Bill Text: NJ S165 | 2012-2013 | Regular Session | Introduced
Bill Title: Creates non-State funded dispute resolution program for common interest community associations.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-01-10 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S165 Detail]
Download: New_Jersey-2012-S165-Introduced.html
STATE OF NEW JERSEY
215th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION
Sponsored by:
Senator ROBERT W. SINGER
District 30 (Monmouth and Ocean)
SYNOPSIS
Creates non-State funded dispute resolution program for common interest community associations.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning alternative dispute resolution and community associations, supplementing P.L.2005, c.155 (C.52:27EE-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) are intended to govern the procedures and provision of alternative dispute resolution to owners and others residing in common interest communities, and to their respective community associations, and shall be deemed to supersede any provisions of law or governing documents with which they conflict or are irreconcilable.
2. As used in this act:
"Association" means a homeowners' or community association required to be formed by a developer pursuant to section 1 of P.L.1993, c. 30 (C.45:22A-43), or pursuant to the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.), or any association formed for the purpose of managing common elements and facilities of a common interest community.
"Association governing body" means the board to which officers or trustees are properly elected from the membership of the association and the entity through which the association is authorized to act.
"Board" or "Common Interest Community Dispute Settlement Board" means the board established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) to facilitate dispute resolution among parties in common interest communities.
"Common interest community" means a development with commonly-owned property, such as a condominium, cooperative or planned real estate development subject to the requirements of P.L.1993, c.30 (C.45:22A-43 et seq.), or a lake community with maintenance obligations imposed as covenants running with the land on which the community is located through the various deeds of the owners.
"Department" means the Department of the Public Advocate.
"Governing document" means the master deed, declaration, incorporation documents, bylaws, and rules of any common ownership community, or any similar document concerning the operation or governance of a common ownership community. The term "governing document" shall not include a lease entered into separately by the association, unless the lease provides that it may be enforced pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).
"Party" or "parties" means an association, resident, or owner of a unit or house in a common interest community.
3. a. Any party in a common interest community may utilize the dispute resolution services of the Common Interest Community Dispute Settlement Board established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), in accordance this section.
b. Prior to the filing of a request for dispute resolution services with the Common Interest Community Dispute Settlement Board, 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). This requirement shall not apply to petitions filed with the board pursuant to subsection b. of this section. 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 for dispute resolution services with the Common Interest Community Dispute Settlement Board.
c. In the event the dispute in question involves a claim of a violation of the governing documents of the association by the association governing board or a claim concerning unfair election practices, then the members of the association, other than the developer, may sign and present a written petition, signed by at least 10 percent of the membership of the association, unless such requirement is waived under subsection b. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill), to the Common Interest Community Dispute Settlement Board requesting that it conduct a hearing on the claim, in accordance with section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).
4. a. There is established within, but not of, the Department of the Public Advocate, a separate unit to be known as the Common Interest Community Dispute Settlement Board. The board shall function as a facilitator and provider of alternative dispute resolution services for residents in common interest communities, as well as a hearing panel for determinations of claims concerning unfair elections or violations of governing documents.
b. The board shall be comprised of six members, to be appointed as follows:
One shall be a retired judge of the New Jersey Superior Court, for a term of four years, two members shall be residents of the State and who shall hold no elected office or be employed by or providing services to common interest communities, each for terms of three years, the Commissioner of Community Affairs, or the commissioner's designee, who shall serve ex officio, the Attorney General, or the Attorney General's designee, who shall serve ex officio, and the Public Advocate, or the Public Advocate's designee who shall serve as an ex officio, non-voting member.
c. Each member appointed by the Governor shall hold office for the term of his appointment and until his successor has been appointed and qualified. A member shall be eligible for reappointment. Any vacancy in the membership occurring other than by expiration of term shall be filled in the same manner as the original appointment but for the unexpired term only. All appointed members shall serve at the pleasure of the Governor.
d. The board members shall serve without compensation, but shall be entitled to utilize the staff of the Department of the Public Advocate to the extent funds are available pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill). Members shall be entitled to be reimbursed for reasonable travel and meal expenses, not to exceed $100 per occurrence.
5. a. Upon the request of an owner or resident for dispute resolution services in accordance with P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall arrange for alternative dispute resolutions services to be provided within a reasonable period of time through the Office of Dispute Resolution in the Department of the Public Advocate, in accordance with regulations to be promulgated by that department. The board shall have the discretion to reject any request which it deems frivolous, unreasonable, or lacking any basis in fact.
b. Prior to conducting a hearing, the board shall verify that a minimum number of signatures of the members of the association has been obtained on the petition submitted under subsection b. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill). However, for members of those common interest community associations that have not registered pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), no petition shall be required. For those associations that have registered in accordance with the provisions of 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), the number of members' signatures shall be at least 10 percent of the number of members of the association, other than the developer. If the required number of signatures has been obtained, the board shall be authorized to conduct a hearing on the petition.
The board shall convene a hearing, in accordance with subsection c. of this section, for claims or petitions presented to it under subsection b. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), within 30 days of the receipt of a petition or claims from residents in a common interest community, as follows:
The board shall make no determinations with less than three of its members participating in the determination. Notwithstanding this, the board shall be entitled to utilize the services of an arbitrator, or an attorney employed by the department, if it so desires, in lieu of forming a hearing panel.
c. At the hearing authorized to be conducted pursuant to subsection b. of this section, the board shall give full hearing to both the complaint of the owner or resident 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 board shall determine whether the governing documents were violated, or, if there exists a claim of election impropriety, whether the election should be voided, and a new election ordered. The board shall have the authority to install a temporary association governing body in the event it is determined no properly-elected members are serving on the association governing body.
d. The hearing shall be conducted in accordance with procedures adopted by the Public Advocate concerning dispute resolution, and may be handled as a binding arbitration; an appeal may be made only to the extent allowed for appeals made under binding arbitration. The board shall make a final determination in the 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 before it.
e. (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 the board shall be binding upon the parties. The failure of any person to obey a binding order of the board or 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 board that an officer or trustee of the association 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 association governing body, and a new election for his or her position shall be held by the association within 90 days of the finding.
6. a. Upon the adoption of the regulations required to be promulgated pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill), every association organized to manage a common interest community shall register with the Common Interest Community Dispute Settlement Board established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), on such form and in such a manner as the board shall require. Thereafter, the association shall re-register with the board on the first day of the 60th month following the date of the most recent registration.
At a minimum, the registration form shall require:
The name and location of the common interest community, and the number of dwelling units located therein.
A statement as to whether the organization is incorporated, and the location of the corporate agent.
The name of the most recently-elected officers or trustees of the association and contact information;
The name of the agent for service of process of the association;
The name of the developer of the community, and current address, if known;
Any additional information that the board may deem useful to carry out its purposes under P.L. , c. (C. ) (pending before the Legislature as this bill).
b. The registration form shall be accompanied by a fee in the amount of one dollar for each housing unit existing within the common interest community at the time of registration. The fee shall not be increased pursuant to regulation of any State agency or department. The fees shall be considered a private grant for a restricted purpose under subsection o. of section 5 of P.L.2005, c.155 (C.52:27EE-5) and shall be utilized solely for the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill).
7. a. Notwithstanding any provision of P.L. , c. (C. ) (pending before the Legislature as this bill), the activities of the Common Interest Community Dispute Settlement Board shall not be funded from any resources of the State of New Jersey, other than the registration fees collected pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. In the event that insufficient registration fees exist to cover 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 Public Advocate may charge an association a reasonable fee to cover the costs of the department for dispute resolution services provided or administrative costs incurred in connection with the provision of those services, in accordance with the powers granted to the Public Advocate pursuant to P.L.2005, c.155 (C.52:27EE-1 et seq.)
c. Dispute resolution services shall be deemed to be provided upon the agreement of the board to hear, or arrange for mediation or arbitration, on a matter. Those associations that have not registered pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) as of the date dispute resolution services are deemed provided shall pay to the board the fees required under that section.
8. The Public Advocate shall promulgate such regulations as are necessary to effectuate this act pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
9. This act shall take effect immediately, but remain inoperative until the regulations promulgated pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) take effect.
STATEMENT
This bill establishes a process for low-cost dispute resolution for residents, owners and associations of common interest communities. A common interest community is a development with commonly-owned property, such as a condominium, cooperative or planned real estate development subject to the requirements of P.L.1993, c.30 (C.45:22A-43 et seq.), or a lake community with maintenance obligations imposed as covenants running with the land on which the community is located through the various deeds of the owners. Most associations are required to be formed pursuant to State law when a developer files the plans to build the community.
Although current statutes require that community associations establish dispute resolution programs, many associations have failed to adopt them, while others restrict access to their program, which minimizes its effectiveness. The types of dispute resolution programs offered by associations vary greatly, from hiring private arbitrators at the owners' expense, to using biased members of the community. When the disputes involve an action by the board, the need for a uniform, monitored system of dispute resolution becomes important. It is cost prohibitive for owners to seek redress in the courts for unauthorized actions of their association governing boards, because these owners must finance the defense of the board (through the common maintenance fees assessed against all owners), as well their own legal claims as plaintiffs. It is unfair and against public policy to permit certain associations to act in such a manner, unchecked by any system of justice.
The Department of the Public Advocate is well experienced in providing dispute resolution services to private citizens. The bill creates a separate unit to be known as the "Common Interest Community Dispute Board." The board will provide dispute resolution services for owners, residents, and developers of common interest communities. The services of the board will not be funded by the State, but will be funded by a registration fee of one dollar for every unit owner, to be paid by the association through a registration process. Members of associations living in communities who fail to register will have more immediate access to the Common Interest Community Dispute Settlement Board for matters concerning governing board behavior. In addition, the unregistered associations will be subject to the assessment of fees by the department to cover the costs of dispute resolution services if provided for members of that association. It is the sponsor's intent that the provision of neutral dispute resolution services by the State, funded by registration fees from associations, will serve to quickly resolve disputes in a fair, efficient and low cost manner, with little or no cost to the State.
