Bill Text: NJ A102 | 2010-2011 | Regular Session | Introduced
Bill Title: Authorizes DCA to establish bidding and conflict of interest guidelines for homeowners' associations.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-01-12 - Introduced, Referred to Assembly Housing and Local Government Committee [A102 Detail]
Download: New_Jersey-2010-A102-Introduced.html
STATE OF NEW JERSEY
214th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION
Sponsored by:
Assemblyman PETER J. BIONDI
District 16 (Morris and Somerset)
SYNOPSIS
Authorizes DCA to establish bidding and conflict of interest guidelines for homeowners' associations.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning homeowners' associations and supplementing Title 46 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares:
a. The corporate model that has been applied to homeowners' associations has proven itself inadequate in some respects for the governance of residential communities, a fact recognized by the Assembly Task Force to Study Homeowners' Associations in its 1998 report.
b. By authorizing homeowners' associations in certain planned real estate developments to exercise the power to levy fines on owners residing in the community and to impose liens in order to collect those fines, the Legislature, in effect, delegated governmental powers to private entities. Governmental powers, however, must be exercised in a way that comports with constitutional standards of fundamental fairness and due process, while promoting democratic participation and safeguarding the investment of owners in their properties.
c. The need for these standards becomes increasingly significant as residential developments with homeowners' associations continue to proliferate in New Jersey and these associations assume responsibility for providing services that would otherwise be provided by municipalities.
d. Accordingly, the Legislature finds it in the public interest that:
(1) homeowners' associations be held to standards of due process, open governance and fundamental fairness, similar to those to which governmental bodies are held;
(2) a fair and efficient system for resolving disputes between homeowners and associations be implemented; and
(3) associations should discharge their obligation to protect the health, safety and welfare of homeowners subject to the oversight of the Department of Community Affairs.
2. All terms used in P.L. , c. (C. ) (now before the Legislature as this bill) not otherwise defined shall have the same definitions as in section 46:8E-102 of P.L. , c. (C. ) (now before the Legislature as Assembly Bill No. 3072 of 2000).
3. Bidding requirements: An association, to the extent practicable, shall solicit a minimum of three quotes for any contract for services or materials whenever the amount payable by the association in connection with the services or materials exceeds $10,000 or five percent of the association's budget, whichever is less, in any twelve-month period. An association shall solicit in a uniform manner containing the required specifications a minimum of three sealed bids, to be opened only at a publicly announced meeting open to all unit owners, for any contract for services or materials whenever the amount payable by the association in connection with the services or materials exceeds $25,000 or ten percent of the association's budget, whichever is less, in any twelve-month period. These quote and bidding requirements shall also apply in any case in which the aggregate amount that might be paid to a single entity or a group of entities under common control for different services would exceed the stated thresholds. The association shall award the contract to the vendor who provided the lowest quote or bid, unless the board determines, for good cause that shall be expressly stated at a meeting open to attendance by the owners, that it would be detrimental to the best interests of the residents of the common interest community to award the contract to that vendor. The requirements of this section shall not give rise to a cause of action by a vendor who provides a quote or a bid to an executive board.
An association of members in a community having fewer than 30 residential units, through a resolution adopted pursuant to an open meeting and by a unanimous vote of all of the members, may waive any or all of the provisions of this section.
The provisions of this section shall not be applicable to any contract in existence prior to the effective date of P.L. , c. (C. ) (now before the Legislature as this bill).
4. Conflict of interest: a. No member of the executive board, or employee or property manager of an association shall have an interest in a business organization or engage in any business, transaction or professional activity which is in conflict with the proper discharge of his or her duties on behalf of the association, including, but not limited to, having a direct or indirect interest in any contracts for work or materials used by the association, or in any sales, leases or agreements in connection with any lands owned by the association, or in any fees or compensation of any kind paid to any broker, architect, engineer, vendor or other person doing business with the association.
b. No such board member, employee or property manager shall use his or her position to secure or attempt to secure unwarranted privileges for any person.
c. No such board member, employee or property manager shall act in his or her capacity as a board member or employee or property manager in any matter in which he or she, a related person, or any other person residing in his or her household or the household of a related person, or any business organization in which any of such persons has an interest, has a direct or indirect financial or personal involvement that might reasonably be expected to impair the objectivity or independence of judgment of the board member, employee or property manager.
5. Responsibility for safeguarding and preserving property: An executive board of an association and any property management personnel contracted by an association, shall be responsible for safeguarding and preserving all common property within the common interest community, so as to comply with all applicable laws and to protect the investment made by the owners of the lots, parcels, units or interests subject to the jurisdiction of the association and shall enforce rules requiring the proper maintenance of such common property. Executive boards and property managers shall comply with all rules which may be adopted by the commissioner, including, but not limited to, accounting procedures and financial and common property facility management requirements.
6. The commissioner shall have available for the enforcement of this act the powers set forth in sections 13 and 18 of "The Planned Real Estate Development Full Disclosure Act," P.L.1977, c.419 (C.45:22A-33 and C.45:22A-38) and section 3 of P.L. , c. (C. ) (now before the Legislature as Assembly Bill No. 3086 of 2000).
7. The commissioner shall have authority to adopt such rules as may be necessary for the implementation of this act, pursuant to the "Administrative Procedure Act," P.L.1967, c.410 (C.52:14B-1 et seq.), including, but not limited to, a code of ethics for association board members and employees.
8. This act shall take effect immediately, but shall remain inoperative until the enactment of P.L. , c. (C. ) (now before the Legislature as Assembly Bill No. 3072 of 2000).
STATEMENT
This bill authorizes the Department of Community Affairs to establish bidding and conflict of interest guidelines for homeowners' associations. An association is required by the bill to solicit a minimum of three quotes for any contract for services or materials whenever the amount payable by the association in connection with the services or materials exceeds $10,000 or five percent of the association's budget, whichever is less, in any twelve-month period. An association is required to solicit a minimum of three sealed bids, to be opened only at a publicly-announced meeting open to all unit owners, for any contract for services or materials whenever the amount payable by the association in connection with the services or materials exceeds $25,000 or ten percent of the association's budget, whichever is less, in any twelve-month period. These quote and bidding requirements shall also apply in any case in which the aggregate amount that might be paid to a single entity or a group of entities under common control for different services would exceed the stated thresholds. The association is to award the contract to the vendor who provided the lowest quote or bid, unless the board determines, for good cause that shall be expressly stated, at a meeting open to attendance by the owners that it would be detrimental to the best interests of the residents of the common interest community to award the contract to that vendor. An association of members in a community having fewer than 30 residential units, through a resolution adopted pursuant to an open meeting and by a unanimous vote of all of the members, may waive any or all of the bidding provisions.
The bill also provides conflict of interest guidelines for board members and property managers, which are intended to prevent self-dealing by a board member or property manager. In addition, the bill directs that board members be charged with the ultimate responsibility for the safekeeping and upkeep of common interest community property, as well as any management company with which the board may contract.
This bill is part of a package of bills which are based on recommendations of the Assembly Task Force to Study Homeowners' Associations, included in a report filed in January 1998. The bill will remain inoperative until the enactment of a companion bill which contains the definitional sections for a new chapter being created in Title 46 to which the companion legislation will be allocated.
