New Jersey lake associations are hailing Governor Murphy’s second conditional veto of legislation which would have undermined some lake associations’ ability to assess their residents for maintenance of lakes in a private lake community.
The Planned Real Estate Development Full Disclosure Act (“PREDFDA”) was amended in 2017, establishing that residents in private communities are members of the association. Attempts to modify PREDFDA to exclude lake associations from its provisions were introduced in 2019 in a bill sponsored by District 24 representatives Oroho, Wirths and Space, which was conditionally vetoed by Governor Murphy.
The amendments failed to pass in 2019 and were re-introduced in 2020 as S908/A2480, which passed nearly unanimously, with Assemblyman Brian Bergen, an avid supporter of lake associations from District 25, the sole dissenting vote.
The Governor vetoed the legislation again yesterday, recognizing the attempt to shield certain property owners who objected to contributing, but noting that “the interests of these property owners must be carefully balanced against the interests of all other parties, including those property owners who have previously been contributing to their associations.” The Governor emphasized the need to “safeguard the ability of lake associations to collect funds necessary to comply with critical environmental, health, and safety requirements…”
Ernest Hofer, President of the New Jersey Coalition of Lake Associations, praised Governor’s conditional veto, stating “our lake communities face many challenges in their efforts to maintain their natural resources, and the proposed legislation would have had a potentially devastating effect on some lake communities. It is more important than ever, particularly with the threat of Harmful Algae Blooms, that lake associations can rely on the equitable pro-rata contribution of all of the residents to maintain the lake community in which they live.”
Click here for Governor Murphy's response to S908.
A lawsuit has been filed to prevent the implementation of recently-passed regulations. On May 18, 2020, regulations under the Planned Real Estate Development Full Disclosure Act (PREDFDA) were adopted and published by the New Jersey Department of Community Affairs (DCA). These regulations were proposed last year, and many organizations, including NJCOLA, submitted comments and objections. The regulations were made effective immediately.
By way of background, PREDFDA was amended in 2017, stating all property owners in common interest communities, as defined by the statute, were members of the association. PREDFDA also included requirements for notices to members, elections, by-law amendments and board meetings. In July 2019, DCA proposed regulations, clarifying and in some cases, expanding the requirements. Comments were submitted by many organizations and individuals, including NJCOLA, but very few changes were made. The new regulations were approved and published by the DCA on May 18, 2020 and effective immediately. Many associations were already preparing for or holding elections, and immediate compliance was impossible.
A New Jersey trade group representing condominiums, co-ops and homeowner associations called Community Associations Institute (CAI) has now filed an appeal in the New Jersey Superior Court, Appellate Division, challenging the new regulations, and DCA’s authority to propound them. CAI is seeking a “stay” of the regulations from DCA, and if unsuccessful, through a court order in the Appellate Division. If granted, the stay would suspend the implementation of the regulations until the Court resolves the pending appeal.
Some of the requirements under the new regulations include notice to members of the right to self-nominate, or nominate other members in good standing, public ballot tallying, a 90-day inspection period for ballots, sample ballots provided in advance which list candidates alphabetically, cannot denote incumbents and have write-in candidate spaces, and notice of standing status to members 30 days prior to the election and the right to challenge. The regulations will require many associations to amend their By-Laws. The regulations also provide fines for noncompliance.
NJCOLA will continue to monitor the case and provide updates on the issuance of a stay.
Click here to access 52N.J.R. 1057(a) regulation.
Click here to access Supreme Court decision on dam loan assessments.
cont'd from home page
A related issue of “fair share” annual payment of dues by members of both mandatory and voluntary lake associations must be fairly and intelligently addressed. It is an unfortunate reality that most, if not all, lake associations are financially constrained and challenged to meet ongoing budget expenses. There is no reprieve for the obligation of lake associations to pay annual federal, state and municipal taxes, insurance, staffing and administrative labor costs, employee benefits, and contributions to reserve funds for future replacement of equipment, buildings and roads, ongoing maintenance costs, expenses related to watershed facilities, lake upkeep, lifeguards, and ever-increasing costs of compliance with environmental regulations. These regulations and obligations include the addressing of lake water quality; replacement of dams ($0.5 to $2.0 million each); prevention of harmful algal blooms (a major 2019 / 2020 health and economic concern to New Jersey lake communities); preventative maintenance programs; lake dredging projects ($5 million to $40 million; [capital cost lake size dependent per project); annual water testing and monitoring programs; septic monitoring, inspections and associated maintenance; waste water facility additions; storm water treatment and watershed sustainability programs; and possibly storm water utility studies under the auspices of Municipal and/or State legal entities. The irrefutable fact is that meeting these obligations requires funding. From where does it come if not from the residents and property owners of these same lake communities who enjoy the full recreational value and benefits of the lake living lifestyle?
In summary, in direct opposition to unfounded accusations, our member lake associations are fully cognizant of and respond with due consideration to the financial concerns and circumstances of their individual members by tailoring individualized plans for payment of dues as necessary and appropriate. At the same time, it is essential to address and rectify the unfairness of a system whereby most, but not all, members of voluntary lake associations contribute their fair share of funding by payment of annual dues while others pay nothing at all. That is unfair. That is unsustainable.
Ernest Hofer PE
New Jersey Coalition of Lake Associations
STATEMENTS BY NJ REPRESENTATIVES MISGUIDED 4/30/20
Dear New Jersey Herald,
As President of the New Jersey Coalition of Lake Associations (NJCOLA), a coalition of 83 individual lake associations situated within Northern New Jersey, I am very disheartened to read the statement released by New Jersey District 24 representatives Senator Steve Oroho and Assembly Members Parker Space and Hal Wirths regarding alleged “tactics” taken by lake associations in regard to collections during the current COVID-19 pandemic. (The New Jersey Herald, April 26, 2020, Section A).
In direct opposition to their unfounded and unsubstantiated statements, most New Jersey Lake Associations are cognizant and respectful of the hardships currently being endured by their residents and have stood ready to deal with membership payment issues on a case-by-case basis.
Where required, most, if not all, NJCOLA Association members have, upon request, provided measurable relief in dues-related payment terms due to the COVID-19 pandemic.
Noticeably absent from the release was even one single example of a particular lake association that has taken an “overly aggressive approach” or that is “trying to intimidate owners with heavy-handed tactics,” as stated by Senator Oroho. If there is evidence of a particular lake association practicing tough collection practices during this pandemic, I can emphatically state that NJCOLA would like to be informed of such a case. Use of the word “tactics” in this context has a negative connotation, inferring an underhandedness and lack of understanding of the plight of the residents; whereas, on the contrary, the individualized actions of the lake associations of which NJCOLA is aware, have been respectful, considered, and appropriate. In fact, NJCOLA has heard from many of our members, sharing ways to provide relief and assistance to their members during these difficult times, including the extension of assessment due dates, expansion of payment plans, and the creation of hardship funds to assist those who are ill or have lost employment. At this time, it behooves us all to act on substantiated facts, not false assumptions.
It is eminently germane to note that while their residents face medical and financial hardships, lake associations are functioning under many of the same trying conditions and challenges posed by the current crisis, yet these associations remain obligated to pay taxes, insurance and other financial obligations, maintain lake water quality, address the Harmful Algal Bloom (HAB) crisis some of our member lakes have experienced, and meet ever-evolving, more stringent regulatory obligations. It is also noteworthy that Lake Associations are being offered few of the financial safety nets made available to large corporations and small businesses.
In lieu of releasing inflammatory statements advancing the interests and concerns of a favored segment of their constituency, our legislators would be better served by open-mindedly and fairly considering legislation to assist the needs of lake communities in which many more of their constituents reside, in their entirety.
Ernest Hofer PE, President
New Jersey Coalition of Lake Associations
EXECUTIVE ORDERS: Governor Murphy has signed several Executive Orders related to the coronavirus emergency. All Orders can be found at https://nj.gov/infobank/eo/056murphy/
EO 107 implemented the social distancing regulations, the closure of all non-essential businesses and required implementation of work from home policies. Exceptions were noted. As a result, associations implemented the closure of offices, recreational facilities, eliminated club and social gatherings.
EO 108 prohibits counties or municipalities from passing laws inconsistent with the Orders, but specifically allowed he State Director of Emergency Management, (who is the Superintendent of the State Police) to impose additional restrictions in response to COVID-19 for “Online marketplaces for arranging or offering lodging” (such as AirBnB) or municipal or county parks.
Based on this Order, several Towns have banned short-term rentals in their communities (see Vernon township’s Order at http://www.vernontwp.com/pdf/covid_admin_order1.pdf
EO 122 ceases all non-essential construction projects. Exemptions include transportation and utility projects, some projects already in progress, and projects ordered by a by Federal, State, county, or municipal government, which would include certain dam projects.
S2342/A-3915 Permits nonprofit corporations to allow members to participate in meetings by means of remote communication, and permits nonprofit corporations to hold meetings in part or solely by means of remote communication during state of emergency https://www.njleg.state.nj.us/2020/Bills/S2500/2342_I1.HTM
(Note this is for member meetings, but not Board meetings. For associations that are “for-profit” new legislation allows for remote meetings. But for nonprofits, there has not been any new emergency provisions, although there are existing emergency provisions in the nonprofit statute at NJSA 15A:2-11)
S2336/A3903 Allows for remote notarial services, which can be used for association contracts, lien claims, etc. https://www.njleg.state.nj.us/2020/Bills/A4000/3903_R1.HTM
S2330/A3908 This legislation was proposed, but has not yet been passed by the legislature. It prohibits both associations and their attorneys acting as debt collectors from initiating or even threatening collection actions for delinquent accounts. It also allows for further limitation on judgments by executive order. https://www.njleg.state.nj.us/2020/Bills/S2500/2330_I1.HTM
Some county Health Department released regulations regarding beach closures: : https://www.sussex.nj.us/documents/coronavirus-2020/20200409-recbathingalert.pdf
1/29/19 UPDATE: Ramapo Mountain Lakes in Oakland was successful in obtaining judgment from the Bergen County Superior Court that recent changes to the Planned Real Estate Development Full Disclosure Act (“PREDFDA”), in 2017, mandated that all property owners are members of the association, and subject to dues and assessments. The Court also confirmed that provisions of PREDFDA required the By-Laws be amended in order to be in compliance, and allow the amendments to be done by Board vote only.
Eileen Born, Esq., Dolan & Dolan, delivered a presentation on 9/15/18 on amendments to PREFDA that may impact NJ lake associations that are not in compliance.
The NJ Department of Health issued NJ State Bathing Code regulations effective January 18, 2018. Click here to view or download the current regulations.