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Appellate Decision Regarding NJ Radburn Law
By March 11, 2024 Posted in Community Association Law Share
On February 23, 2024, the Superior Court of New Jersey Appellate Division issued an unpublished opinion reversing several New Jersey Department of Community Affairs (DCA) regulations, commonly referred to as the NJ Radburn Law. The opinion can be found on the Court’s website at https://www.njcourts.gov/system/files/court-opinions/2024/a2241-21.pdf
The Radburn Law became effective in July 2017and addressed, among other things, community association elections, by-law amendments, and membership voting. In July 2019, the DCA proposed regulations to assist in implementing the Radburn Law. The Community Associations Institute (CAI) submitted extensive comments on the proposed regulations. The new regulations were approved and published by the DCA, effective on May 18, 2020. As few of CAI’s concerns were addressed through these regulations, CAI ultimately sought an appeal to challenge the regulations.
In its ruling, the court affirmed several DCA regulations, including the public tallying of ballots, the DCA’s recommended double-envelope system, and the period of time Associations are to retain electronic recordings of meetings. The Appellate Division also reversed several regulations regarding affordable seat representation on executive Boards, voting actions to be taken during closed or executive board meetings, and requirements related to obtaining absentee ballots and proxy ballots for proposed bylaw amendments.
The Appellate Division reversed several regulations concerning representation on executive boards for affordable unit owners, voting during closed meeting sessions and use of absentee and proxy ballots for proposed changes to by-laws.
Appellate Division Reversals:
First, the DCA regulations previously required that when affordable units represent a majority of units in the Association, a seat should be reserved on the executive board for election by owners of affordable units [N.J.A.C. 5:26-8.10(a)(2)]. CAI argued that this regulation conflicted with N.J.S.A. 45:22A-45.2(f)(1)(c). While the Appellate Division agreed that the reservation of at least one seat to be elected by members of affordable housing units does not conflict with Section 45:22A-45.2(f)(1)(c), they did find that the regulation does alter the terms of the statute by turning an option into a requirement; therefore reversing N.J.A.C. 5:26-8.10(a)(2).
Second, the DCA regulations previously provided in N.J.A.C. 5:26-8.12(e)(2) that when a board meets in a closed or executive session concerning one of the four matters excluded by statute from consideration in a meeting open to the owners, a vote taken at such meeting would not be binding. This section further required that should a matter require a binding vote; the vote must be taken at a subsequent open meeting in a manner that does not disclose any confidences. CAI argued that the Planned Real Estate Development Full Disclosure ACT (PREDFDA) allows association boards to hold closed sessions based on the four exceptions, and votes taken during those sessions may be binding as long as they fall within one of the four exceptions. The Appellate Division agreed that the regulation was contrary to statutory law and found that statutory law “does not forbid binding votes from being taken at all closed meetings, as the regulation does. Thus, we deem the regulation as altering the terms of the statute.”; therefore reversing N.J.A.C. 5:26-8.12(e)(2).
Lastly, the DCA regulations provide in N.J.A.C. 5:26-8.13(f)(4) that if permitted by the bylaws, the notice of a meeting where bylaw amendments are to be proposed shall include an absentee ballot with instructions for returning the ballot. CAI argued that this regulation conflicts with N.J.S.A. 45:22A-46(d)(2)(d), which provides that “the notice of the meeting [to amend bylaws] shall include a proxy ballot or absentee ballot” if the bylaws permit it. The Appellate Division agreed, stating that the statute “indicates an intent to the leave the choice of whether to include proxy ballots or absentee ballots in the notice of the meeting”; therefore, reversing this portion of N.J.A.C. 5:26-8.13(f)(4).
It is important for anyone involved in community associations to understand the full impact of this decision. Association members and board members should be informed of all changes to laws and regulations that govern how the association should conduct operations. By seeking professional guidance, you can ensure that your association is operating in compliance with the law.
If you have any questions or require further information, Griffin Alexander, P.C., can help. Our attorneys are experienced in all aspects of Community Association law.
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 your circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.