Issues plaguing New Jersey condominium unit owners and residents.

New Jersey is the most densely populated state in the United States. The state is home to the top four densely populated municipalities in the United States and seven of the top ten.

Population: 9,290,841 (est. 2023)

21 counties; 566 municipalities

People are fleeing NJ in record numbers due to the astronomical cost of living. (In 2019, Governor Murphy introduced the ANCHOR property tax relief program).

Mahwah Town Governance

No representation in the Administration or on any boards (i.e. planning board)

Mahwah’s nighttime population – 26,000 (more during the day with contractors; employees; delivery people)

Before condos – population approx. 10,000

20 developments –mahwahtwp.org / communities / About Mahwah / condominiums

Problem Statement

There are serious, pervasive and increasing concerns for condominium owners and residents in the State of New Jersey.

It’s been said that condominium living is like the “Wild Wild West”.

Condominium communities are seen as private communities; however, we are residents of the Town/City and pay real estate property taxes in addition to hefty monthly maintenance fees and, in some cases, multiple continuous assessments. There is no cap on these rising fees.

For years, I have asked, if not begged, for support from Mayor & Council, Senator Holly Schepsi, Assemblyman Robert Auth, Congressman Josh Gottheimer, Governor Murphy, Bergen County Prosecutor, Mahwah Police Department, Department of Community Affairs, Department of Banking and Insurance and the Attorney General.

The consistent response is they don't have jurisdiction over condominium communities. The suggestion: file a lawsuit. That isn’t the answer. We need to be proactive, not reactive.

Unit owners have no say as to how its money is spent. Conversely, as a homeowner, one can decide which landscaper to hire and which services to engage based on your budget.

There is very limited oversight:

The ARU (Association Regulations Unit) of the Bureau of Homeowner Protection in the Department of Community Affairs (DCA) enforces the provisions of the New Jersey Condominium Act and Planned Real Estate Development Full Disclosure Act (N.J.S.A. 45:22A-46a.) pertaining to the obligations of an Association to its homeowners. However, the Act limits the jurisdiction of the DCA/ARU to the following four areas:

1. Association compliance in providing its’ members access to financial records;

2. Association compliance with “Open Meeting” requirements;

3. Association compliance with the requirement to adopt and properly administer an Alternative Dispute Resolution (ADR) procedure for the resolution of disputes between owners or between owners and the Association; and

4. The ARU has limited jurisdiction relative to the enforcement of election and voting rights in common interest communities as a result of the recent amendment of the Planned Real Estate Development Full Disclosure Act (PREDFDA) (N.J.S.A. 45:22A-21 et seq.), by the passage of P.L. 2017, c. 106, which sought to enhance the voting participation rights of residents in common interest communities.

Well known resources:

§ The New York Cooperator; https://cooperatornews.com/

§ Robert’s Rules; https://robertsrules.com/

§ Radburn Regulations; https://www.nj.gov/dca/codes/codreg/pdf_regs/njac_5_26.pdf

Radburn Regulations

Effective May 18, 2020, the Department of Community Affairs (“DCA”) published new regulations for community associations to follow to implement the legislative initiatives set forth in the Radburn Amendment to the Planned Real Estate Development Full Disclosure Act. The regulations are codified in the New Jersey Administrative Code and begin at N.J.A.C 5:26-1.1. The focus of the amendment was membership voting, election procedures and bylaw amendment. As such, the most significant new regulations focus on voting and election procedure and bylaw amendment.

Abuse of Power (New York Cooperator)

Sometimes board members can just get way out into the weeds, blatantly ignoring clearly stated rules. While these transgressions may arguably provide the most engaging anecdotes, they’re also the most destructive to the fabric of a building or association community.

“You’ll see with some frequency instances where an officer or president runs the board as if it’s a one-man show,” says Wurtzel. “They’ll refuse to approve an applicant solely because they don’t like them, dismissing a board vote. Or they’ll approve contracts without proper bidding or full documentation; without backup. And of course, if they’re hiring someone’s friend as a contractor who’s not as independent as they should be, things can get even worse.”

Finding a Solution

There are a number of ways to rein in an out-of-control board member, but it's not always easy. "It's very difficult to get rid of people who are strong and trying to rule the world," says Shyman.

One approach calls for the board president to regain and then ensure strict, by-the-book conduct of all meetings. "One way to battle or contain these problems is to run your board meetings very precisely," Russell says. "Follow Robert's Rules of Order, staying with the heart of compliance It's in the absence of structure that those demanding voices try to fill the vacuum, continues Russell. "Robert's Rules were created for a reason. They allow the weaker members of a group to offer a voice along with every other member." And that's important in an organization that relies upon the intellectual and procedure."

Another way is to establish a governing authority, increase oversight of condominium associations and impose penalties for violating the rules and laws.

Analysis

Associations today are dealing with years of mismanagement, errant boards of directors; vendors who do not act in the Association’s best interest; disrespect and disregard of the By-Laws; Board’s failure to carry out their fiduciary responsibilities. Lack of arm’s length business transactions when sourcing work; favoritism; lack of knowledge; lack of transparency; and lack of communication.

Proposed Solution

· Secure engagement, support, and commitment from Township officials; legislative representatives; and county and state representatives to champion for rights and protection of condominium unit owners.

· Expand the NJ Condominium Act, which shall include penalties to Associations for acting in violation of its By-Laws and/or state laws.

Conclusion

If we don’t act now and make immediate and substantive changes to the status quo, people are at risk for losing their homes (typically one’s largest investment) because the rising costs along with the mismanagement are not sustainable for any length of time.

Thank you.