Laws, Lingering Problems
on condominiums and common interest residential associations were written in the
late 1960's by developers, the FHA, and banker-lenders. HOAs were treated as
property issues, not as people’s homes. These old laws gave extensive powers to
the boards who ran the associations with their hired
surrogates, mainly attorneys and management firms. New laws were needed to
replace antiquated systems such as the NJ Condominium Act.
A new trade association, Community Associations Institute (CAI), stepped in and
became dominated by the attorneys and management firms with membership from all
the trades that service property, everything from roofers to swimming pool
maintenance companies. Most states, including New Jersey, currently have a
chapter of CAI. CAI took on the task of writing the Uniform Common Interest
Ownership Act (UCIOA), a piece of national legislation that should CAI get their
way and have it become law, would allow association to continue their wrongful
behavior. The states that have passed UCIOA have different versions except for
Part V, which gives a state agency minimal authority to oversee the activities
New Jersey's HOAs Exposed
A similar situation developed in New Jersey. Fortunately, in 1997, the NJ
Legislature enacted the Assembly Task Force To Study Homeowner Associations,
which consisted of three Legislators (Bateman, Gregg, and Wisniewski), one
Developer's Attorney, one Managing agent, two CAI attorneys, and two HOA Board
Members. Although the Task Force was hardly representative of the interests of
the individual homeowner, the hearings did draw the testimony and
recommendations from many homeowners, including those from Lois and Sam Pratt,
two of C-IHC’s founding members.
At these hearings many homeowners learned that problems in their associations
were not unique and similar conflicts were occurring throughout the state. It
quickly became apparent that boards were acting as they did because they could!
There was virtually no limit to how they exercised their power despite the
negative impact it had on homeowners.
Winds of Change
The published testimony from the Task Force hearings was filled with
overwhelming evidence of associations’ poor governance and unfair operations. A
magnificent Task Force Report of desirable legislative reforms was prepared. In
addition, the Task Force recognized that associations should no longer be
considered business simply because they are corporate. Instead, the prevailing
principle that Associations are quasi-governmental entities, and as such, should
be subject to the same regulations as public governmental bodies, was adopted.
This distinction was of utmost importance because it requires the practice of
open meetings, conflict of interest provisions, and other modes of operation
that homeowners are entitled to but rarely experience.
In April 1997,
seventeen homeowners formed the Common-Interest Homeowners Coalition
Incorporated (C-IHC), equipped with bylaws and a mission statement. Since then,
we have grown into a successful non-profit organization with over 100 members
all over New Jersey...and we are still growing! C-IHC has publicly endorsed the
Task Force Report and incorporated it into a competing piece of legislation,
S-2016 (in the Senate) and A-3988 (in the Assembly). We have developed charts of
comparisons between the Task Force recommendations with the comparable provision
in UCIOA and have found that UCIOA consistently comes up short in protecting
homeowners. In contrast, S-2016 and A-3988 propose practical methods of
functioning HOAs while still protecting homeowners’ interests. We have gained
the support of several state legislators who appreciate our positions as being
different from those of the industry groups. C-IHC is positioned with a wide
range of members in terms of age, income, and backgrounds. We share a common
cause: to protect homeowners’ rights. We regard this issue as urgent and are
extremely optimistic that we are helping make change for the better. We have no
hidden agendas or monetary gain attached to these bills, we are simply
homeowners who have gotten together to because we believe that we deserve to be
governed by our Boards in a just manner.
It is imperative
that you contact your NJ legislators and
tell them to support S-2016!
Contact us for more info