September 2025

Developer Obligations to Pay Maintenance Fees and Budgets By Ed San George, MPA, PCAM — NJ-LAC Vice Chair, INTEGRA Management Corp., AAMC

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Background: The New Jersey Builder’s Association (NJBA) and CAI’s New Jersey Legislative Action Committee (NJ-LAC) collab orated for a few years prior to the adoption of the new

versial, misunderstood, and often ignored by developers, associations and professionals, alike. The result was the new July 19, 2021, DCA regulations. The 2021 regulations only became effective with new communities that were registered with the DCA after July 19, 2021. Those com munities began to hit the market in 2023 and 2024, with first closings to new com munities and the application of the new regulations. In 2022, when developers were beginning to plan for the new regula tions, they first realized that they would be paying maintenance fees based on units registered with the DCA. Registered units mean the total number of units registered with the DCA for development, as presented in the Public Offering Statement. So, if a developer registered 300 units

Department of Community Affairs (DCA) regulations in July 2021 for developer obli gations to pay maintenance fees for units and developer budgets. The new regulations were a collaborative effort to redefine the method and formula to establish developer obligations, as defined in the Planned Real Estate Full Disclosure Act (PREFDA). Previously,

“Such a formula would likely create large funding surpluses for the association.”

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under PREFDA, the developer’s obligation to pay main tenance fees was based on a relationship between the benefits derived by developer-owned units for services that a unit was receiving from the association, while under development. The benefits-derived definition was contro

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SEPTEMBER 2025