.

���� 7.��� (New section)� The
Executive Director of the Commission on Shared Ownership Communities shall
review all requests for dispute resolution services which are received by the
commission, and shall:

���� a.���� issue a letter opinion
advising the requester of available options or solutions, or the applicability
of the provisions of P.L. , c.���
(C.�������� ) (pending before the Legislature as this bill) to a particular set
of facts, in lieu of the provision of alternative dispute resolution services
(ADR);

���� b.��� arrange for ADR services
to be provided within a reasonable period of time through the dispute
resolution programs of the Division of Consumer Affairs in the Department of
Law and Public Safety, in accordance with regulations to be promulgated by that
department;

���� c.���� arrange for a hearing
to proceed in accordance with section 8 of P.L.����� , c.���� (C.�������� )
(pending before the Legislature as this bill) for an alleged violation of regulatory
or statutory law; provided, however, that the executive director may arrange
for ADR services in lieu of a hearing for allegations of violations of
governing documents, at his discretion;

���� d.��� arrange for a special
hearing panel for claims concerning construction deficiencies; or

���� e.���� request the
commission�s preliminary review of any request which the executive director
deems frivolous, unreasonable, or lacking any basis in fact, prior to arranging
for ADR services, or submitting a matter for review for enforcement action.� If
the commission deems the request frivolous, unreasonable, or lacking any basis
in fact, it shall reject the request.

���� The executive director of the
commission shall be authorized to act on behalf of the commission to process
initial claims and make arrangements for the provision of dispute resolution
services or hearings.� The executive director of the commission shall also be
authorized to act on behalf of the commission to impose a stay on the actions
of any governing board pending the processing and resolution of a request.

���� 8.��� (New section)� a.� The
executive director shall arrange for a hearing for allegations of a violation
of statutory or regulatory law, or may arrange for a hearing for allegations of
violations by members of the governing board of the governing documents of an
association, within 10 business days for claims of election fraud, and 90
calendar days of the receipt of all other types of requests, as follows:

���� The executive director of the
commission shall arrange for the services of an arbitrator through the local
consumer affairs offices of the Division of Consumer Affairs, through any other
dispute resolution programs of the division, or alternatively, by
interdepartmental agreement, may arrange for the services of the Department of
the Public Advocate, to conduct the hearing which shall be a binding
arbitration, or, if a majority of its members approves, the commission may
convene a hearing panel, and may make determinations with at least five of its
members participating.

���� b.��� At the hearing
authorized to be conducted pursuant to this section, the panel or arbitrator,
as the case may be, shall give full hearing to both the complaint of the
resident or residents and to any evidence in contradiction or mitigation that
the association, if present or represented and offering such evidence, may
present.� At the conclusion of the hearing, the arbitrator or panel shall
determine, if required, from the circumstances of the case:

���� (1)�� whether the governing
documents are deficient under the law, or violate any provision of P.L.���� ,
c.���� (C.������ ) (pending before the Legislature as this bill) or any other
statute or regulation relevant to homeowners� associations;

���� (2)�� whether the actions of
any members of the governing board or its employees or agents violate statutory
law;

���� (3)�� whether the governing
documents were violated by any party; or

���� (4)�� under a claim of
election fraud, whether the election proceedings comported with the standards
promulgated by the commission, and if they did not, should the election be
voided, and a new election ordered.

���� c.���� (1) On all matters the
commission shall have the authority, on the basis of the arbitrator�s findings
or the hearing panel's determination,� to install a temporary governing body in
the event it is determined that no properly-elected members are serving on the
governing body.

���� (2)�� The commission shall
also have the powers necessary to reform deficient governing documents that do
not comply with the provisions of P.L.���� , c.����� (C.������� ) (pending
before the Legislature as this bill), or any other State or federal law to make
those documents comply.

���� (3)�� The commission shall
have the power to impose fines on governing board members, or a governing
board�s employees or agents, equal to those powers granted by the Legislature
to governing boards permitting them to impose fines on members of associations.

���� (4)�� The commission shall
have the power to stay a lien filing for an assessment, attorney�s fees, or
late fees if it is determined through either an ADR or a hearing that the basis
for the lien is not warranted or on the basis that the association has not
registered with the commission; the commission shall also have the power to
order a release of lien to be prepared and filed by an association.

���� (5)�� The commission may:

���� (a)�� petition the court to
appoint a receiver of a shared ownership development in any case in which the
developer has abandoned the development;

���� (b)�� in the case of a shared
ownership community which has more than 50 percent of its units foreclosed
upon, appoint a governing board from the members of the association who are not
banks, mortgagees or other lending institutions which hold the units through
foreclosures, and appoint a property manager, which appointment power shall
terminate upon the owners, other than foreclosing banks or mortgages, holding a
51 percent voting interest in the association, electing their own governing
board and contracting on their own behalf for management services.

���� (c)�� appoint to the governing
board of an association a temporary member to replace the voting interests of
the developer, in the event the developer has filed for bankruptcy.

���� (d)�� appoint a temporary
property manager for an association that has a dispute under review, when that
association has no properly elected governing board members and no property
manager, which appointment shall be effective until valid elections are held or
until the community terminates in accordance with law.

���� d.��� The commission, in
conjunction with the Director of the Division of Consumer Affairs and the
Director of the Division of Codes and Standards in the Department of Community
Affairs, shall empanel a select advisory panel for claims concerning
construction defects in common elements.� The panel should be comprised, to the
extent feasible, of individuals with significant knowledge in the construction
of residential housing and other structures, and may include any of the
following:

���� (1)�� members of a county
construction board of appeals;

���� (2)�� members of the code
advisory board in the Department of Community Affairs; or

���� (3)�� local code enforcement
officials;

but shall not include any officials
or individuals who were or are serving in a capacity which gave or gives them
responsibility in any manner for oversight of the specific construction which
is the subject of the dispute resolution.

���� Upon receiving a claim from an
owners� coordinating council concerning construction deficiencies or warranty
issues pertaining to common elements of a shared ownership community, the
executive director of the commission shall arrange for arbitration for claims
of construction defects in the common elements of a shared ownership community,
and, shall be authorized to utilize the expertise of the select advisory panel
to make a determination of developer negligence or liability.

���� e.���� Hearings under P.L.�� ���,
c.� ���(C.������ ) (pending before the Legislature as this bill may be
conducted:

���� (1)�� by the division at the
local consumer affairs office servicing the region in which the homeowners�
association is located;

���� (2)�� by the commission with
at least five of its members participating, if no local panel is available to
the division; or

���� (3)�� by an arbitrator
selected by the director.

���� f.���� (1) If any person
summoned to be examined pursuant to this section shall refuse to be sworn, or
to affirm, or to testify, or to answer a proper question, or to produce the
books, papers, documents or tangible things demanded, or shall otherwise engage
in misconduct, the Superior Court may, on motion, and after affording that
person the opportunity to be heard, punish that person in the same manner as
like failure is punishable in a case pending in the court.

���� (2)�� Orders of an arbitrator
under this section, if binding arbitration has been selected, shall be binding
upon the parties.� The failure of any person to obey a binding order of the
arbitrator issued in accordance with this section shall be punishable as contempt
of court by the court in the same manner as like failure is punishable in an
action pending in the court when the matter is brought before the court by
motion filed by the Attorney General and supported by affidavit stating the
circumstances.� In the case of a finding by the commission that an officer or
trustee of the governing body knowingly or willfully failed to follow the
governing documents, such officer or trustee shall be deemed to have vacated
their position on the governing body, and a new election for his or her
position shall be held within 90 days of the finding.

���� 9.��� (New section) �a. �The
commission shall arrange for arbitration on all proposed lien filings based on
fines imposed within 15 days of submission by an association.� A determination
to approve or disapprove an association�s request for lien filing on the basis
of fines imposed shall be made no later than 60 days from the date of the claim
submission.� Extensions may be granted to any party to submit additional
information; however, the commission shall have the discretion to disapprove a
lien filing upon the repeated failure of an association to provide requested
information to either entity.

���� b.��� The director shall
establish expedited procedures to approve or disapprove lien filings for unpaid
fines, and shall establish the forms required to be filed with the county clerk
to authorize such lien filing when approved pursuant to this section.

���� c.���� Unless otherwise
specified in P.L.�� ���, c.� ���(C.������ ) (pending before the Legislature as
this bill), all hearings and alternative dispute resolution procedures shall be
conducted in accordance with procedures adopted by the agency providing the
services, and relevant applicable law.� Dispute resolution may be handled as a
binding arbitration at the discretion of the commission; if so, an appeal may
be made only to the extent allowed for appeals made under binding arbitration.�
An arbitrator shall make a final determination in any matter no later than 90
days from the last hearing date, but may grant reasonable continuances of the
hearing in order to fully investigate the matter.

���� 10.� (New section)� Upon the
adoption of the regulations required to be promulgated pursuant to section 14
of P.L.���� , c.��� (C.������ ) (pending before the Legislature as this bill),
every association as defined under section 3 of P.L.���� , c.��� (C.������� )
(pending before the Legislature as this bill) shall complete and submit an
annual informational disclosure to the Commission on Shared Ownership�
Communities established pursuant to section 5 of P.L. �
, c. �
(C. ) (pending before the Legislature
as this bill), on such form and in such a manner as the commission shall
require.� Thereafter, an association shall be required to disclose these items
annually to the commission, in accordance with its regulations.� There shall be
no fees required of any association, or any member of an association, for
submitting such information.

���� At a minimum, the disclosure
form shall require:

���� The name, location and address
of the shared interest community, and the number of dwelling units located
therein;

���� A statement as to whether the
association is incorporated, and the location of the corporate agent;

���� The name of the most
recently-elected officers or trustees of the association, the length of their
terms of office, and contact information, including mailing addresses for each
of them;

���� The name of the agent for
service of process of the association;

���� The name of the developer of
the community, if still actively selling or renting in the community, and the
developer�s current address, if known; and

���� Any additional information
that the commission may deem useful to carry out its purposes under P.L.����� ,
c.��� (C.������ ) (pending before the Legislature as this bill).

�����
11.� (New section)�
a.� It shall be unlawful under P.L.1960, c.39 C.56:8-1 et seq.) for an
association which has been formed to manage a shared ownership community to
violate the provisions of P.L.����� , c.� ���(C. �����) (pending before the
Legislature as this bill.)

���� b.��� It shall be unlawful
under P.L.1960, c.39 (C.56:8-1 et seq.) for a developer of a shared ownership
community to violate the provisions of P.L.����� , c. ����(C. �����) (pending
before the Legislature as this bill).

���� c.���� The Alternative Dispute
Resolution Program established by the Division of Consumer Affairs in the
Department of Law and Public Safety shall be expanded to include dispute
resolution services to homeowners and residents of shared ownership
communities. The expanded program shall permit trained volunteers who are also
residents or professional employees of such communities to participate in the
provision of dispute resolution, provided that for each dispute at least three
volunteers shall be utilized, and no more than one of them shall be an employee
of, or sit as a current member of, a homeowners� association governing board,
or has served as a member of a homeowners� association governing board within
the immediate preceding two years.� A property manager currently employed by an
association shall not participate as a dispute resolution volunteer for that
association.

���� d.��� The director shall
promulgate such rules and regulations as necessary to effectuate this section
pursuant to the �Administrative Procedures Act,� P.L.1968, c.410 (C.52:14B-1 et
seq.).

���� 12.� (New section)� a.� The
activities of the Commission on Shared Ownership Communities shall be funded
from the fees imposed upon developers upon the registration of planned
developments pursuant to section 7 of P.L.1977, c.419 (C.45:22A-27), as amended
by P.L.��� , c.���� (C.������ ) (pending before the Legislature as this bill).

���� b.��� In the event that these
fees described in section a. of this section are insufficient to defray the
costs associated with the provision of dispute resolution services under the
provision of P.L. � , c.���� (C.������� ) (pending before
the Legislature as this bill), the� provider of dispute resolution services may
charge an association a reasonable fee to defray the costs of dispute
resolution services provided, or administrative costs incurred in connection
with, the provision of those services.

���� c.���� Dispute resolution
services shall be deemed to be provided upon the agreement of the commission to
hear, or arrange for mediation or arbitration.� Those associations that have
not provided information as required pursuant to section 10 of P.L. , c. (C. ) (pending
before the Legislature as this bill) as of the date dispute resolution services
are deemed provided shall do so immediately prior to the provision of services.

���� 13.� (New section)� This
section shall be known and may be cited as the �Bill Of Rights And
Responsibilities For Owners In Shared Ownership Communities.�

���� a.���� The commission shall
publish the following and post on its Internet site, the following information,
as set off by quotation marks:

���� �Bill Of Rights And
Responsibilities For Owners In Shared Ownership Communities.

���� As a member of a shared
ownership community association:

���� (1)�� You have the right to be
informed before buying a home in a shared ownership community of the
community's governing documents, financial condition, assessments and fees, and
its rules and regulations. You have the duty to ask for this information from
the seller, to read and understand it, and to obey the rules if you buy the
home; You have the right to notify the Division of Consumer Affairs in the
Department of Law and Public Safety if a developer has not furnished you with
this information;

���� (2)�� You have the right to be
treated with respect by your neighbors and by the governing board members and
managers of your community. You have the duty to treat your neighbors,
directors, officers, and managers with respect.

���� (3)�� You have the right to
privacy consistent with the law and the reasonable rules of the community.� You
(and your tenants, if any) have the duty to respect the rights of your
neighbors to enjoy their privacy.

���� (4)�� You have the right to
prompt and effective service from your association�s governing board members or
management.� You have the duty to pay your legitimately imposed assessments on
time.

���� (5)�� You have the right to
vote in elections and to vote on the adoption of new rules, as permitted under
State law; and to vote on the assessments, when permitted by law or community
rules.� You have the duty to inform yourself of the issues, and to vote on them.

���� (6)�� You have the right to
vote to approve the sale of any of the common elements or common property of
the community as provided under State law; and you have the right to vote to
approve the construction of any new common facilities or common elements if those
facilities were not listed on the master deed or declaration as �to be built�
when you purchased your individual property in the community, as provided under
State law.� You have the duty to participate in voting when required for
association actions.

���� (7)�� You have the right to
fair elections and to be nominated for and to run for office.� You have the
duty to make sure that elections are fair and that candidates for whom you vote
are qualified.

���� (8)�� You have the right to
honest and reasonable government from your elected board and the managers it
chooses.� You have the duty to participate in the affairs of the community by
volunteering your time and talents as needed and by informing yourself of the
board's activities.

���� (9)�� You have the right to be
informed of your community's acts and financial condition, including balances
in reserve accounts, and to inspect, and make copies of, its books and
records.� You have the duty to know and understand its rules, and to provide to
the community any information required by the rules, unless prohibited by law.

���� (10)��� You have the right to
meet with your fellow owners to discuss the community's and the board's
conduct, free of charge.� You have the duty to obtain the information necessary
to form a fair and balanced opinion, and to promote positive solutions for the
good of the community.

���� (11)��� You have the right to
fair treatment if you are charged with a violation of the community rules.�
This includes the right to know what rule is involved and to a fair hearing,
and a right to appeal any violation to the Commission on Shared Ownership
Communities.� You have the duty to respond to any such claim promptly and
honestly, and to cooperate in good faith and in a civilized manner in an effort
to resolve the dispute.

���� (12)��� If you are unable to
resolve disputes directly with your community, you have the right to bring your
dispute to the Commission on Shared Ownership Communities, where it may be
resolved without the need for expensive litigation.� You have the duty first to
bring your dispute to the attention of the community's governing board and to
allow the board a fair opportunity to respond, and to use whatever dispute
resolution procedures your community requires, provided those procedures
comport with State law; if you bring your dispute to the commission you have
the duty to cooperate in the commission's complaint process and to treat other
parties with respect.

���� (13)��� You have the right to
architectural and other rules (such as parking or pets) that are properly
adopted and published, that are clear and reasonable, and that are fairly and
consistently enforced.� You have the right to seek changes to any rules that
you believe are obsolete or inappropriate.� You (and your tenants, if any) have
the duty to obey the rules, to follow the proper procedures to obtain any
required permission for modifications you wish to make, and to keep the area
around your home clean and free of trash, pests, and other nuisances.�

���� b.��� Nothing in this section
shall be construed as permitting the rights enumerated in this section to be
waived in any manner by any association or owner.

���� c.���� Nothing in this section
shall be construed as prohibiting the waiver of any constitutional rights by an
owner, provided that any waiver so executed shall be in writing and shall
contain documentation that the owner has:

���� (1)�� a specific knowledge of
the constitutional right being waived; and

���� (2)�� made an intentional
decision to abandon the protection of the constitutional right.

���� 14.� (New section)� a.� Within
120 days of the effective date of P.L.���� , c.���� (C.������� ) (pending
before the Legislature as this bill), the commission shall adopt, and from time
to time review for amendment, minimum standards for conduct for shared
ownership community associations, which shall include, but not be limited to,
all the requirements for such associations as provided in
P.L. , c. �
(C. ) (pending before the Legislature as
this bill) on such matters as elections, including recall elections, voting,
access to records, maintenance and retention of records, minutes, association-provided
dispute resolution services, bidding, audits, and conflicts of interests.� The
commission may adopt more specific requirements for each of these matters than
those required pursuant to P.L.������ , c.����� (C.������� ) (pending before the
Legislature as this bill), provided that the standards adopted comport with the
intent of the Legislature to foster democracy and fairness in matters of
governance by an association, and protect the rights of owners to vote on
matters guaranteed under P.L.��� , c.��� (C.������ ) (pending before the
Legislature as this bill).

���� b.��� The commission shall
establish a program and materials for the training of owners who are elected to
serve on the governing boards of shared ownership communities.� At least two
hours of training shall be mandatory on the part of board members, which shall
be completed no later than 180 days prior to the expiration of the member�s
term of office.� The program shall provide guidance on all of the information
relevant to a board member effectively serving at the helm of their community,
and shall include good business practices, model record keeping procedures,
legal requirements for boards, the making of a budget and maintaining reserve
accounts, information on various State entities available to assist the board,
and any other information the commission deems relevant.� The commission shall
have the authority to remove a board member who does not complete the training
required pursuant to this section.

���� c.���� The commission shall
adopt forms and procedures for the disclosure of information by associations as
required pursuant to section 10 of P.L.��� , c.���� (C.������� ) (pending
before the Legislature as this bill).

���� d.��� The commission shall
maintain an Internet site to effectuate the purposes of P.L.��� , c.�����
(C.������ ) (pending before the Legislature as this bill).

���� The commission shall adopt the
regulations necessary to effectuate this section pursuant to the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

���� 15.� (New section)� Within�
120� days of the effective date of P.L. � , c.����
(C.����� ) (pending before the Legislature as this bill), the director, in
consultation with the Commission of Shared Ownership Communities, established
pursuant to section 5 of P.L. � ,c.���� (C.��� ) (pending
before the Legislature as this bill), shall:

���� a.���� cause to be prepared
and distributed in written form and on available on the Internet, a booklet,
which shall be made available to the general public, to associations and to
homeowners in shared ownership communities, and which shall serve as a general
guide to community associations.� The booklet shall be distributed free of
charge by the association to each homeowner and by each developer to
prospective purchasers prior to the signing of a sales contract; it shall be
the duty of each seller of a unit to provide a copy of the booklet to a purchaser
of the unit before the time of signing of the sales contract.� The booklet
shall include at least the following:

���� (1)�� An explanation of the
nature of home ownership in a shared ownership community and a glossary of
relevant terms, including, but not limited to, "master declaration,"
"bylaws," "master deed," "covenants and restrictions,"
"common elements," "liens," "fines,"
"rules," "alternative dispute resolution," "fees,"
and "governing board";

���� (2)�� A description of the
rights and responsibilities of homeowners, including those contained in section
12 of
P.L. , c. �
(C. ) (pending before the Legislature as
this bill);

���� (3)�� A description of the
duties and powers of, and restrictions on, governing boards, including
reference to any applicable statutes, regulations, and relevant court decisions.
�The booklet shall include information concerning conflict of interest
requirements applicable to governing board members, officers and to
professionals hired by associations and shall also include reference to any
other sources of information that may be recommended by the commission as being
of assistance to governing board members and officers in the discharge of their
duties;

���� (4)�� A description of the
statutory and regulatory requirements for association bylaws or rules and such
other material as the commission shall deem useful;

���� (5)�� A description of the
special rules applicable to units which are subject to affordability controls,
including municipal ordinances or other items which may affect the payment of
common expenses, and reference materials concerning resale controls which may
apply to such units;

���� (6)�� A description and
reference to the federal law concerning the housing for older persons exception
from discrimination under the federal Fair Housing Act Amendments of 1988,
which applies to age-restricted communities; and

���� (7)�� A listing of documents
and other information that a potential purchaser of a unit in a shared ownership
community should obtain before entering into a contract to purchase a unit,
including, but not limited to: copies of the association's governing documents;
a copy of the latest capital reserve study, if any, showing the condition, life
expectancy, and replacement costs of major mechanical systems and other common
elements; any litigation pending against the association; any pending notices
or orders issued by any governmental entity; the association's procedures for
alternate dispute resolution and an explanation of statutory and regulatory
requirements, process of adopting rules, conducting elections, providing access
to records, approval of budgets, and review of homeowners' applications to do
work on their units; delinquency and foreclosure rates; the association's
insurance coverages; and governmental and non-governmental remedies available
in the event of violation of the rights of unit owners.� These documents and
this information shall be made available to prospective purchasers upon written
request and copies shall be provided, for a charge not exceeding the reasonable
cost of copying or printing, to any person who has contracted to purchase a
unit or home within the shared ownership community; and

���� b.��� make publicly available
by means of electronic Internet technology all of the material required
pursuant to this section.

���� The Director of the Division
of Consumer Affairs shall promulgate such regulations as are necessary to
effectuate this section pursuant to the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

���� 16.� (New section)� a.� In a
shared ownership community, each purchaser of a dwelling unit, or leasehold
interest derived through the purchase of shares, in the case of a cooperative
housing corporation, shall be deemed to have a proportional ownership interest
in the common elements of the shared ownership community, which interests shall
arise concomitantly with the purchase of a unit, house, or leasehold unit in
the shared ownership community.� The ownership interests in the shared property
of a shared ownership community for each purchaser of a dwelling unit, house,
or cooperative leasehold unit shall be expressed in the association documents
as follows:

���� (1)�� for a condominium, a
proportional undivided interest assigned to each unit, as required pursuant to
P.L.1969, c.257 (C.46:8B-1 et seq.);

���� (2)�� for a cooperative, a
proportional interest in the cooperative corporation, expressed in shares; or

���� (3)�� for a planned
development, a proportional interest assigned in the same proportion as the
common expense liability for each member; however, title to the common property
may be in the name of the association collectively on behalf of all members, or
it may be reflected as an interest allocated to each individually-owned
property, in the manner as permitted for a condominium pursuant to P.L.1969,
c.257 (C.46:8B-1 et seq.).

���� b.��� A developer of a shared
ownership community shall be deemed to be the owner of any unsold units, and
any common elements interests assigned to such unsold units.� During the period
of developer control of an association as defined pursuant to section 5 of
P.L.1993, c.30 (C.45:22A-47), a developer shall be deemed the owner of the
interests in the common elements which have not otherwise been assigned to
individual owners.

���� c.���� The provisions of this
section shall be deemed to control all declarations, master deeds, and bylaws,
regardless of the date of the formation of the shared ownership community.

���� 17.� (New section)� Ownership
rights in the common property of a shared ownership community shall be
construed broadly to:

���� a.���� prohibit long-term
developer control of an association beyond the time period authorized under
section 5 of P.L.1993, c.30 (C.45:22A-47);

���� b.��� prohibit the delegation
of powers from a constituent association to a master association in the
community whenever the delegation of powers affects property, or the
responsibility for property, which is not the common property of all members of
the master association or affects services not shared in common by all members
of the community; and

���� c.���� require a vote of
approval by at least 67 percent of the members of the association prior to the
sale of any common elements or to the construction of any new common elements
which were not listed in the association documents to be constructed by the developer
or the association, and which are not considered repairs or enhancements to
current common elements under the criteria set forth in section 21 of P.L.��� ,
c.���� (C.������ ) (pending before the Legislature as this bill).� No action
shall lie or be brought by an association to compel the members of the
association to vote to approve any of the items in this subsection.

���� 18.� (New section)� The
governing board and its agents, servants, and employees, shall act in
accordance with the properly recorded bylaws of the association.� For the
purposes of this section, properly recorded means recorded in the official
government recording office for such documents in the county in which the real
property is located.

���� a.���� In addition to the
provisions of P.L.1969, c.257 (C.46:8B-1 et seq.) and P.L.1993, c.30
(C.45:22A-43 et seq.) which provide requirements for bylaws, the bylaws of an
association shall include, and, if they do not, shall be deemed to include, the
following provisions:

���� (1)�� The form of
administration of the association shall be described, providing for a governing
board, specifying the powers, duties, manner of selection and removal, and
compensation, if any, of the officers, directors, or trustees of the governing
board.� Unless otherwise provided in the bylaws, the governing board shall
consist of five members.� The governing board shall elect from among its
members a president, vice president, secretary, and treasurer, who shall
perform the duties of those offices customarily performed by officers of
nonprofit corporations.� On or after the effective date of P.L.����� , c.����
(C.������� ) (pending before the Legislature as this bill), these officers
shall serve without compensation, unless compensation is authorized by a vote
of 67 percent of all members eligible to vote, which shall be effective for a
period of no longer than three years.� The governing board may appoint and
designate other officers and assign them such duties as it deems appropriate.�

���� (2)�� (a)� The method for
providing notice to members and the holding of meetings of the association;
provided that a meeting of the members shall be held at least annually, and a
requirement that minutes be kept at every meeting;

���� (b)�� inclusion in at least
one meeting notice annually a disclosure of the fact that owners may file
requests for dispute resolution with the Commission on Shared Ownership
Communities and a statement made to that effect at that meeting; and

���� (c)�� a requirement that the
minutes of all meetings of the members and of all meetings of the governing
board be kept and made available to the members within a reasonable time after
the meeting.� Minutes shall be kept in a businesslike manner, shall reflect accurately
what was discussed at the meeting, but need not be verbatim, and shall be
available for inspection by members, or their authorized representatives, and
board members at reasonable times.� The association shall retain these minutes
for a period of not less than seven years.� Minutes of closed sessions shall be
made available in a redacted form if required pursuant to regulations of the
Commission on Shared Ownership Communities.

���� (3)�� The share or percentage
of, and the manner of sharing, common expenses for each member shall be
stated.� The manner of sharing the common expenses for each member of a planned
development constructed on or after the effective date of P.L. � , c. �
(C. ) (pending before the
Legislature as this bill), containing only single family homes on separate lots
shall be on a per unit basis.� Members of associations of shared ownership
communities constructed prior to the effective date of P.L. �
, c. � (C. )
(pending before the Legislature as this bill) shall be permitted to petition
their association governing board to call for a meeting to vote to change the
method of sharing the common expenses, upon obtaining the signatures of at
least five percent of all of the members of the association.� The share or
percentage of obligation for the common expenses shall not be computed on a
different basis than the allocation of interests in the common property among
the individual unit or home owners in any community.

���� (4)�� The manner of collecting
from the members their shares of the expenses for the maintenance of the shared
ownership community property shall be stated.� Assessments shall be made
against members not less frequently than quarterly, in amounts not less than
are required to provide funds in advance for payments of all of the anticipated
current operating expenses and for all of the unpaid operating expenses
previously incurred.� The Commission on Shared Ownership Communities may vary
from the provisions of this subparagraph by regulation.

���� (5)�� The method by which the
bylaws may be amended consistent with the provisions of P.L.����� , c.����
(C.������� ) (pending before the Legislature as this bill) shall be stated.� If
the bylaws fail to provide a method of amendment, the bylaws may be amended if
the amendment is approved by no less than two-thirds of the members.� No bylaw
shall be revised or amended by reference to its title only.

���� (6)�� The officers and
directors or trustees of the association shall have a fiduciary relationship to
the members.

���� (7)�� (a)� Any member of the
governing board may be recalled and removed from office, with or without cause,
by the vote of, or agreement in writing by, a majority of all members of the
association, provided that any vote to recall shall be initiated only upon a petition
of at least five percent of all owners.� A special meeting of the association
membership to vote for the recall of a member or members of the governing board
shall thereafter be held, giving notice of the meeting as required for a
meeting of members, and the notice shall state the purpose of the meeting.

�����
(b)�� Any member of an
association shall be permitted to request a hearing before the commission
whenever a petition for a recall vote has been presented to a governing board
in accordance with this subparagraph, and the board has failed to call for a
special meeting of the association within 20 days of the receipt of the
petition.� Under such circumstances, the governing board shall be barred from
expending resources to delay the holding of a special meeting, but shall be
permitted to expend such funds as are necessary to confirm the validity of the
petition.� The commission may consider whether it is necessary to escrow funds
of any association pending such a special meeting.� Notwithstanding this subparagraph,
if there are less than 45 calendar days until the next scheduled election, the
holding of a special meeting shall not be required.

���� (8)�� A procedure for
notifying the governing board if a member intends to make an audio or video
recording of a meeting; provided that permission to make an audio recording for
a member�s own use shall not be denied to a member, regardless of whether the
governing board arranges to record the same meeting.� The board shall announce
prior to the start of a meeting whether an audio or video recording is being
made.

���� (9)�� A requirement for
maintaining adequate insurance to protect the association and the property
comprising the common elements of the shared ownership community.� Insurance
shall cover replacement costs, and deficits in insurance coverage on common
elements shall not be chargeable to any individual unit owner.� A copy of each
policy of insurance in effect shall be made available for inspection by members
at reasonable times.

���� (10)��� A method of adopting
and of amending administrative rules and regulations governing the details of
the operation and use of the shared ownership community property; and

���� (11)��� Restrictions on, and
requirements respecting the time, place, and manner of the use of the common
community property,� so long as such restrictions and requirements are not
inconsistent with the association documents, P.L.����� , c.��� (C.������� )
(pending before the Legislature as this bill), the regulations of the
Commission on Shared Ownership Communities, and any other local, federal, or
State law.

���� b.��� Whether or not
incorporated, the association shall be an entity which shall act through its
officers and may enter into contracts, bring suit, and be sued.� If the
association is not incorporated, it may be deemed to be an entity existing
pursuant to P.L.�� ����, c. �����(C.�� ����) (pending before the Legislature as
this bill) and a majority of the members of the governing board or of the
association, as the case may be, shall constitute a quorum for the transaction
of business.� Process may be served upon the association by serving any officer
of the association or by serving the agent designated for service of process.�
Service of process upon the association shall not constitute service of process
upon any individual unit owner.

���� c.���� The Commission on
Shared Ownership Communities may promulgate more specific guidelines for bylaw
provisions, in accordance with the provisions and purposes of
P.L. , c. (C. ) (pending
before the Legislature as this bill), in order to foster transparent and
democratic governance in shared ownership communities.� Such guidelines may
include bidding procedures, restrictions on conflicts of interests, meeting and
minutes requirements, or any matters which the commission deems necessary to
minimize disputes and promote transparent and democratic governance within
shared ownership communities.

���� 19.� (New section)� a.� Any
management, employment, service or maintenance contract, or contract for the
supply of equipment or material which is directly or indirectly made by or on
behalf of an association, during the period of developer control pursuant to
section 5 of P.L.1993, c.30 (C.45:22A-47), shall not be entered into for a
period in excess of two years.� Any such contract or lease may not be renewed
or extended for periods in excess of two years and at the end of any two-year
period, an association may terminate any further renewals or extensions
thereof.

���� b.��� Notwithstanding the
above, any management contract or agreement entered into after the effective
date of
P.L. , c. (C. ) (pending
before the Legislature as this bill) shall terminate 90 days after the first
meeting of a governing board whose decisions are not subject to the voting
control of the developer pursuant to section 5 of P.L.1993, c.30 (C.45:22A-47),
unless the owner-controlled governing board ratifies the contract or agreement.

���� 20.� (New section)� a.� An
association shall maintain all records concerning the business and governance
matters of the association, in accordance with generally accepted accounting
standards and principles.

���� The records required to be
maintained shall include, but not be limited to:

���� (1)�� records of receipts and
expenditures, cancelled checks, general ledgers, and copies of contracts or any
other legal documents, including, but not limited to, opinions of the
association attorney construing the governing documents, correspondence with
any federal, State, or local governmental entity; and

���� (2)�� An account for each
member, designating the name and current mailing address of the member, the
amount of each assessment, the dates on which and amounts in which the
assessments come due, the amount paid on the account, and the balance due.

���� b.��� Records shall be open to
inspection by association members or their authorized representatives at
reasonable times, and written summaries of such records shall be supplied at
least annually to the members or their authorized representatives.� All records
required to be available for inspection by association members shall be
maintained by an association for a period of not less than seven years. The
records may be permitted to be maintained in a graphically-based form on an
easily accessible electronic media, from which copies may be reproduced.

���� (1)�� An association shall not
charge a fee to an owner for viewing or copying association records which
exceeds the cost permitted to be charged to a requester under section 6 of
P.L.2001, c.404 (C.47:1A-5).

���� (2)�� A requesting owner who
is denied access to an association record by the custodian of the record, at
the option of the owner, may:

���� (a)�� institute a proceeding
to challenge the custodian's decision by filing an action in Superior Court
which shall be heard in the vicinage where it is filed by a Superior Court
Judge who has been designated to hear such cases because of that judge's
knowledge and expertise in matters relating to access to records; or

���� (b)�� in lieu of filing an
action in Superior Court, file a request for assistance in obtaining records
with the Commission on Shared Ownership Communities established pursuant to
section 5 of P.L. � , c. � (C. )
(pending before the Legislature as this bill).

���� In the event a proceeding is
instituted under subparagraph (a) of this paragraph, the failure of the
association to permit inspection of its accounting records by members or their
authorized representatives shall entitle any persons prevailing in an enforcement
action to recover reasonable attorney's fees from the person in control of the
books and records, if that person, who directly or indirectly, knowingly denied
access to the books and records for inspection.

���� 21.� (New section)�
Notwithstanding any association document, or any law to the contrary, on or
after the effective date of P.L. �
, c. �
(C. ) (pending before the Legislature
as this bill):

���� a.���� Construction of any new
common element not listed or contemplated on the master deed or declaration
shall require an amendment to the declaration.� For the purposes of this
subsection �construction� shall include construction, reconstruction, or
substantial alteration of a common element whenever the construction, reconstruction,
or alteration does not involve repair or replacement using substantially the
same materials as the original construction to that existing common or limited
common element, but shall not mean any construction undertaken pursuant to a
governmental or court order.� This subsection shall not apply to construction,
or financing in conjunction with that construction, undertaken by a developer
in accordance with the association documents.

���� b.��� Except as expressly
permitted in this section, an association shall not collect from its members as
part of the customary association assessment, or pay from association funds,
dues or contributions to any private trade or industry organization concerning
community associations, or make contributions for charitable or political
purposes.� An association may collect dues, or charitable or political
contributions if authorized under the bylaws, but such collections shall be stated
separately from the billing for customary monthly maintenance charges, shall be
clearly designated as voluntary, and if unpaid, may in no case be assessable or
collectible as an unpaid common expense against an owner.� A contribution to
any private trade or industry organization through a property management
company or property manager on behalf of an association is prohibited.� An
association violating this subsection shall be subject to sanctions by the
Commission on Shared Ownership Communities, as set forth in
P.L. �� , c. � (C. )
(pending before the Legislature as this bill).� Any member of a governing board
who knowingly violates this subsection shall be removed from the governing
board by the Commission on Shared Ownership Communities, and a new election
ordered for that position.

���� c.���� Regardless of any
governing documents to the contrary, an owner of more than one unit shall not
have attributed to him or her more than 50 percent of all of the votes in the
association.� This subsection shall not apply to shared ownership communities
containing less than four dwelling units; provided that this number may be
modified by the Commission on Shared Ownership Communities pursuant to
regulations.

���� 22.� (New section)� a.� Unless
the members of an association have determined, by a majority vote at a duly
called meeting of the members, to provide no reserves or fewer reserves than
required by this subsection, in addition to annual operating expenses, the budget
of an association shall include individual reserve accounts for capital
expenditures and deferred maintenance.� These accounts shall include, but are
not limited to, roof replacement, building painting, and pavement resurfacing,
regardless of the amount of deferred maintenance expense or replacement cost,
and for any other item for which the deferred maintenance expense or
replacement cost exceeds $10,000.� The amount to be reserved shall be computed
by means of a formula which is based upon estimated remaining useful life and
estimated replacement cost or deferred maintenance expense of each reserve
item.� The association may adjust replacement reserve assessments annually to
take into account any changes in estimates or extension of the useful life of a
reserve item caused by deferred maintenance.

���� b.��� Reserve funds and any
interest accruing thereon shall remain in the individual reserve account or
accounts, and shall be used only for authorized individual reserve expenditures
unless their use for other purposes is approved in advance by a majority vote
of all of the members.

���� c.���� In a multi-association
community, only the voting interests of the units subject to assessment to fund
the reserves in question shall be eligible to vote on questions that involve
waiving or reducing the funding of reserves, or using existing reserve funds
for purposes other than purposes for which the reserves were intended.

���� d.��� The budget, account
balances, and reserve accounts shall be disclosed to owners in an annual
financial statement, and to prospective purchasers upon the signing of a
contract for sale.� Associations shall have audits performed by a certified
public accountant at least once every three years.� The audit reports shall be
filed with the Commission on Shared Ownership Communities, established pursuant
to section 5 of P.L.��� , c.���� (C.������ ) (pending before the Legislature as
this bill).� The commission may waive the requirement for an audit for
associations with diminutive annual expenditures, and in addition may adopt
regulations concerning the frequency and type of audits required.

���� 23.� (New section)� a.� Unit
owners may be subject to reasonable fines or other sanctions, other than liens
therefor, imposed by the governing board for failure to comply with the bylaws
or rules adopted by the association, which fines or sanctions may be imposed
only subsequent to alternative dispute resolution proceedings provided in
accordance with the association�s properly adopted dispute resolution
procedures and compliance with the informational disclosure requirements of
P.L.����� , c.��� (C.������ ) (pending before the Legislature as this bill).

���� b.��� An owner individually, a
group of owners, or the association may maintain an action for the recovery of
damages, or for injunctive relief, or a combination thereof, for the failure to
comply with the rules or bylaws, or the failure to uphold the rules or
bylaws in the case of an association, provided a request has not been
filed with the Commission on Shared Ownership Communities for alternative
dispute resolution services pursuant to P.L.
, c. � (C. )
(pending before the Legislature as this bill) by any party named in the action,
and the resolution of that request is still pending.� The prevailing party on
the majority of issues litigated in an action for recovery of damages or
injunctive relief, whether a unit owner or owners, or the association, shall be
entitled to reasonable expenses, including attorneys fees, that may be incurred
by it in connection with such action.

���� 24.� (New section)� No lien
shall be recorded by an association for a fine imposed after the effective date
of P.L.����� , c.���� (C.������ ) (pending before the Legislature as this bill)
without judicial or administrative review as provided under P.L.���� , c.����
(C.������ ) (pending before the Legislature as this bill).� No association
shall impose a fine after the effective date of P.L.���� , c.���� (C.������ )
(pending before the Legislature as this bill), unless such association shall
have offered alternative dispute resolution to the member in accordance with
P.L.����� , c.���� (C.������ ) (pending before the Legislature as this bill)
and shall have provided the information to the Commission on Shared Ownership
Communities as required by P.L.���� , c.���� (C.������� ) (pending before the
Legislature as this bill).

���� 25.� (New section)� a.� There
is created in the Division of Consumer Affairs of the Department of Law and
Public Safety, a Bureau of� Homebuyers Protection.� On and after the effective
date of P.L.���� , c.��� (C.������� ) (pending before the Legislature as this
bill), this bureau shall be the State entity responsible for enforcing the
consumer protections afforded purchasers in shared ownership communities
pursuant to "The Planned Real Estate Development Full Disclosure
Act," P.L.1977, c.419 (C.45:22A-21 et seq.).

���� b.��� The bureau shall
promulgate such rules and regulations as may be necessary to effectuate �The
Planned Real Estate Development Full Disclosure Act, P.L.1977, c.419
(C.45:22A-21 et seq.) and any additional regulations which may be necessary to
effectuate the provisions of P.L.����� , c.����� (C.������� ) (pending before
the Legislature as this bill), in accordance with the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).� The bureau may
adopt in its entirety or incorporate by reference selected regulations
previously promulgated to effectuate �The Planned Real Estate Development Full
Disclosure Act, P.L.1977, c.419 (C.45:22A-21 et seq.).� The
bureau shall develop the forms and procedures for the streamlined submission
and expedited review process required under P.L.����� , c.���� (C.������ )
(pending before the Legislature as this bill), and adopt regulations therefor,
within 120 days of the enactment of P.L.����� ,
c. (C. )
(pending before the Legislature as this bill).

���� c.���� (1)� The bureau shall
be headed by an attorney-at-law of the State of New Jersey.

���� (2)�� The bureau shall
administer the law in a manner that at all times provides protection to
prospective purchasers through clear and understandable disclosures, of the
rights of purchasers and owners of homes within shared ownership communities in
all phases of the home-buying process.

���� 26.� (New section)� a.�
Notwithstanding any municipal ordinance to the contrary, a municipality shall
not require a developer of a planned real estate development as that term is
defined in section 3 of P.L.1977, c.419 (C.45:22A-23), by ordinance or
otherwise, to form a homeowners� association, if the common elements in the
community will consist solely of unimproved, unencumbered open space, unless
such an association is required to be formed pursuant to section 1 of P.L.1993,
c.30 (C.45:22A-43).

���� b.��� A municipality shall not
require a developer of a planned real estate development to construct certain
of the common elements prior to the construction of other elements of the
community, common or otherwise; provided, however, that a municipality may prioritize
the construction of roads or require such other contributions as allowed
pursuant to the �Municipal Land Use Law,� P.L.1975, c.291 (C.40:55D-1 et seq.).

���� 27.� Section 3 of P.L.1989,
c.9 (C.2A:62A-14) is amended to read as follows:

���� 3.��� a.� No bylaws shall be
amended in accordance with section 2 of
[
this
act
]

P.L.1989,
c.9
unless the amendment is approved by the owners of at least two-thirds
of the units held by unit owners other than the developer in the qualified
common interest community.

���� b.���
[
Bylaws
]

Certain
bylaw provisions which limit the liability of an association in any civil
action brought by or on behalf of a unit owner to respond in damages as a
result of bodily injury to the unit owner occurring on the premises of the
qualified common interest community which were
adopted in accordance with
section 2 of
[
this
act
]

P.L.1989,
c.9
shall apply to actions for injuries sustained on or after the operative
date of the bylaws
and shall expire on the 91st day next following enactment
of P.L. , c. (C. ) (pending
before the Legislature as this bill); provided, however, that such bylaws may
readopted and approved by two-thirds of the current members of the association
other than the developer.� Any such bylaws readopted shall expire annually
unless readopted and approved annually by at least two-thirds of members of the
association eligible to vote
.

(cf: P.L.1989, c.9, s.3)

���� 28.� Section 1 of P.L.1989,
c.299 (C.40:67-23.2) is amended to read as follows:

���� 1.��� For the purposes of this
act:

���� a.���� "Condominium"
means the form of real property ownership provided for under the
"Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.);

���� b.��� "Cooperative"
means a housing corporation or association wherein the holder of a share or
membership interest in the corporation or association is entitled to possess
and occupy, for dwelling purposes, a house, apartment, or other unit of housing
owned by the corporation or association, or to purchase a unit of housing
constructed or erected by the corporation or association;

���� c.���� "Fee simple
community" means a private community which consists of individually owned
lots or units and provides for common or shared elements or interests in real
property;�

���� d.��� "Horizontal
property regime" means the form of real property ownership provided for
under the "Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et
seq.);

���� e.���� "Qualified private
community" means a residential condominium, cooperative, fee simple
community,
[
or
]
horizontal
property regime,
or a shared ownership community, provided that no community
shall be deemed a qualified private community if its association has not
registered with the Commission on Shared Ownership Communities as required pursuant
to P.L. , c. � (C. )
(pending before the Legislature as this bill),
the residents of which do
not receive any tax abatement or tax exemption related to its construction,
comprised of a community trust or other trust device, condominium association,
homeowners' association, or council of co owners, wherein the cost of maintaining
roads and streets and providing essential services is paid for by a
not-for-profit entity consisting exclusively of unit owners within the
community.� No apartment building or garden apartment complex owned by an
individual or entity that receives monthly rental payments from tenants who
occupy the premises shall be considered a qualified private community.� No
"proprietary campground facility," as defined in section 1 of
P.L.1993, c.258 (C.45:22A-49), shall be considered to be a qualified private
community.

(cf: P.L.1993, c.258, s.10)

���� 29.� 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
, except that after the effective
date of P.L.�� ��, c. ����(C.���� ) all references to the commissioner shall
mean the Chief of the Bureau of Homebuyers Protection established pursuant to
that act
.

���� 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)
]

in a community containing
such common elements and facilities
.

���� o.��� "Executive
board"
or governing board
means the
[
executive
]
board
elected
by the members
of an association,
[
as
provided for
]

in accordance with

[
section
]

sections

3
and 5
of P.L.1993, c.30 (C.45:22A- 45)
and (C.45:22A-47) and P.L. , c. (C. ) (pending
before the Legislature as this bill)
.

���� 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.���� �Chief� means the Chief
of the Bureau of Homebuyers Protection in the Department of Law and Public
Safety, established pursuant to section 25 of P.L.��� ��, c. ����(C.� ������)
(pending before the Legislature as this bill).

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

���� 30.� Section 4 of P.L.1977,
c.419 (C.45:22A-24) is amended to read as follows:

���� 4.���
[
This act
]

On and after
the effective date of P.L. � , c. �
(C. ) (pending before the Legislature
as this bill), P.L.1977, c.419
shall be administered by the
[
Division of
Housing and Development in the State Department of Community Affairs
]

Bureau of Homebuyers
Protection in the Division of Consumer Affairs in the Department of Law and
Public Safety, established pursuant to section 25 of P.L.� ���, c.� ���(C.� �������)
(pending before the Legislature as this bill)
, hereinafter referred to as
the "agency."�

(cf: P.L.1993, c.258, s.9)

���� 31.��� Section 5 of P.L.1977,
c.419 (C.45:22A-25) is amended to read as follows:

���� 5.��� a.� Unless the method of
disposition is adopted for purposes of evasion, the provision of this act shall
not apply to offers or dispositions:

���� (1)�� By an owner for his own
account in a single or isolated transaction;

���� (2)�� Wholly for industrial,
commercial, or other nonresidential purposes;

���� (3)�� Pursuant to court order;

���� (4)�� By the United States, by this State or any of its agencies or political subdivisions;

���� (5)�� Of real property located
without the State;

���� (6)�� Of cemetery lots or
interests;

���� (7)��
[
Of less than
100 lots, parcels, units or interests; provided, however,� that with respect to
condominiums and cooperatives, this exemption shall not� apply, irrespective of
the number of lots, parcels, units, or interests offered or disposed of
]

(Deleted
by amendment, P.L.�� ��, c. ����(C.� �������) (pending before the Legislature
as this bill)
;

���� (8)��
[
Of
developments where the common elements or interests, which would otherwise
subject the offering to this act, are limited to the provision of unimproved,
unencumbered open space
]

(Deleted by amendment, P.L. ���, c.�� ��(C.� �����) (pending before the
Legislature as this bill)
;

���� (9)�� In a development
composed wholly of rental units, where the relationship created is one of
landlord and tenant ;

���� (10)��� Of any form of
timesharing.

���� b.��� The agency may from time
to time, pursuant to its rules and regulations, exempt from
[
any of the
provisions
]

the registration fees, in part, or from certain detailed disclosure
requirements
of
[
this
act
]

P.L.1977,
c.419,
any development, or any lots, units, parcels, or interests in a
development, if it finds that the enforcement of
[
this act
]

P.L.1977,
c.419
with respect to such
[
,
is not necessary in the public interest or required for the protection of
purchasers by reason of the small amount of the purchase price involved,
]

will not
be impacted by such reduced fees or streamlined reporting requirements.� No
registration fees shall be charged in connection with units reserved for
occupancy by low or moderate income households.� Reduced registration fees may
be permitted when
the limited character of the offering, or the limited
nature of the common or shared elements
weighs in favor of such fee
reduction
.

(cf: P.L.2006, c.63, s.40)

���� 32.��� Section 6 of P.L.1977,
c.419 (C.45:22A-26) is amended to read as follows:

���� 6.��� a.� Unless otherwise
exempted:

���� (1)�� No developer may offer
or dispose of any interest in a planned real estate development, prior to the
registration of such development with the agency.

���� (2)�� No developer may dispose
of any lot, parcel, unit, or interest in a planned real estate development,
unless he: delivers to the purchaser a current public offering statement, on or
before the
date

the
contract
[
date
of such disposition
]

is signed
.

���� b.��� Any contract or
agreement for the purchase of any parcel, lot, unit, or interest in a planned
real estate development may be canceled without cause by the purchaser by
sending or delivering written notice of cancellation by midnight
of the seventh calendar day following the day on which the purchaser has
executed such contract or agreement.� Every such contract or agreement shall
contain, in writing, the following notice in 10-point bold type or larger,
directly above the space provided for the signature of the purchaser:

���� "NOTICE TO THE PURCHASER:
you have the right to cancel this contract by sending or delivering written
notice of cancellation to the developer by midnight of the seventh calendar day
following the day on which it was executed.� Such cancellation is without
penalty, and any deposit made by you shall be promptly refunded in its
entirety."

���� c.���� Notice as required in
subsection b. shall, in addition to all other requirements, be conspicuously
located and simply stated in the public offering statement.

���� d.��� The developer shall make
copies of the public offering statement freely available to prospective
purchasers prior to the contract date of disposition.

���� e.���� The developer shall
make copies of any written report or document prepared pursuant to sections 3
or 9 of P.L.2023, c.214 (C.52:27D-132.4 or 45:22A-43.1) available to
prospective purchasers prior to the contract date of disposition.

(cf: P.L.2023, c.214, s.5)

���� 33.� Section 7 of P.L.1977,
c.419 (C.45:22A-27) is amended to read as follows:

���� 7.��� a.� The application for
registration of the development shall be filed as prescribed by the agency's
rules and shall contain the following documents and information:

���� (1)�� An irrevocable
appointment of the agency to receive service of any lawful process in any
noncriminal proceeding arising under this act against the developer or his
agents;�

���� (2)�� The states or other
jurisdictions, including the federal government, in which an application for
registration or similar documents have been filed, and any adverse order,
judgment or decree entered in connection with the development by the regulatory
authorities in each jurisdiction or by any court;�

���� (3)�� The name, address, and
principal occupation for the past five years of every officer of the applicant
or person occupying a similar status, or performing similar management
functions; the extent and nature of his interest in the applicant or the
development as of a specified date within 30 days of the filing of the
application;�

���� (4)�� Copies of its articles
of incorporation, with all amendments thereto, if the developer is a
corporation; copies of all instruments by which the trust is created or
declared, if the developer is a trust; copies of its articles of partnership or
association and all other papers pertaining to its organization, if the
developer is a partnership, unincorporated association, joint stock company, or
any other form of organization; and if the purported holder of legal title is a
person other than the developer, copies of the above documents from such
person;�

���� (5)�� A legal description of
the lands offered for registration, together with a map showing the subdivision
proposed or made, and the dimensions of the lots, parcels, units, or interests,
as available, and the relation of such lands to existing streets, roads, and
other improvements;�

���� (6)�� Copies of the deed or
other instrument establishing title to the subdivision in the developer, and a
statement in a form acceptable to the agency of the condition of the title to
the land comprising the development, including encumbrances as of a specified
date within 30 days of the date of application by a title opinion of a licensed
attorney, or by other evidence of title acceptable to the agency;�

���� (7)�� Copies of the instrument
which will be delivered to a purchaser to evidence his interest in the
development, and of the contracts and other agreements which a purchaser will
be required to agree to or sign;�

���� (8)�� Copies of any management
agreements, service contracts, or other contracts or agreements affecting the
use, maintenance or access of all or a part of the development;�

���� (9)�� A statement of the
zoning and other government regulations affecting the use of the development
including the site plans and building permits and their status, and also of any
existing tax and existing or proposed special taxes or assessments which affect
the development; and a statement of the existing use of adjoining lands;�

���� (10)��� A statement that the
lots, parcels, units or interests in the development will be offered to the
public, and that responses to applications will be made without regard to
marital status, sex, race, creed, or national origin;�

���� (11)��� A statement of the
present condition of access to the development, the existence of any unusual
conditions relating to noise or safety, which affect the development and are
known to the developer, the availability of sewage disposal facilities and
other public utilities including water, electricity, gas, and telephone
facilities in the development to nearby municipalities, and the nature of any
improvements to be installed by the developer and his estimated schedule for
completion;�

���� (12)��� In the case of any
conversion an engineering survey shall be required, which shall include
mechanical, structural, electrical and engineering reports to disclose the
condition of the building;�

���� (13)��� In the case of any
development or portion thereof against which there exists a blanket
encumbrance, a statement of the consequences for an individual purchaser of a
failure, by the person or persons bound, to fulfill obligations under the
instrument or instruments creating such encumbrances and the steps, if any,
taken to protect the purchaser in such eventuality;�

���� (14)��� A narrative
description of the promotional plan for the disposition of the lots, parcels,
units or interests in the development, together with copies of all advertising
material which has been prepared for public distribution, and an indication of
their means of communication;�

���� (15)��� The proposed public
offering statement;

���� (16)��� A current financial
statement, which shall include such information concerning the developer as the
agency deems to be pertinent, including but not limited to, a profit and loss
statement certified by an independent public accountant and information concerning
any adjudication of bankruptcy during the last five years against the
developer, or any principal owning more than 10% of the interest in the
development at the time of filing, provided, however, that this shall not
extend to limited partners, or others whose interests are solely those of
investors;�

���� (17)��� Copies of instruments
creating easements or other restrictions;

���� (18)��� A statement of the
status of compliance with the requirements of all laws, ordinances,
regulations, and other requirements of governmental agencies having
jurisdiction over the premises;�

���� (19)��� Such other
information, documentation, or certification as the agency deems necessary in
furtherance of the protective purposes of this act.

���� b.��� The information
contained in any application for registration and copies thereof, shall be made
available to interested parties at a reasonable charge and under such
regulations as the agency may prescribe.�

���� c.���� A developer may
register additional property pursuant to the same common promotional plan as
those previously registered by submitting another application, providing such
additional information as may be necessary to register the additional lots,
parcels, units or interests, which shall be known as a consolidated filing.�

���� d.��� The developer shall
immediately report any material changes in the information contained in an
application for registration.� The term "material changes" shall be
further defined by the agency in its regulations.�

���� e.���� The application shall
be accompanied by a fee in an amount equal to
[
$500.00
plus $35.00 per lot, parcel, unit, or interest contained in the application,
which fees may be used by the agency to partially defray the cost of rendering
services under the act.� If the fees are insufficient to defray the cost of
rendering services under P.L.1977, c.419 (C.45:22A-21 et seq.), the agency
shall, by regulation, establish a revised fee schedule.� The revised fee
schedule shall assure that the fees collected reasonably cover but do not
exceed the expenses and administration of implementing P.L.1977, c.419
(C.45:22A-21 et seq.)
]

: the value of each dwelling unit proposed to be built as that value will be
stated for the purposes of the New Home Warranty Program, or the proposed sales
price of that dwelling unit if the warranty value is undeterminable, multiplied
by three hundredths of one percent (.0003).� All fees collected by the agency shall
be forwarded to the State Treasurer and thereafter maintained in a separate,
non-lapsing account, to be used solely for the purposes of defraying the State costs
of rendering services and protections to homebuyers and homeowners in shared
ownership communities, as required to be provided under P.L.��� �, c.� ���(C.� ������)
(pending before the Legislature as this bill), and �The Planned Real Estate
Development Full Disclosure Act,� P.L.1977, c.419 (C.45:22A-21 et seq.), including
the supplement to that act, P.L.1993, c.30 (C.45:22A-43 et seq.).� The Bureau
of� Homebuyers Protection in the Division of Consumer Affairs of the Department
of Law and Public Safety, and the Commission on Shared Ownership Communities
shall be authorized to be reimbursed from the account required to be
established pursuant to this section by the State Treasurer.

����
If the agency determines, upon
a review that shall be undertaken upon the cessation of developer control of
the association pursuant to section 5 of P.L.1993, c.30 (C.45:22A-47), that the
estimated average sales price per housing unit used to calculate the fees
varied by more than one percent from the actual average sales price of all
housing units, the agency shall collect from or remit to the developer the
difference between the two calculations
.

���� f.���� (1)� An engineering
study required pursuant to paragraph (12) of subsection a. of this section
shall be conducted, and the results thereof certified, by a person licensed in
this State as a professional engineer pursuant to P.L.1938, c.342 (C.45:8-27 et seq.).

���� (2)�� The engineer who
prepares the survey shall certify to the agency whether, in his judgment, the
building is in compliance with the code standards adopted under the "Hotel
and Multiple Dwelling Law," P.L.1967, c.76 (C.55:13A-1 et seq.) and the "Uniform
Fire Safety Act," P.L.1983, c.383 (C.52:27D-192 et seq.) and shall list
all outstanding violations then existing in accordance with his observation and
judgment.� The engineer shall be immune from tort liability with regard to such
certification and list in the same manner and to the same extent as if he were
a public employee protected by the "New Jersey Tort Claims Act,"
N.J.S.59:1-1 et seq.�

���� (3)�� If the agency finds
there is a significant discrepancy between the engineering survey submitted by
the applicant and an engineering survey submitted by any tenant or tenants
currently residing in the building, the agency shall investigate the matter in
order to determine the true state of facts prior to approving the application.�
The agency may use its own staff or contract with independent professionals,
and may conduct hearings in accordance with the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.).� Any cost to the agency of
hiring independent professionals shall be borne by the applicant developer at
the discretion of the agency.�

(cf: P.L.1991, c.509, s.21)

���� 34.� Section 8 of P.L.1977,
c.419 (C.45:22A-28) is amended to read as follows:

���� 8.��� a.���� A public offering
statement shall disclose fully and accurately the characteristics of the
development
, the nature and extent of shared property ownership interests
and obligations for those interests,
and the lots, parcels, units, or
interests therein offered, and shall make known to prospective purchasers all
unusual or material circumstances or features affecting the development.� The
proposed public offering statement submitted to the agency shall be in a form
prescribed by its rules and regulations and shall include the following:�

���� (1)�� The name and principal
address of the developer;

���� (2)�� A general narrative
description of the development stating the total number of lots, units,
parcels, or interests in the offering, and the total number of such interests
planned to be sold, leased or otherwise transferred;

���� (3)�� Copies of any management
contract, lease of recreational areas, or similar contract or agreement
affecting the use, maintenance, or access of all or any part of the
development, with a brief and simple narrative statement of the effect of each
such agreement upon a purchaser, and a statement of the relationship, if any,
between the developer and the managing agent or firm;�

���� (4)�� (a)� The significant
terms of any encumbrances, easements, liens, and restrictions, including zoning
and other regulations, affecting such lands and each unit, lot, parcel, or
interest, and a statement of all existing taxes and existing or proposed special
taxes or assessments which affect such lands; and

���� (b)�� In the case of a
conversion subject to the provisions of the "Tenant Protection Act of
1992," P.L.1991, c.509 (C.2A:18-61.40 et al.), the
information required pursuant to section 14 of P.L.1991, c.509
(C.2A:18-61.53);�

���� (5)�� (a)� Relevant community
information, including hospitals, health and recreational facilities of any
kind, streets, water supply, levees, drainage control systems, irrigation
systems, sewage disposal facilities and customary utilities; and�

���� (b)�� The estimated cost,
size, date of completion, and responsibility for construction and maintenance
of existing and proposed amenities which are referred to in connection with the
offering or disposition of any interest in the subdivision or subdivided lands;�

���� (6)�� A copy of the proposed
budget for the operation and maintenance of the common or shared elements or
interests;�

���� (7)�� Additional information
required by the agency to assure full and fair disclosure to prospective
purchasers.�

���� b.��� The public offering
statement shall not be used for any promotional purposes before registration of
the development and afterwards only if it is used in its entirety.� No person
may advertise or represent that the agency approves or recommends the development
or dispositions therein.� No portion of the public offering statement may be
underscored, italicized, or printed in larger or heavier or different color
type than the remainder of the statement, unless the agency requires or permits
it.�

���� c.���� The agency may require
the developer to alter or amend the proposed public offering statement in order
to assure full and fair disclosure to prospective purchasers, and no change in
the substance of the promotional plan or plan of disposition or development of
a planned real estate development may be made after registration without the
approval of the agency.� A public offering statement shall not be current
unless all amendments have been incorporated.�

���� d.��� The public offering
statement shall, to the extent possible, combine simplicity and accuracy of
information, in order to facilitate purchaser understanding of the totality of
rights, privileges, obligations and restrictions, comprehended under the proposed
plan of development.� In reviewing such public offering statement, the agency
shall pay close attention to the requirements of this subsection, and shall use
its discretion to require revision of a public offering statement which is
unnecessarily complex, confusing, or is illegible by reason of type size or
otherwise.

����
e.���� On or after the
effective date of P.L.�� ���, c.� ���(C.������ ) (pending before the
Legislature as this bill), the agency shall review its processes for submission
of the public offering statement, and shall develop a streamlined process for
form submission and expedited review, in accordance with the purposes of P.L. �
, c. ��� (C. )
(pending before the Legislature as this bill).� The process shall rely on
electronic media submission to the extent practicable, which submission shall
have text-searchable properties, and be in a format deemed acceptable by the
agency.� Salient information shall be indexed, and an executive summary of the
salient information contained in the public offering statement, in plain
language, shall be placed at the front of the document, including a summary of
the rights, liabilities, obligations, and governing form applicable to the
association.

(cf: P.L.1991, c.509, s.22)

���� 35.� Section 10 of P.L.1977,
c.419 (C.45:22A-30) is amended to read as follows:

���� 10.� a.� Upon receipt of the
application for registration in proper form, and accompanied by proper fee, the
agency shall, within 10 business days, issue a notice of filing to the
applicant.� Within
[
90
]

45

days from the date of the notice of filing, the agency shall enter an order
registering the development or rejecting the registration
, provided that the
expedited method of submission has been initiated by the agency and complied
with in all aspects by the developer; otherwise the agency shall enter an order
registering the development or rejecting the registration within 90 days
.�
If no order of rejection is entered within
45 or
90 days
,
respectively,
from the date of notice of filing, the development shall be
deemed registered unless the applicant has consented in writing to a delay.

���� b.��� If the agency
affirmatively determines that the requirements of section 9 of
[
this act
]

P.L.1977,
c.419 (C.45:22A-29)
have been met, it shall enter an order registering the
development.

���� c.���� If the agency
determines upon inquiry and examination that any of the requirements of section
9 of
[
this
act
]

P.L.1977,
c.419 (C.45:22A-29)
have not been met, the agency shall notify the
applicant that the application for registration must be corrected in such
particulars, within 30 days, as designated by the agency. If the requirements
are not met within the time allowed, the agency may enter an order rejecting
the registration which shall include the findings of fact upon which the order
is based.� The order rejecting the registration shall not become effective
until 20 days after the lapse of the aforesaid specified period during which
20-day period the applicant may petition for reconsideration and shall be
entitled to a hearing.� Such order of rejection shall not take effect, in any
event, until such time as the hearing, once requested, has been given to the
applicant.

(cf: P.L.1977, c.419, s.10)

���� 36.� Section 1 of P.L.1993,
c.30 (C.45:22A-43) is amended to read as follows:

���� 1.� a.�
[
A
]

Unless
exempted as provided in this section, a
developer
of a planned
development, whether or not
subject to the registration requirements of
section 6 of P.L.1977, c.419 (C.45:22A-26) shall organize or cause to be
organized an association whose obligation it shall be to manage the common
elements and facilities.�
The developer may be exempted from forming an
association upon a determination by the agency that there will be no expenses
in connection with maintenance of the proposed common property in the
community, and all such common property consists solely of unimproved and
unencumbered open space.
� The association shall be formed on or before the
filing of the master deed or declaration of covenants and restrictions, and may
be formed as a for-profit
corporation only if the development will be a
cooperative housing cooperation issuing shares,
or
a
nonprofit
corporation
[
,
unincorporated association, or any other form permitted by law
]

if a
condominium or planned development
.� The application of P.L.1993, c.30
(C.45:22A-43 et seq.) to the association of an existing planned real estate
development shall not be limited by:

���� (1)�� whether the developer
has been subject to, or exempted from, the registration requirements of section
6 of P.L.1977, c.419 (C.45:22A-26); or

���� (2)�� the development's date
of establishment.

���� b.��� Nothing in subsection a.
of this section shall be construed to require the registration of a planned
real estate development that is not otherwise required to register pursuant to
section 6 of P.L.1977, c.419 (C.45:22A-26).

���� c.���� Membership in the
association of a planned real estate development shall be comprised of each
owner within the planned real estate development, and may include the developer
if the development contains unsold lots, parcels, units, or interests.� An
association may permit tenant participation in executive board elections,
tenant membership in the association, or both.� A voting-eligible tenant shall
have only the same voting rights as the owner of the unit that the tenant
leases, and such voting rights shall be in place of and not in addition to the
rights of the owner of the leased unit, except as permitted under paragraph (9)
of subsection c. of section 6 of P.L.2017, c.106 (C.45:22A-45.2).� Pursuant to
paragraph (9) of subsection c. of section 6 of P.L.2017, c.106 (C.45:22A-45.2),
the votes associated with a unit shall not be altered by the participation of
voting-eligible tenants.

(cf: P.L.2017, c.106, s.4)

���� 37.� Section 2 of P.L.1993,
c.30 (C.45:22A-44) is amended to read as follows:

���� 2.��� a.� Subject to the
master deed, declaration of covenants and restrictions or other instruments of
creation,
[
the
]

an

association
as that term is defined under section 3 of P.L.�� ��, c. ����(C.�
�����) (pending before the Legislature as this bill),
may do all that it is
legally entitled to do under the laws applicable to its form of organization.�
In
addition, an association of a shared ownership community shall have the
identical powers and obligations to those as set forth in section 15 of P.L.1969,
c.257 (C.46:8B-15) for condominium associations.

���� b.���
[
The
]

An

association shall exercise its powers and discharge its functions in a manner
that protects and furthers the health, safety and general welfare of the
residents of the community.�
The actions of an association concerning
governance of its members shall embody standards of due process, open
governance, democracy, and fundamental fairness, similar to those to which
governmental bodies are held, in all areas of governance, including, but not
limited to elections, access to records, open meetings, and alternate dispute
resolution, and shall be judged under these standards.

����
Actions of associations in
matters not concerning governance over its members shall be subject to the business
judgment rule, but implemented in a manner that protects and furthers the
health, safety and general welfare of the residents of the community.

���� c.����
[
The
]

An

association shall provide a fair and efficient procedure for the resolution of
disputes between individual unit owners and the association, and between unit
owners, which shall be readily available as an alternative to litigation.�
Any
costs of any procedure provided shall be borne as a common expense by all of
the members of the association, and not assessed against any individual owner
or owners.

���� d.��� The association may
assert tort claims concerning the common elements and facilities of the
development as if the claims were asserted directly by the unit owners
individually.�

(cf: P.L.1993, c.30, s.2)

���� 38.� 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
]

An
association
[
organized
pursuant to section 1 of P.L.1993, c.30 (C.45:22A-43)
]

as defined pursuant to
section 3 of P.L. �����, c.� ����(C.������ ) (pending before the Legislature as
this bill)
shall provide for the election of
[
an executive
]

a
governing
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.�
All
members of the association shall be permitted to be nominated for and run for
elected positions on the governing board.� Elections shall be held at least
every two years, and shall be conducted with strict adherence to democratic
principles and fairness.� If an association has had no election which complies
with the provisions of this section before the effective date of P.L.��� ��, c.
����(C.������ ) (pending before the Legislature as this bill), other than the
initial election required pursuant to section 5 of P.L.1993. c.30
(C.45:22A-47), then an election shall be held, to be monitored by the
Commission on Shared Ownership Communities, and in accordance with regulations
to be promulgated under P.L.�� ���, c.� ���(C. �������) (pending before the
Legislature as this bill).

���� 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
]

a
governing
board may act in all instances on behalf of the association.�

���� c.���� The members of
[
the executive
]

a
governing
board appointed by the developer shall be liable as fiduciaries
to the owners for their acts or omissions.�

���� d.��� During control of
[
the executive
]

a
governing
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)

���� 39.� Section 4 of P.L.1993,
c.30 (C.45:22A-46) is amended to read as follows:

���� 4.��� The bylaws of the
association, which shall initially be recorded with the master deed shall
include, in addition to any other lawful provisions, the following:�

���� a.���� A requirement that all
meetings of the
[
executive
]

governing

board
[
,
except conference or working sessions at which no binding votes are to be
taken,
]

shall be open to attendance by all unit owners, and adequate notice of any such
meeting shall be given to all unit owners in such manner as the bylaws shall
prescribe; except that the
[
executive
]

governing

board may exclude or restrict attendance at those meetings, or portions of
meetings, dealing with� (1) any matter the disclosure of which would constitute
an unwarranted invasion of individual privacy; (2) any pending or anticipated
litigation or contract negotiations; (3) any matters falling within the
attorney-client privilege, to the extent that confidentiality is required in
order for the attorney to exercise his ethical duties as a lawyer, or (4) any
matter involving the employment, promotion, discipline or dismissal of a
specific officer or employee of the association.� At each meeting required
under this subsection to be open to all association members, and
voting-eligible tenants where applicable, the participation of unit
owners,

association members and voting eligible-tenants in the proceedings or the
provision of a public comment session shall be
[
at the discretion of the
executive board
]

permitted, but may be limited in duration in accordance with regulations
which may be promulgated by the Commission on Shared Ownership Communities
,
minutes of the proceedings shall be taken, and copies of those minutes shall be
made available to all unit owners before the next open meeting
, or within 60
days, whichever is sooner, or shall be in accordance with any regulations
promulgated by the Commission on Shared Ownership Communities
.

���� b.��� The method of calling
meetings of association members, and voting-eligible tenants where applicable,
the percentage of association members, and voting-eligible tenants where
applicable, or voting rights required to make decisions and to constitute a
quorum.� The bylaws may, nevertheless, provide that an individual association
member, and a voting-eligible tenant where applicable, may waive notice of
meetings in writing, or may act by written agreement without meetings.

���� c.���� The manner of
collecting from unit owners their respective shares of common expenses and the
method of distribution to the unit owners of their respective shares of common
surplus or such other application of common surplus as may be duly authorized
by the bylaws.�

���� d.��� (1) The method by which
the bylaws may be amended, provided that no amendment shall be effective until
recorded in the same office as the then existing bylaws.� The bylaws may also
provide a method for the adoption, amendment and enforcement of reasonable
administrative rules and regulations relating to the operation, use,
maintenance and enjoyment of the units and of the common elements, including
limited common elements.�

���� (2)�� If association bylaws
provide for no method of their amendment by a vote of the association members
open to all association members, or only allow association members to amend the
bylaws through a majority vote exceeding a two-thirds majority, then the association
members may amend the bylaws by an affirmative vote of a majority of the total
authorized votes in the association.� If the bylaws do not provide for a method
by which the association members may call a meeting of the association members
to conduct a vote to amend the bylaws or do not contain provisions concerning
the subject matter of subparagraphs (a) through (f) of this paragraph, then a
vote concerning an amendment to the bylaws shall be conducted as follows:

���� (a)�� fifteen percent of the
association members may request a meeting of the association's membership by
executing a document requesting that a special meeting of the association
membership be held, or if the annual meeting of the association membership is
scheduled to occur within 60 days of the date of the request, then the
amendment vote shall be held at the annual meeting;

���� (b)�� if the vote is not
scheduled to take place at the annual meeting of the association, the executive
board shall schedule the special meeting of the association membership to occur
within 60 days of the receipt of the request.� Notice of the meeting shall be
provided to the association members and voting-eligible tenants, where
applicable, at least 14 days prior to the date of the meeting.� The special
meeting shall be held at a reasonable time that is likely to permit most
association members to attend;

���� (c)�� the language of the
proposed amendment shall be unambiguous and consistent with applicable law and
with the provisions of the bylaws that are not proposed to be amended, and if
not in such condition shall be revised to satisfy that requirement.� Upon satisfaction
of this requirement, the amendment shall be mailed, hand-delivered or, if the
bylaws permit, electronically delivered, together with the notice of the
meeting to the association membership at least 10 days prior to the meeting;

���� (d)�� if permitted by the
association's bylaws, the notice of the meeting shall include a proxy ballot or
absentee ballot with instructions for the return of same, which instructions
shall permit facsimile or electronic mail delivery of the proxy ballot or absentee
ballot to the association and shall not require receipt of the proxy or
absentee ballot more than one business day prior to the meeting;

���� (e)�� if a sufficient number
of ballots or proxies are not received at the special or annual meeting to
conclusively determine that the proposed amendment has been approved or
rejected, the meeting shall be adjourned for a period of 30 days, or such
longer period as approved by the association membership by approval of a motion
to extend the vote concerning the amendment, but in no event for longer than 11
months from when the notice of the meeting was sent, and all proxies or ballots
received prior to the extended date shall remain valid if otherwise valid under
the terms of the bylaws; and

���� (f)�� when an amendment is
approved, a copy of the approved amendment shall be provided to all association
members, and the association shall promptly record the� amendment in the county
recording office where the bylaws were recorded.

���� (3)�� Paragraph (2) of this
subsection shall not be construed to require a vote to be held on an amendment
to the bylaws that has been voted on in the preceding 12 months of the initial
meeting request, made pursuant to subparagraph (a) of paragraph (2) of this
subsection.�

���� (4)�� For the purposes of
paragraph (2) of this subsection, the number of total authorized votes in the
association shall be based on the whole number of units owned by someone
entitled to association membership� after subtracting those� association
members who are ineligible to vote because they are not in good standing.�

���� (5)�� An executive board shall
not amend the bylaws of an association without a vote of the association
members open to all association members, as provided in the association's
bylaws, or where the bylaws provide for no method of their amendment by a vote
of the association members, or only allow association members to amend the
bylaws through a majority vote exceeding a two-thirds majority, then an
association shall only amend the bylaws pursuant to paragraph (2) of this
subsection, except an executive board may amend the bylaws under the following
circumstances:

���� (a)�� to the extent necessary
to render the bylaws consistent with State, federal or local law; or

���� (b)�� after providing notice
to all association members of the proposed amendment, which notice shall
include a ballot to reject the proposed amendment.� Other than an amendment to
render the bylaws consistent with State, federal, or local law, if at least 10 percent
of association members vote to reject the amendment within 30 days of its
mailing, the amendment shall be deemed defeated.

����
e.���� Notwithstanding any
provision of P.L.1993, c.30 (C.45:22A-43 et seq.) to the
contrary, all bylaws and association documents of an association shall comply
with the minimum requirements of sections 16 and 18 of P.L.��� ��, c.� ���(C.������
) (pending before the Legislature as this bill) for such documents, or shall be
deemed to include such provisions by incorporation through this section.

(cf: P.L.2017, c.106, s.7)

���� 40.� Section 5 of P.L.1993,
c.30 (C.45:22A-47) is amended to read as follows:

���� 5.��� a.�
Upon the sale of
20 percent of the lots, parcels, units or interests to be created in the
community, the developer shall arrange for the members of the association to
hold an election for an owners� coordinating council, which group shall be
comprised of at least three owners other than the developer.� The council shall
be a steering committee for owners� complaints and to provide guidance to the
developer and association on issues of importance to the owners.� In addition,
the council shall coordinate the elections to the association governing board
when owners may be elected to that board in accordance with this section, and
shall serve as the owners� finance committee during the period of developer
control.� All elections to this group shall comply with election guidelines to
be promulgated by the Commission on Shared Ownership Communities established
pursuant to section 5 of P.L. �� , c. ��
(C. ) (pending before the
Legislature as this bill), provided that only members elected by the unit owners,
other than the developer or developer�s appointees to the governing board, shall
serve on the council, and the council's decisions shall be free of any control
by the developer or any member of the governing board appointed by the developer.�
Any vacancies on the council shall be filled within 30 days by current council
members, and in the case of any tie votes by such council members, by the vote
of the unit owners other than the developer within 60 days after the vacancy
occurs.

���� Irrespective of the time set
for developer control of the association provided in the master deed,
declaration of covenants and restrictions, or other instruments of creation,
control of the
voting interests of the governing board of the

association shall be surrendered to the owners in the following manner:�

���� (1)�� Sixty days after
conveyance of 25 percent of the lots, parcels, units or interests, not fewer
than 25 percent of the members of the
[
executive
]

governing

board shall be elected by the owners, and voting-eligible tenants where
applicable
, in accordance with election procedures to be promulgated by the
Commission on Shared Ownership Communities
.�

���� (2)�� Sixty days after
conveyance of 50 percent of the lots, parcels, units or interests, not fewer
than 40 percent of the members of the
[
executive
]

governing

board shall be elected by the owners, and voting-eligible tenants where
applicable.�

���� (3)�� Sixty days after
conveyance of 75 percent of the lots, parcels, units or interests, the
developer's control of the
[
executive
]

governing

board shall terminate, at which time the owners, and voting-eligible tenants
where applicable, shall elect the entire
[
executive
]

governing

board; except that the developer may retain the selection of one
[
executive
]

governing

board member
representing his interests as a unit owner
so long as there
are any units remaining unsold in the regular course of business.�
The
retention by the developer of one member on the governing board shall cease if
no units remain which are being offered for sale to the public.� Unsold units
converted to rental units by a developer shall create a presumption that the
developer has ceased selling, and in that event, any tenant of a developer-owned
unit shall be deemed to be a member of the association as if the tenant owns
the unit.

���� b.��� The percentages
specified in subsection a. of this section shall be calculated upon the basis
of the whole number of units entitled to membership in the association.� The
bylaws of the association shall specify the number or proportion of votes of
all units conveyed to owners that shall be required for the election of
executive board members.� Unless the bylaws provide for� an alternate approach
to allocating votes pursuant to paragraph (9) of subsection c. of section 6 of
P.L.2017, c.106 (C.45:22A-45.2), each unit conveyed to an owner shall be
entitled to one vote regardless of the number of association members, and
voting-eligible tenants where applicable, residing in a unit.� A developer may
surrender control of the executive board of the association before the time
specified in subsection a. of this section, if the association members, and
voting-eligible tenants where applicable, agree by a majority vote to assume
control.�

���� c.���� Upon assumption by the
owners of control of the
[
executive
]

voting
interests of the governing
board of the association, the developer shall�
deliver to the association all items and documents pertinent to the
association, such as, but not limited to, a copy of the master deed,
declaration of covenants and restrictions, documents of creation of the
association, bylaws, minute book including all minutes, any rules and
regulations, association funds and an accounting therefor, all personal
property, insurance policies, government permits, a membership roster and all
contracts and agreements relative to the association within 60 days of� that
transition date, established pursuant to this section.�
In addition, all
similar items required to be turned over by a developer of a condominium pursuant
to section 2 of P.L.1979, c.157 (C.46:8B-12.1) shall be required to be turned
over by a developer of a shared ownership community to the association.

���� d.��� The association when
controlled by the owners, and voting-eligible tenants where applicable, shall
not take any action that would be detrimental to the sale of units by the
developer, and shall continue the same level of maintenance, operation and
services as immediately prior to their assumption of control, until the last
unit is sold.�

���� e.���� From the time of
conveyance of 75 percent of the lots, parcels, units, or interests, until the
last lot, parcel, unit, or interest in the development is conveyed in the
ordinary course of business, the master deed, bylaws or declaration of
covenants and restrictions shall not require that more than 75 percent of the
votes entitled to be cast thereon be cast in the affirmative for a change in
the bylaws or regulations of the association.

���� f.���� The developer shall not
be permitted to cast any votes allocated to unsold lots, parcels, units, or
interests, in order to amend the master deed, bylaws, or any other document,
for the purpose of changing the permitted use of a lot, parcel, unit, or interest,
or for the purpose of reducing the common elements or facilities.

����
g.��� If the council of
owners authorized in subsection a. of this section is established and there has
been substantial completion of the common elements and public improvements in
any phase of the shared ownership community which are not covered by the performance
or maintenance guarantees posted with any governmental agencies having
jurisdiction, the council shall request the association to cause such common
elements and improvements to be inspected and evaluated for compliance with the
developer's warranty and construction obligations, with the assistance of
qualified independent engineering and legal consultants selected by the
council.� The fees for such consultants shall be paid from funds contributed by
the developer.

����
(1)�� Public improvements
to be dedicated to any governmental entity shall be exempt from any direct
warranty or construction defect claims by the association or the unit owners
other than the developer.� Acceptance of any such public improvements by the
governmental entity to which they are to be dedicated shall be deemed
conclusive evidence that such improvements have been satisfactorily completed
and the developer shall have no further obligation with respect to those
improvements, either to the association, to any unit owners other than the
developer, or to any governmental agency having jurisdiction.

����
(2)�� Within 120 days after
the association's receipt of any request for inspection of any phase of the
completed common elements or other improvements, the council shall require its
engineering consultant to inspect the particular completed improvements and render
a written evaluation of them to the council.� A copy of the final report,
following the council�s review of the initial evaluation, shall be furnished to
the developer within 30 days after the committee's receipt of the report.�
Thereafter, the council and the developer shall conduct one or more joint
inspections of the common elements and other improvements covered by the
request and pursue good faith negotiations to resolve any warranty or
construction defect claims against the developer.� All fees and related
expenses incurred by the council for engineering and legal consultants shall be
paid promptly by the association from available designated funds.

����
(3)�� If a settlement
agreement is finalized between the council and the developer, the
developer-controlled executive board shall have the authority to execute an
agreement and to release the declarant from all liability with respect to the
completed common elements and improvements, subject to such terms and
conditions as may be contained in the agreement.� Any such settlement agreement
and release shall be legally binding upon the association and the unit owners,
provided that its form is approved by the independent legal counsel retained by
the council on behalf of the association.

����
(4)�� If no settlement
agreement is approved by the council within 180 days after the request for
inspection, the parties shall be obligated to proceed to mediation within 30
days thereafter in accordance with section 10 of P.L.������ , c.�� ���(C.�� ���)
(pending before the Legislature as this bill).� If no settlement is reached
through mediation within 15 days after commencement of same, then the parties
shall promptly proceed to non-binding arbitration of any remaining issues in
accordance with rules promulgated by the director.� Such mediation and
non-binding arbitration shall be conditions precedent to any litigation of the
warranty and construction defect claims against the developer.� All
professional fees and expenses reasonably incurred by the association with
regard to the mediation or arbitration, or both, shall be borne by the owners,
including the developer, in the same manner as common expenses are allocated
and paid by the association promptly upon the receipt of written authorization
of the council.

����
(5)�� In the event that no
settlement agreement and releases are executed with respect to any completed
common elements or improvements during the period of developer control of the
governing board of the association, any statutes of limitation or repose applicable
to that association concerning common elements, including, but not limited to
statutory warranties, shall be extended for a period of one year after the
assumption of control of the governing board by owners other than the
developer.

����
(6)�� The procedures set
forth in this section shall also apply to and be binding upon the developer and
the association after the unit owners, other than the developer, assume control
of the governing board of the association; provided, however, that the governing
board after that transition shall not be bound by the recommendations of the
council of owners.� The governing board controlled by the owners may vote to
abolish the council of owners at any time after the owners have assumed control
of the governing board.

(cf: P.L.2017, c.106, s.8)

���� 41.� Section 6 of P.L.1993,
c.30 (C.45:22A-48) is amended to read as follows:

���� 6.��� The
[
Commissioner
of Community Affairs
]

Commission on Shared Ownership Communities
shall cause to be prepared
and distributed, for the use and guidance of associations,
[
executive
]

governing
boards
and
[
administrators
]

professionals
hired by such boards to assist them
, explanatory materials and guidelines
to assist them in achieving proper and timely compliance with the requirements
of P.L.1993, c.30 (C.45:22A-43 et al.)
and with the requirements of P.L. , c. (C. )
(pending before the Legislature as this bill)
.� Such guidelines may include
the text of model bylaw provisions suggested or recommended for adoption.

����
The commission shall also
make available, on an Internet web site maintained by it, descriptions of the
outcomes of dispute resolution procedures overseen by the commission, indexed
by subject matter.

����
The commission shall
publish a quarterly newsletter to be furnished to any member of any association
requesting it and shall also publish the newsletter electronically for viewing
on the Internet.

����
[
Failure or refusal of an
association or executive board to make proper amendment or supplementation of
its bylaws prior to the effective date of P.L.1993, c.30 (C.45:22A-43 et al.)
shall not, however, affect their obligation of compliance therewith on and
after that effective date.
]
�

Any owner or tenant of an owner in a shared ownership community may seek the
assistance of the Commission on Shared Ownership Communities pursuant to
section 6 of P.L.��� , c. ����(C.������ ) (pending before the Legislature as
this bill) to address the failure of an association to make proper amendment or
supplementation of its bylaws in order to comply with any statutory
requirements.

(cf: P.L.1993, c.30, s.6)

���� 42.� Section 14 of P.L.1979,
c.157 (C.46:8B-14) is amended to read as follows:

���� 14.� The association, acting
through its officers or governing board, shall be responsible for the
performance of the following duties, the costs of which shall be common
expenses:

���� (a)�� The maintenance, repair,
replacement, cleaning and sanitation of the common elements.

���� (b)�� The assessment and
collection of funds for common expenses and the payment thereof.

���� (c)�� The adoption,
distribution, amendment and enforcement of rules governing the use and
operation of the condominium and the condominium property and the use of the
common elements, including but not limited to the imposition of reasonable
fines, assessments and late fees upon unit owners, if authorized by the master
deed or bylaws, subject to the right of a majority of unit owners to change any
such rules.

���� (d)�� The maintenance of
insurance against loss by fire or other casualties normally covered under
broad-form fire and extended coverage insurance policies as written in this
State, covering all common elements and all structural portions of the
condominium property and the application of the proceeds of any such insurance
to restoration of such common elements and structural portions
[
if such
restoration shall otherwise be required under the provisions of this act or the
master deed or bylaws
]
.

���� (e)�� The maintenance of
insurance against liability for personal injury and death for accidents
occurring within the common elements whether limited or general and the defense
of any actions brought by reason of injury or death to person, or damage to
property occurring within such common elements and not arising by reason of any
act or negligence of any individual unit owner.

���� (f)�� The master deed or
bylaws may require the association to protect blanket mortgages, or unit owners
and their mortgagees, as their respective interest may appear, under the
policies of insurance provided under clauses (d) and (e) of this section, or
against such risks with respect to any or all units, and may permit the
assessment and collection from a unit owner of specific charges for insurance
coverage applicable to his unit.

���� (g)�� The maintenance of
[
accounting
]
records, in
accordance with generally accepted accounting principles, open to inspection at
reasonable times by unit owners.� Such records shall include:

���� (i)��� A record of all
receipts and expenditures.

���� (ii)�� An account for each
unit setting forth any shares of common expenses or other charges due, the due
dates thereof, the present balance due, and any interest in common surplus.

����
(iii)���� all items
required pursuant to section 19 of P.L. �� , c. ���
(C. ) (pending before the Legislature
as this bill).

���� (h)�� Nothing herein shall
preclude any unit owner or other person having an insurable interest from
obtaining insurance at his own expense and for his own benefit against any risk
whether or not covered by insurance maintained by the association.

���� (i)��� Such other duties as
may be set forth in the master deed or bylaws.

���� (j)��� An association shall
exercise its powers and discharge its functions in a manner that protects and
furthers or is not inconsistent with the health, safety and general welfare of
the residents of the community.

���� (k)�� An association shall
provide a fair and efficient procedure for the resolution of
[
housing-related
]
disputes
between individual unit owners and the association, and between unit owners,
which shall be readily available as an alternative to litigation.�
Any costs
associated with the procedure shall be borne by the association as a common
expense, and no costs shall be assessable against any individual owner or
owners.
� A person other than an officer of the association, a member of the
governing board or a unit owner involved in the dispute shall be made available
to resolve the dispute.�
[
A
unit owner may notify the Commissioner of Community Affairs if an association
does not comply with this subsection.� The commissioner shall have the power to
order the association to provide a fair and efficient procedure for the
resolution of disputes
]

A unit owner who has availed himself of the dispute resolution procedures
provided by his association, but who does not consider the matter resolved, may
file a request for dispute resolution services with the Commission on Shared
Ownership Communities, established pursuant to section 5 of P.L. �
, c. � (C.
) (pending before the Legislature as this bill).

(cf: P.L.1996, c.79, s.2)

���� 43.� Section 12 of P.L.1969,
c.257 (C.46:8B-12) is amended to read as follows:

���� 12.� The association provided
for by the master deed shall be responsible for the administration and
management of the condominium and condominium property, including but not
limited to the conduct of all activities
[
of
common interest to
]

on the
common property of
the unit owners.� The association may be any
entity recognized by the laws of New Jersey, including but not limited to a
business corporation or a nonprofit corporation.�
Condominium associations
established after the effective date of P.L.� ����, c. �� (C. )
(pending before the Legislature as this bill) �shall be incorporated as
nonprofit corporations.

(cf: P.L.1969, c.257, s.12)

���� 44.� Section 2 of P.L.1979,
c.157 (C.46:8B-12.1) is amended to read as follows:

���� 2.��� a.�
[
When
]

For
associations formed prior to the effective date of P.L.� �����, c.� ����(C.� ������)
(pending before the Legislature as this bill), when
unit owners other than
the developer own 25% or more of the units in a condominium that will be
operated ultimately by an association, the unit owners other than the developer
shall be entitled to elect not less than 25% of the members of the governing board
or other form of administration of the association.� Unit owners other than the
developer shall be entitled to elect not less than 40% of the members of the
governing board or other form of administration upon the conveyance of 50% of
the units in a condominium.� Unit owners other than the developer shall be
entitled to elect all of the members of the governing board or other form of
administration upon the conveyance of 75% of the units in a condominium.�
However, when some of the units of a condominium have been conveyed to
purchasers and none of the others are being constructed or offered for sale by
the developer in the ordinary course of business, the unit owners other than
the developer shall be entitled to elect all of the members of the governing board
or other form of administration.

���� Notwithstanding any of the
provisions of subsection a of this section, the developer shall be entitled to
elect at least one member of the governing board� or other form of
administration of an association as long as the developer� holds for sale in
the ordinary course of business one or more units in a� condominium operated by
the association.

���� b.��� Within 30 days after the
unit owners other than the developer are entitled to elect a member or members
of the governing board or other form of administration of an association, the
association shall call, and give not less than 20 days' nor more than 30 days'
notice of, a meeting of the unit owners to elect the members of the governing
board or other form of administration.� The meeting may be called and the
notice given by any unit owner if the association fails to do so.

���� c.���� If a developer holds
one or more units for sale in the ordinary course of business, none of the
following actions may be taken without approval in writing by the developer:

���� (1)�� Assessment of the
developer as a unit owner for capital improvements.

���� (2)�� Any action by the
association that would be detrimental to the sales of units by the developer.�
However, an increase in assessments for common expenses without discrimination
against the developer shall not be deemed to be detrimental to the sales of units.

����
On or after the after the
effective date of P.L.�� ��, c.� ���(C. �������) (pending before the
Legislature as this bill), elections for and control of a governing board of an
association shall be in accordance with section 5 of P.L.1993, c.30
(C.45:22A-47).

���� d.���
[
Prior to, or
not more than 60 days after, the time that unit owners other than the developer
elect a majority of the members of the governing board� or other form of
administration of an association, the developer shall relinquish control of the
association, and the unit owners shall accept control.� Simultaneously,
]

When
control of an association is required to be relinquished by a developer
pursuant to section 5 of P.L.1993, c.30 (C.45:22A-47),
the
developer shall deliver to the association all property of the unit owners and
of the association held or controlled by the developer, including, but not
limited to, the following items, if applicable, as to each condominium operated
by the association:

���� (1)�� A photocopy of the
master deed and all amendments thereto, certified by affidavit of the
developer, or an officer or agent of the developer, as being a complete copy of
the actual master deed.

���� (2)�� A certified copy of the
association's articles of incorporation, or if not incorporated, then copies of
the documents creating the association.

���� (3)�� A copy of the bylaws.

���� (4)�� The minute books,
including all minutes, and other books and records of the association, if any.

���� (5)�� Any house rules and
regulations which have been promulgated.

���� (6)�� Resignations of officers
and members of the governing board or other form of administration who are
required to resign because the developer is required to relinquish control of
the association.

���� (7)�� An accounting for all
association funds, including capital accounts and contributions.

���� (8)�� Association funds or
control thereof.

���� (9)�� All tangible personal
property that is property of the association, represented by the developer to
be part of the common elements or ostensibly part of the common elements, and
an inventory of that property.

���� (10) A copy of the plans and
specifications utilized in the construction or remodeling of improvements and
the supplying of equipment to the condominium and in the construction and
installation of all mechanical components serving the improvements and the
site, with a certificate in affidavit form of the developer, his agent, or an
architect or engineer authorized to practice in� this State that such plans and
specifications represent, to the best of their� knowledge and belief, the
actual plans and specifications utilized in the construction and improvement of
the condominium property and for the construction and installation of the
mechanical components serving the improvements.� If the condominium property
has been declared a condominium more than 3 years after the completion of
construction or remodeling of the improvements, the requirements of this
paragraph shall not apply.

���� (11)� Insurance policies.

���� (12) Copies of any
certificates of occupancy which may have been issued for the condominium
property.

���� (13)� Any other permits issued
by governmental bodies applicable to the condominium property in force or
issued within 1 year prior to the date the unit owners other than the developer
take control of the association.

���� (14)� All written warranties
of the contractor, subcontractors, suppliers, and manufacturers, if any, that
are still effective.

���� (15)� A roster of unit owners
and their addresses and telephone numbers, if known, as shown on the
developer's records.

���� (16)� Leases of the common
elements and other leases to which the association is a party.

���� (17)� Employment contracts,
management contracts, maintenance contracts, contracts for the supply of
equipment or materials, and service contracts in which the association is one
of the contracting parties and maintenance contracts and service contracts in
which the association or the unit owners have an obligation or responsibility,
directly or indirectly to pay some or all of the fee or charge of the person or
persons performing the service.

���� (18)� All other contracts to
which the association is a party.

(cf: P.L.1979, c.157, s.2)

���� 45.� Section 15 of P.L.1979,
c.157 (C.46:8B-15) is amended to read as follows:

���� 15.� Subject to the provisions
of the master deed, the bylaws, rules and regulations and the provisions of
this act or other applicable law, the association shall have the following
powers:

���� (a)�� Whether or not
incorporated, the association shall be an entity which shall act through its
officers and may enter into contracts, bring suit and be sued.� If the
association is not incorporated, it may be deemed to be an entity existing
pursuant to this act and a majority of the members of the governing board or of
the association, as the case may be, shall constitute a quorum for the
transaction of business.� Process may be served upon the association by serving
any officer of the association or by serving the agent designated for service
of process.� Service of process upon the association shall not constitute
service of process upon any individual unit owner.

���� (b)�� The association shall
have access to each unit from time to time during reasonable hours as may be
necessary for the maintenance, repair or replacement of any common elements
therein or accessible therefrom or for making emergency repairs necessary to prevent
damage to common elements or to any other unit or units.� The association may
charge the unit owner for the repair of any common element damaged by the unit
owner or his tenant.

���� (c)�� The association may
purchase units in the condominium and otherwise acquire, hold, lease, mortgage
and convey the same.� It may also lease or license the use of common elements
in a manner not inconsistent with the rights of unit owners.

���� (d)�� The association may
acquire or enter into agreements whereby it acquires leaseholds, memberships or
other possessory or use interests in lands or facilities including, but not
limited to country clubs, golf courses, marinas and other recreational facilities,
whether or not contiguous to the condominium property, intended to provide for
the enjoyment, recreation or other use or benefit of the unit owners.� If fully
described in the master deed or bylaws, the fees, costs and expenses of
acquiring, maintaining, operating, repairing and replacing any such
memberships, interests and facilities shall be common expenses.� If not so
described in the master deed or bylaws as originally recorded, no such
membership interest or facility shall be acquired except pursuant to amendment
of or supplement to the master deed or bylaws duly adopted as provided therein
and in this act.� In the absence of such amendment or supplement, if some but
not all unit owners desire any such acquisition and agree to assume among themselves
all costs of acquisition, maintenance, operation, repair and replacement
thereof, the association may acquire or enter into an agreement to acquire the
same as limited common elements appurtenant only to the units of those unit
owners who have agreed to bear the costs and expenses thereof.� Such costs and
expenses shall be assessed against and collected from the agreeing unit owners
in the proportions in which they share as among themselves in the common
expenses in the absence of some other unanimous agreement among themselves. No
other unit owner shall be charged with any such cost or expense; provided,
however, that nothing herein shall preclude the extension of the interests in
such limited common elements to additional unit owners by subsequent agreement
with all those unit owners then having an interest in such limited common
elements.

���� (e)�� The association may levy
and collect assessments duly made by the association for a share of common
expenses
[
or
otherwise
]
,
including any other moneys duly owed the association, upon proper notice to the
appropriate unit owner, together with interest thereon, late fees and
reasonable attorneys' fees, if authorized by the master deed or bylaws.

���� All funds collected by an
association shall be maintained separately in the association's name. For
investment purposes only, reserve funds may be commingled with operating funds
of the association. Commingled operating and reserve funds shall be accounted
for separately, and a commingled account shall not, at any time, be less than
the amount identified as reserve funds.� A manager or business entity managing
a condominium, or an agent, employee, officer, or director of an association,
shall not commingle any association funds with his or her funds or with the
funds of any other condominium association or the funds of another association
as defined in section 3 of P.L.1977, c.419 (C.45:22A-23).

����
[
If
]

Other than during the period
of developer control as set forth in section 5 of P.L.1993, c.30 (C.45:22A-47),
if
authorized by the master deed or bylaws, the association may levy and
collect a capital contribution, membership fee or other charge upon the
[
initial sale
or subsequent
]

resale of a unit, which collection shall be earmarked for the purpose of
maintenance of or improvements to common elements to defray common expenses
[
or otherwise
]
, provided
that such charge shall not exceed nine times the amount of the most recent
monthly common expense assessment for that unit.

���� (f)�� If authorized by the
master deed or bylaws, the association may impose reasonable fines upon unit
owners for failure to comply with provisions of the master deed, bylaws or
rules and regulations, subject to the following provisions:

���� A fine for a violation or a
continuing violation of the master deed, bylaws or rules and regulations shall
not exceed
[
the
maximum monetary penalty permitted to be imposed for a violation or a
continuing violation under section 19 of the "Hotel and Multiple Dwelling
Law," P.L.1967, c.76 (C.55:13A-19)
]

$50 per violation per day, or a total of $2,500 for continuing violations
.

���� On roads or streets with
respect to which Title 39 of the Revised Statutes is in effect under section 1
of P.L.1945, c.284 (C.39:5A-1), an association may not impose fines for moving
automobile violations.

���� A fine shall not be imposed
unless
the association has filed the required information with the
Commission on Shared Ownership Communities pursuant to section 10 of P.L.��� ,
c. ����(C.������ ) (pending before the Legislature as this bill) and the

unit owner is given written notice of the action taken and of the alleged basis
for the action, and is advised of the right to participate in a dispute
resolution procedure in accordance with subsection (k) of section 14 of
P.L.1969, c.257 (C.46:8B-14)
, and advised of the further right to file an appeal
with the Commission on Shared Ownership Communities
.� A unit owner who does
not believe that the dispute resolution procedure has satisfactorily resolved
the matter shall not be prevented
from seeking dispute resolution with the
Commission on Shared Ownership Communities in the manner provided under section
5 of P.L.�� ����, c. �����(C.������ ) (pending before the Legislature as this
bill), or
from seeking a judicial remedy in a court of competent
jurisdiction
, in which case the filing of a lien for any fine imposed shall
be postponed until a final determination has been made concerning the fine by
either the commission or the court
.

���� (g)�� Such other powers as may
be set forth in the master deed or bylaws, if not prohibited by P.L.1969, c.257
(C.46:8B-1 et seq.) or any other law of this State.

(cf: P.L.2007, c.165, s.1)

���� 46.� This act shall take
effect immediately.

STATEMENT

���� It has been more than 40 years
since the Legislature enacted "The Planned Real Estate Development Full
Disclosure Act," (PREDFDA), P.L.1977, c.419 (C.45:22A-21 et seq.) to
provide State oversight of the marketing of planned developments to prospective
purchasers, through a review of documents and advertisements, as well as
requiring that certain disclosures be made by a developer to a buyer.�
Marketing techniques are important because membership in a homeowner
association is mandatory for a purchaser of a home in community which has
shared property and facilities, such as a condominium, cooperative, or a single
family home in a planned development.� The shared property of such communities
is owned collectively by all of the individual home purchasers.� These
communities are referred to as �shared ownership communities� in the bill and
are often known as common interest communities.

���� It has also been more than 10
years since the Assembly Task Force to Study Homeowners� Associations released
its report containing more than 30 recommendations calling for changes in the
laws, in order to provide more protections for homeowners.� This bill addresses
most of those recommendations, as well as updating the laws requiring
disclosure by developers and clarifying the powers and obligations of governing
boards of associations and the rights of owners living in such communities.

���� The bill revises the manner in
which information should be provided prospective purchasers through the Public
Offering Statement, (POS) a document required to be provided to prospective
purchasers by developers of such communities.� Although New Jersey�s statutes
require certain disclosures by a developer during the sales phase of shared
ownership communities, these disclosures have too often been inadequate to
properly inform prospective purchasers.� Items which are likely to be of
extreme importance to a purchaser, such as obligations, governance structures,
potential future liabilities, restrictions, or, even in some cases, hidden loans
on the part of a developer to the association, may be buried deep within the
document, and not disclosed adequately, if at all.� The sheer volume of
information, which varies widely by developers on matters which could be
standardized, also hinders adequate review by the State.

���� The bill requires the POS,
and the registration of developments process, to be revised and streamlined.� A
developer will be required to submit information on standardized forms and in
an electronic format.� Governance structures will be standardized and
developers allowed to highlight variations that they wish to apply.� Processing
times for registrations of developments will be reduced under the bill from 90
to 45 days for standardized submissions.� The information in the Public
Offering Statement to be disclosed to a prospective purchaser will be revised
to be quickly accessed by the reader, as well as indexed under logical
headings, such as pets, parking, restrictions and fees.� An 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.

���� The bill also addresses the
problem that planned communities with fewer than 100 units have been exempted
from registration under the act.� This has been interpreted by the
administering agency as exempting developers from providing a POS,
thus providing no protections for purchasers in smaller communities.� The
exemption has also been extended by regulations to all low and moderate income
(
Mount Laurel
) communities of any size.� Exemption from the PREDFDA also
clouds many other issues, such as when a developer of a planned community must
turn over the assets to the homeowners.� The bill removes these exemptions, and
requires a Public Offering Statement for every prospective purchaser in a
planned community.� The regressive flat rate development charge currently
charged to developers of planned communities is replaced under the bill with a
per unit fee of 3/100 of one percent (.0003) of the sales price.� These fees
are currently required to be used to defray the costs of the State�s review
under the statute, and will continue to be used for that purpose, as well as to
offset costs for other homeowner protections added by the bill.� The change
from a flat rate fee to a per unit fee will result in lower fees on lower
priced homes, and in most instances will result in decreased fees being paid
per development than is the case now.

���� In addition, the bill
addresses problems which arise in what may be termed the �governance� stage of
a homeowners� association.� After the developer has sold at least 75 percent of
the homes planned for the community, total control of the management of the
commonly-owned property is transferred from the developer to the home owners in
the community.� Experience shows that owners are not adequately prepared for
this event.

���� The bill 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.� The bill requires the creation of an owners� coordinating council
in each association, consisting of at least three owners, during the time
period that the developer controls the voting interest of the association
governing board.� The owners� coordinating council will function as a steering
committee for owners, and serve as the election monitor when owners other than
the developer are entitled by statute to be elected as voting members of the
governing board.� In addition, the owners� council will be permitted to bring
claims to a commission formed under the bill, on matters affecting construction
deficiencies in the common elements during the period of developer control.�
The inability of owners to file warranty claims concerning defects in common
elements was found to be a problem by the State Commission of Investigation in
its report of abuses in the new home construction industry.

���� The bill addresses the
inconsistency in various statutes affecting owners� rights in different types
of shared ownership communities, by amending the laws to eliminate these
inconsistencies.

���� The bill 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 (ADR) services to these associations.� The
commission will also serve as a hearing entity concerning violations of
statutory law pertaining to associations. The commission is modeled after a
very successful program created by Montgomery County, Maryland for homeowner
associations under its jurisdiction.

���� The bill addresses a critical
need of the many owners whose associations have not provided any ADR or ADR
which is not impartial.� Many associations have adopted a process too biased or
expensive to serve as a viable alternative to litigation.� Because associations
can charge each owner the cost of the board�s attorney as a common expense,
many boards are quick to invite litigation, rather than amicably resolve
disputes.� In some instances, even when a board�s actions blatantly violate
bylaws, or are flagrantly illegal, State and local officials are often
unwilling or unable to get involved, citing the �private� nature of such
communities.� This places an undue financial burden on individual owners, many
of whom are senior citizens on fixed incomes.

���� The bill also addresses the
general lack of information about community associations, and a lack of
standards for the manner in which they may operate.� The commission created by
the bill and the State entity responsible for oversight of marketing of new
homes is charged with creating a booklet providing detailed information to
owners concerning general information, State and federal laws, resources
available, and the standards of governance established for association
governing boards.� The commission will also be responsible for posting the
information to a web site.

���� The commission is also
required under the bill to promulgate standards for transparent and democratic
governance in the operation of shared ownership communities.� The standards may
be more specific than the provisions of the bill, but must comport with the
Legislature�s intent to foster open, democratic processes in such communities.

���� The funding for the activities
of the commission and the alternative dispute resolution services will come
from fees already collected and earmarked for protections of owners under the
"The Planned Real Estate Development Full Disclosure Act."� The bill
requires that all associations provide certain information annually to the
Commission on Shared Ownership Communities.� There is no fee to file under the
bill, but those associations that do not provide the information will not be
eligible as qualified private communities to seek reimbursement from their
municipality for services provided to them, such as trash, leaf and snow
removal, and, in addition, will not be permitted to impose fines upon members,
or to receive approval to file liens based on fines imposed.

�� In order to recognize the
governmental nature of homeowners associations, and to provide the best
enforcement of statutory protections for prospective homebuyers in shared
ownership communities, the bill moves the responsibility for the �The Planned
Real Estate Development Act� to a new bureau within the Division of Consumer
Affairs in the Department of Law and Public Safety, to be known as the �Bureau
of Homebuyers Protection.�� The Division of Consumer Affairs currently has
significant experience in administering consumer protection programs; for
example it has the responsibility for overseeing the �Home Improvement
Contractor�s Registration Act� and �the consumer fraud act.�� In addition,
relocating homebuyer protections will help to minimize conflicts of interests
concerning builders under other programs in the Department of Community
Affairs, such as its role as the enforcer of construction codes, licensing of
code inspectors, and overseeing the �New Home Warranty Program.�