Sept 2024

S2760 & A4384... from page 22.

DCA CHALLENGE... from page 16.

agreed to reduce the requirement to 30 days. The court upheld the amended regulation. • Next, the DCA regulations regarding amendments to bylaws attempted to graft the Radburn Election Laws requirements concerning elections onto amendments to bylaws. CAI sought that a regulation requiring 14 days’ notice of a meeting to vote on a bylaws amendment and inclusion of both a ballot and proxy were invalid and contrary to the statute. The court agreed, finding the DCA had overstepped its authority by attempting to include requirements that the legislature did not intend. “Perhaps most disappointing was the Court’s decision to uphold a new regulation authorizing DCA to impose fines for violations of the regulations.” • Perhaps most disappointing was the court’s decision to uphold a new regulation authorizing the DCA to impose fines for violations of the regulations. While CAI-NJ argued that the fine provisions contained in PREDFDA were confined to the original intent of that law – requiring developers to register planned real estate developments with the DCA – was not applicable to the Radburn Election Law, the Appellate Division sided with the DCA. It held that by including the election provisions within PREDFDA, the legislature evinced an intent to allow for the fining of associations. While experience shows that most legislators’ understanding of a new law is not so granular as to expect that a law passed 40 years earlier would apply to a 2017 law on a subject completely separate from the purpose of the original law, the court found the legislature was all-knowing by including the new law in a 40-year-old one. While the Appellate Division’s decision was disappoint ing in certain regards, it did rid the regulations of those provisions that were outside of any intent expressed by the legislature in adopting the Radburn Election Law, and clar ified other provisions in a helpful way, providing direction that was not previously apparent in the regulations. n

ing and zero baseline. Zero baseline is the riskiest form of funding. Consult with your Reserve Specialist or Engineer on funding methods and their risks. Just as importantly, note that the new law now requires both maintenance and preventive maintenance costs to be included in the reserve study. This does not need to be alarming, as you may already be providing those programs and costs. Most associations fund for what we have been calling deferred maintenance. In our industry deferred maintenance is main tenance that is needed but less than annually. It’s cyclical maintenance such as painting, caulking, seal coating, line striping, or mechanical servicing. These cost centers have been historically isolated into separate reports and funds. They are now in the reserve report but should remain in a separate fund to avoid any federal taxation. Reserves are specifically exempt from taxation, so if you include operat ing or preventive maintenance funds with reserves, you will jeopardize the tax exemption of the reserve fund. Similarly, you may be providing maintenance and repair programs in your operating budget for certain repairs to infrastruc ture of sidewalk, roads, and curbs, along with repairs to siding, roofs, or gutter cleaning, for example. These are now included in the reserve study and funding plan. So, double check your current deferred maintenance and oper ating costs to see the relationship of where they are being funded, whether operating or reserves. It’s all good, just a different presentation and funding method. I firmly believe that the new law is vital and timely for community associations in New Jersey as their structures are aging and reserve funding becomes more critical. The law promotes building safety, financial health, and fairness for all owners who need to contribute to the building’s safety and financial obligations. We at the NJ-LAC will continue to support the law and educate all. The law had attracted a great deal of attention and reference on a national level as a model piece of legislation. n “Most associations fund for what we have been calling deferred maintenance.”

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SEPTEMBER 2024