The Shortcomings of S805 (previously S2344) and A798 (previously A3855) , The proposed New Jersey Uniform Common Interest Ownership Act (UCIOA)

In June of this year the NJ General Assembly passed A798, the Uniform Common Interest Ownership Act (UCIOA), a bill drafted mainly by attorneys of the Community Association Institute (CAI).   The CAI is a trade organization that represents attorneys, accountants, management companies, property managers, administrators and board members. The bill was rammed through the Assembly without sufficient notice and without any meaningful discussion about its shortcomings.  All attempts to inform the legislators about how detrimental A798 would be for HOA residents fell on deaf ears. 

Shortly after the Assembly passed the bill, the CA/PAC, the political action arm of the CAI, donated $5,000 to Assemblyman Joseph Roberts, the Majority Leader, and $2,500 to Assemblyman Wilfredo Caraballo, the chief sponsor of the bill.  These monies come from annual contributions made by HOA boards to the CA/PAC, often without the homeowners’ knowledge.

At this point, S805, the Senate counterpart to A798, is lurking at the Senate doors.  Its chief sponsor is Senator Joseph Doria. CAI’s chief lobbyist is Adam Kaufman from Capital Public Affairs. Mr. Kaufman used to be Senator Doria’s chief of staff when he was Speaker of the Assembly several years ago.

As with documents that are designed to deceive, S805 cannot afford a careless reading. At first blush S805 appears to use all the right buzz words.  It even makes the bold claim that it has adopted “many of the recommendations of the Task Force of the Assembly to Study Homeowners Associations”.

Many HOA residents are aware that in 1998 the NJ Assembly Task Force to Study Homeowners Associations issued a report of its findings and recommendations aimed at comprehensive reform of New Jersey’s inadequate statutory regime governing community associations.  The Task Force report included recommendations to:

(1) improve Alternative Dispute Resolution (ADR) procedures between associations and homeowners; (2) ensure fair election procedures; (3) speed the transition from developer control to owner control of the board; (4) require competitive bidding for substantial expenditures by associations; (5) ensure access by homeowners of vital financial information; (6) establish an Office of Ombudsman for Homeowner Associations; and (7) recognize “the increasingly governmental nature of the duties and powers ascribed to the homeowners’ association board.”

In our view, the Task Force recommendations provided an excellent blueprint for legislative reform of community associations.  What remained to be done was to craft legislation to give meaning and content to these broad aspirations, so that true reform could emerge.

Unfortunately, S805, although it purports to give effect to the recommendations of the Assembly Task Force, actually subverts and undercuts many of the Task Force recommendations.  Among its deficiencies, the bill gives far too much power to association boards, and does far too little to ensure that the rights of homeowners are adequately protected. 

The Assembly Task Force report laid the groundwork for real reform. But S805 does not follow through on that promise. It does not achieve the objectives of transparency, accountability, and oversight that are the keys to real reform in community associations, nor does it address a homeowner’s due process rights, rights of public participation, and rights to equal treatment. 

The following is a detailed outline of the shortcomings of S805.  If you agree with our analysis call or write your legislator and tell them not to support tthis bill.  Anyone who is genuinely interested in bringing democratic reform to HOAs should reject S805 outright.

Visit the NJ Legislature website to find out how to reach your local legislators.

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