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Age-Related Ownership Restrictions Ruled Unlawful in New Jersey
By August 13, 2024 Posted in Community Association Law Share
On July 31, 2024, New Jersey’s Appellate Division affirmed a lower court ruling by determining that age-related ownership restrictions in senior communities are unlawful in the State.
Previously, it had been common for senior age-restricted communities throughout the State to require that homes be owned and occupied by individuals 55 or older (or, in some cases, with even older age restrictions). Restrictions such as these are typically in an association’s Master Deed, Declaration, or other governing documents.
However, in the case of New Jersey Realtors v. The Township of Berkeley, the Appellate Division recently affirmed the Superior Court ruling that these restrictions on ownership (not occupancy) were unlawful.
The case ultimately stemmed from a lawsuit regarding a local ordinance in the Township of Berkeley, which had limited ownership in specific senior housing communities to persons 55 years old or older based on previous land-use provisions. The Township amended its ordinances to require ownership—not just occupancy—by people of a minimum age in these communities. New Jersey Realtors (“NJR”) alleged that this ordinance by the Township unfairly and unlawfully violated state and federal laws. More specifically, NJR claimed that the ordinance violated restrictions on discrimination based on familial status found in the federal Fair Housing Act (the “FHA”) and New Jersey Law Against Discrimination (“NJ LAD”).
The Court found that the Township’s restrictions on ownership exceeded the permissible scope of the limited housing for older persons exemption in the FHA. In essence, the Court determined that the FHA’s exception permitting age-restricted communities required that those communities restrict their occupancy (not ownership) to individuals of a certain age. The Township’s restrictions on ownership exceeded the FHA’s limited exception and were, thus, discriminatory.
Language in the FHA and NJ LAD prohibits discrimination based on familial status. After its review, the Appellate Division found that the Township of Berkeley’s ordinance limiting ownership in age-restricted communities violated this aspect of the state and federal laws. NJR successfully argued that the Township’s age restriction on ownership in these communities was discriminatory.
This ruling has significant implications for age-restricted communities in New Jersey that currently have age-related ownership restrictions in their governing documents. Such communities must now recognize that these ownership restrictions are unlawful. As a result, community associations may wish to amend their governing documents to comply with the law. Fortunately, New Jersey provides a streamlined process for making such changes. Under N.J.S.A. § 46:15-18, if any member of a community association submits a written request to remove an unlawful provision of the governing documents, the board is authorized to amend the governing documents without requiring a vote of the owners.
At Griffin Alexander, P.C., we understand the complexities and challenges that community associations face in light of this recent ruling. Our experienced legal team is here to guide your association through the necessary amendments to your governing documents, ensuring compliance with the law and protecting your community’s interests.
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.