NJ LAC Year in Review

Jan 24, 2013


Laws that affect condominium and community associations in New Jersey are proposed, debated and voted on in Washington and in Trenton nearly every day. Some are passed and signed into law, and some are not. CAI's New Jersey Legislative Action Committee monitors and helps guide the progress of those bills.  This past year saw much legislative activity related to homeowner associations, on both the national and local levels. Here are the highlights:

On the national level, the federal Fair Housing Administration (FHA) adopted and announced amendments to its condominium funding approval guidelines. A few years ago, as a result of the mortgage industry collapse, FHA implemented a number of restrictions to its condominium guidelines that made it very difficult for a potential buyer of a condominium to obtain an FHA-backed mortgage. This drastically reduced the pool of potential buyers of condominium units for sale, making it that much more difficult for an owner to sell his or her unit if they needed to. These recent amendments significantly eased these previous restrictions, making it easier for a condominium association to be approved for FHA financing.

On the state level, legislators in Trenton considered several bills dealing with homeowner associations:

Manager Licensing: One bill proposes to establish a licensing board and procedure for the licensing of property managers in New Jersey under the auspices of the Department of Community Affairs. This legislation is in its formative stages but may very well be voted upon in next year’s legislative session.

Vacant / Foreclosed Property: A series of bills have been introduced to deal with the problem of vacant and foreclosed homes across the state, many of which are in homeowner associations. One would require the foreclosing lender to maintain these vacant homes during their foreclosure process. Another would establish a faster “track” for the otherwise slow foreclosure process when the foreclosed-upon property is vacant. Discussions are also ongoing to require the foreclosing lender to pay the monthly association assessments during the foreclosure process on a vacant property.

Other Issues: Other issues under review: to amend the Municipal Services Act to add services to the list of those for which homeowner associations costs are reimbursed by their municipality (currently snow removal, leaf collection, collection of recyclables and trash, and electricity for street lights; suggested additions would include water for fire hydrants, maintenance of sewage pump stations and maintenance of detention basins); to create a statutory lien for unpaid assessments in non-condominium community associations; to identify and prohibit conflicts of interest by board members or management employees; and to require municipalities to notify homeowner associations when a developer has requested a release or reduction of its performance and/or maintenance bonds on an association development project.

Discussion and action on these legislative initiatives will continue through the 2013 legislative year. Stay tuned…and stay involved. These initiatives affect you!

George Greatrex, Esq.
Shivers, Gosnay & Greatrex, LLC, Cherry Hill, NJ
CAI's NJ Legislative Action Committee


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