New State Regulations: A Detailed Look at Changes for Board meetings

May 30th, 2020 | Community Association Law Blog

By Eric F. Frizzell, Esq.

Regulations enacted this month by the New Jersey Department of Community Affairs impact numerous facets of the administration and management of community associations. The regulations make key changes to various aspects of Board meetings, such as the requirements for scheduling and holding of meetings, voting in open session, mandatory notice of meetings to unit owners, minutes, emergency action by Boards, and cancellation of meetings, as follows:

I. Open Board Meetings

• All binding votes by an association board must be taken in open session.

• The board must provide a brief explanation of the basis for and cost entailed in the matter that is the subject of any binding vote and include the explanation in the minutes for the meeting.

• The board may exclude attendance of all association members at meetings, or portions of a meeting, only for discussion of any the following matters:

    1. Those in which disclosure would constitute an unwarranted invasion of individual privacy;

    2. Pending or anticipated litigation or contract negotiations;

    3. Those involving employment, promotion, discipline, or dismissal of a specific employee or officer of the association; and/or

    4. Those falling within the attorney-client privilege, to the extent that confidentiality is required in order for the attorney to exercise his or her ethical duties as a lawyer.

• A vote taken at a closed meeting shall not be binding. If the matter requires a binding vote, it shall be taken at a subsequent open meeting in a manner that does not disclose any confidences. [This could be tricky – you can discuss the items in categories 1 through 4 above in closed session but must take a binding vote regarding them in open session. This will require drafting the language for the vote so that it does not disclose any confidential information.]

• If the closed meeting is to be part of an open meeting, the closed portion must be convened either before the open portion or at the end of the open meeting portion of the agenda.

II. Scheduling of Board meetings

• Within seven days following the annual association meeting, the association must post, and maintain posted throughout the year, an open meeting schedule of the board.

• The open meeting schedule must be posted be prominently posted in at least one place on the property that is accessible to all owners at all times, on the association’s website, and must included in any association newsletter.

•The open meeting schedule must contain the time, date, and locations of such meetings.

• Any changes to the posted open meeting schedule must be made at least seven days prior to the scheduled date and posted and maintained in the same manner as the original schedule.

III. Notice to Unit Owners of Board Meetings

• In addition to the posted open meeting schedule, adequate notice of at least seven days prior to any such meeting shall be given to all association members (and “voting eligible tenants” if you have any – they are defined to mean “a tenant of a unit within a planned real estate development in which the bylaws of the development permit the tenant’s participation in the executive board elections or the development has allowed tenant participation in executive board elections as a standard practice prior to” May 18, 2020. The vast majority of community associations do not have voting eligible tenants).

• The notice must be personally provided to each member or designee by mail, hand-delivery, or electronic means.

• The notice must be filed with the board member designated as responsible for administering association business. It must be maintained by the board for a period of two years.

• The notice must include the following details:

    – The time, date, and location of the meeting;

    – Agenda items to the extent known, which shall include items for discussion, items for action, and reoccurring items, such as passage of a budget.

• An individual association member or designee may provide written notice to the board waiving any personal delivery of meeting notices. Such member or designee may rescind such waiver at any time by written notification to the board. Notwithstanding the meeting notice waiver, the member or designee shall be entitled to open meeting minutes as provided below.

• Every elected board member must be provided equal opportunity to participate in any meeting of board members.

IV. Minutes

• Minutes for the open sessions of meetings must be taken for each meeting.

• The minutes must:

    – be legible;

    – include the board members present and their titles;

    – include clear identification of any matters addressed;

    – include clear identification of any matters voted on at the meeting, a record of the votes, and a brief explanation of the basis for and cost entailed in the matter which is the subject of the vote.

• The minutes must be made available to association members in a timely manner before the next meeting and may be identified as “draft” or “unapproved.”

• If a meeting is recorded electronically, a written record must be taken of the matters addressed and the matters voted on. Association members must have access to the electronic recording, as well as the written record, including the right to make a copy of electronic or written records.

V. Emergency Action by the Board

• When a meeting of the board is required to deal with matters of such urgency and importance that delay for the purpose of providing seven days advance notice would be likely to result in substantial harm to the interests of the association, and provided that the meeting is limited to discussion of, and acting with respect to, such matters of urgency and importance, notice of the emergency meeting shall be deemed to be adequate if it is provided as soon as possible following the calling of the meeting by posting the notice:

    – prominently in at least one place on the property that is accessible to all owners at all times;

    – on the association’s website and included in any association newsletter.

• The board must maintain, on the record, the facts establishing the emergency and any prior knowledge of the condition.

• Minutes for emergency meetings must be taken and made available to members of the association in accordance with the requirements on minutes discussed above.

VI. Cancellation of Board Meetings

• When the board has determined to cancel a scheduled open meeting, it must post notice of the cancellation at the meeting site by the time the meeting is scheduled to begin. The board must promptly post the notice of cancellation at the location on the property where notices are posted and, if applicable, its website.

• The notice must state when the meeting will be held and the reason for the cancellation.

• If the start time is delayed, notice of the new time must be posted at the meeting site to provide notice of the delay to those attending.

Please contact our law firm if you have any questions regarding these new regulations and their impact on your Board meetings.