Sponsored by:
Assemblyman BRIAN E. RUMPF
District 9 (Ocean)
Assemblyman GREGORY E. MYHRE
District 9 (Ocean)
SYNOPSIS
Prohibits common interest communities from penalizing members who place unit into living, revocable trust fund or classifying placement as title transfer.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain common interest community property transfers and supplementing P.L.1977, c.419 (C.45:22A-21 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For purposes of this section, "governing documents," means:
(1) The recorded declaration of covenants for a community, a master deed, or a proprietary lease, and all duly adopted and recorded amendments, supplements, and recorded exhibits thereto; and
(2) The articles of incorporation, bylaws, and rules and regulations of the association and any duly adopted amendments thereto.
b. Notwithstanding any other provision of the governing documents of a planned real estate development, the placement by an association member or settlor of an association member's unit, or in the case of a cooperative, shares or proprietary lease, and assets into a living, revocable trust fund shall not constitute a title transfer for purposes of the association charging a membership fee, capital contribution fee, transfer fee, transfer tax, or other revenue-raising charge that is due on transfer of ownership. Notwithstanding the provisions of this subsection, the association may charge a fee that is reasonably related to the costs incurred by the association in connection with such a transfer of ownership.
2. This act shall take effect immediately.
STATEMENT
This bill would provide that the placement of the unit, or in the case of a cooperative, shares or proprietary lease, and assets, of an association member of a homeowners' association, condominium association, cooperative, or other planned real estate development (association), into a living, revocable trust fund would not constitute a title transfer for the associations' purposes. Under current State law, the governing documents of some associations could enable the association to derive a financial benefit when an association member sells or transfers a unit, assets, or shares or proprietary lease, including placing their unit into a living, revocable trust. This bill would protect association members and senior citizens living in an association by prohibiting the association from charging any fees due on transfer of ownership by placing the property in a living, revocable trust fund. The bill would permit an association to charge a fee that is reasonably related to the costs incurred by the association in connection with a transfer of ownership.