CAI-NJ September 2021

Update on Legislation Regarding BOARD MEMBER TRAINING and MANAGER LICENSING By Matthew Z. Earle, Esq., Kates, Nussman, Ellis, Farhi & Earle, LLP

“While CAI supports training for board

members, it opposes mandatory training or licensing requirements...”

muhamad rukmana/ iStock/Getty Images Plus

R ecently, Assemblywoman Annette Quijano and Senate Majority Leader Loretta Weinberg introduced bills that would require mandatory training for com- munity association board members (A5492/S3790) and mandatory community association property manager licensing (A5493/S3789). As currently drafted, the board member training bill would require that all persons serving on a community association board of directors receive at least three hours of manda- tory training within one hundred eighty days of their initial election or appointment to the board. The Department of Community Affairs (the “ DCA ”) is required to administer the training (covering, among other things, legal matters, budgeting, and reserves) and implement regulations. Board members who fail to undertake the necessary training can be removed from the board by the DCA . The manager licensing bill requires that any person or entity providing community association management ser- vices must be licensed by the State. It further provides that the DCA is set up and administers a licensing regime and that a penalty of $4,000.00 per unlicensed management contract will be imposed. While CAI supports training for board members, it oppos- es mandatory training or licensing requirements because of legitimate concerns that mandatory training may place an undue burden on volunteer board members making it

more difficult to find qualified directors. Likewise, while CAI supports training and certifications for property managers, it opposes mandatory property manager licensing due to, among other things, past experiences in other states where licensing regimes failed. While CAI National would generally require that the LAC oppose both bills, due to the threat posed by the imminent legislation the LAC has received special dispensation from CAI National’s Government and Public Affairs Committee to nego- tiate with the sponsors of the bills to craft better legislation. For board member training, the LAC has two primary goals: (1) to ensure that any mandatory training require- ments do not have a chilling effect on the willingness of owners to serve on boards; and, (2) to ensure that those administering the training have the proper expertise and resources. Concerning manager licensing, the New Jersey LAC is interfacing with its national counterpart and its manager constituency to draft licensing legislation that will not unduly burden property managers both in terms of educational requirements and finances. Furthermore, the LAC will work to ensure that manager licensing authorities are overseen by those with experience in the property management field. Both of these bills are “works in progress” and further updates in the coming months will become available regarding this important prospective legislation. n

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