September 2025

deficits of the association while the developer controls the board. 3. The NJBA proposed a return of surplus on an annual basis by the board, rather than unit owners. We would accept a board deciding on the return of surplus, but developer-controlled boards must have some manner in which the calculation of the return of surplus cannot be undertaken without an independent third-party review and approval (perhaps by a NJ-licensed CPA), other wise the opportunity for abuse remains prevalent. In any dynamic of operating a community association, the decision making for financial matters should be left to the boards who are most conversant with the situation and needs. 4. The NJBA requests that the triggering event for develop er payments not be based on registered or permitted units but rather on home construction foundation footing inspections. While that may be an option, footing inspections are not as well documented as registered or permitted units. There is less of an auditable trail for foundation permits and a time gap from when the

foundation inspections are produced to when billing and collection of funds from the devel oper could occur. From the point of foundation inspection to completion and closing of title to a

“Developers expressed concern for overfunding of associations. “

third-party purchaser, the amount of time of six to ten months may not be sufficient to create positive cash flow for an association to operate. This approach negates the date-certain approach of the 2021 regulations and has the downside of reintroducing the prior subjectivity of the pre-2021 regulations. Provided there is a reason able basis by which developers can have the surplus returned to them, there is no overarching basis upon which the current registration-date requirement should change. 5. Based on the NJBA request, required annual budgets would be structured around developer income based on footing inspections and not registered or permitted CONTINUES ON PAGE 42

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