Governor Chris Christie recently signed a bill that changes how elections in Fair Lawn’s Radburn neighborhood are run — which will impact the approximately 7,000 common interest communities in New Jersey. The so-called “Radburn Bill” changes how residents are elected to Radburn’s board of trustees.
Radburn is one of the oldest planned real estate developments (PREDs) in the United States. There are approximately 3,100 people residing in Radburn. The development includes 469 single-family homes, 48 townhouses, 30 two-family houses and a 93-unit apartment complex. Radburn was created in 1929 as a “Town for the Motor Age,” and includes 18 acres of parks, a shopping plaza, and an elementary school. In Radburn, founders attempted to create a self-sufficient community.
As provided for in the original deed restriction, the Radburn Association governs the community and maintains its common properties – and only current and former trustees are considered members of the Radburn Association. Thus, only 40 homeowners (or fewer) out of approximately 1,300 homeowners, acquired member status. The Radburn Association’s nine-member board of trustees had sole power to nominate candidates to run in elections. That effectively disenfranchised 97 percent of Radburn homeowners.
Several years ago, a dispute arose concerning the board member election process. Residents complained about the process, claiming it was secretive and undemocratic and that candidates were vetted and kept off the ballot by a small group of former and current trustees. Residents brought attention to a secret sale of recreational property. Equally troubling were reported discrepancies between expenditures reported to residents and the amounts filed with the IRS.
The Radburn Association board levies annual assessments, manages common land, sets policies, and controls architectural alterations. For years, the Radburn Association systematically claimed it was not a homeowners’ association and refused to grant any rights to homeowners, including financial disclosure.
In November 2006, a group of Radburn residents filed a lawsuit against the Radburn Association, claiming that Radburn’s governance violated New Jersey state law and the New Jersey State Constitution. The Superior Court ruled against them in part, finding that Radburn’s governance was legal, as well as its membership. The court ordered the Radburn Association to comply with the law by providing full financial disclosure to residents and amending its bylaws to allow open trustee meetings four times each year.
The finding in Moore v. The Radburn Association, Inc. that the New Jersey Planned Real Estate Development Full Disclosure Act (PREDFDA) does not provide membership in governing associations for all homeowners was upheld on appeal. The New Jersey Supreme Court declined the petition for certification, leaving in place the Appellate Division’s decision, which allowed homeowner associations to limit membership to a select group of homeowners.
Senate Bill 2492 was proposed in response to the finding that the PREDFDA does not guarantee free elections in planned community developments. Now signed into law, P.L 2017, c.106 remedies the situation, providing membership in governing associations to all homeowners. The new law allows, among other things, that any unit owner may run to serve on the board, allows members to self-nominate, provides for electronic notice, requires at least 14 days and no more than 60-days-notice of election meetings, and allows for proxy and absentee ballots. The new legislation also addresses procedures for addressing bylaw amendments.
The new legislation applies to all common-interest communities in New Jersey, such as condo associations and co-ops. The new law requires associations to consider all unit owners members, entitled to run to serve on the board overseeing the community’s finances and policy.
If you have any questions about this new legislation and how it affects your association, please contact the author of this blog or your association’s attorney.