Sept 2023

Update on Recent Changes to the RADBURN REGULATIONS By Matthew Earle, Esq., Kates, Nussman, Ellis, Farhi & Earle LLP

“On July 17, 2023, the DCA formally adopted the Regulations, which are effective immediately.”

A s many of you may know, in connection with its chal lenge of the May 2020 “Radburn Regulations”, the Community Associations Institute (CAI) was required to first file a petition challenging the regulations with the Department of Community Affairs (“DCA”). In response to the petition, on June 20, 2022, the DCA proposed some minor amendments to the Radburn Regulations, which were non-responsive to CAI’s petition. In August of 2022, the New Jersey Legislative Action Committee (NJ-LAC) submit ted comments to the DCA’s proposed regulations. On July 17, 2023, the DCA formally adopted the Regulations, which are effective immediately. In so doing, the DCA utterly rejected all of the NJ-LAC’s comments and also those submitted by former DCA employees. The amend ments are to N.J.A.C. 5:26-8.9, 8.11, 8.12, and 8.13. While most of the amendments are trivial, at least one is impactful. N.J.A.C. 5:26-8.11 3. (d) states that “Association members may initiate removal of a board member who was elected by the unit owners by submitting to the board a petition signed by a minimum of 51 percent of association members for removal of that board mem ber.” Practitioners in the field had generally interpreted that language to mean that upon receipt of such a petition, a

special meeting should be held on whether to remove the directors targeted by the petition, and if the directors were successfully removed, another meeting would be held to vote on replacements. In its rulemaking, the DCA proposed a “clarification” that the petition on its own, without any special meeting or vote, was sufficient to remove the targeted directors. CAI opposed this regulation on the basis that petitions are unreliable and that directors whose removal is proposed are entitled to due process. The DCA ignored these concerns and concluded that because the removed directors could run in the subse quent special election, there was ultimately no harm, no foul. Furthermore, the DCA does not address what happens if, for example, all of the directors are removed at once via petition. We believe that the result of this misguided legislation will mean more litigation over whether signatures on petitions are valid, whether owners knew what they were signing, and whether signatures were obtained by nefarious means. Other amendments of note include: • A clarification that electronic voting does not require public tallying and that “the results of the electronic elec tion” shall be made available for review for a period of CONTINUES ON PAGE 44

May Lim/iStock/Getty Images Plus

42

SEPTEMBER 2023