NJ Court Strikes Down Some DCA “Radburn” Regulations Impacting Community Associations

March 30th, 2024 | News

By Eric F. Frizzell, Esq.

On February 23, 2024, a New Jersey appellate court decided CAI-NJ’s challenge to various “Radburn” regulations, enacted by the New Jersey Department of Community Affairs, that impact community associations. Among the rulings that the court made were the following:

– Votes in association board elections must be counted publicly, but other tasks regarding ballots such as “verbal discussion to reconcile members’ standing, authenticate signatures, and accurately allocate votes” are not required to occur publicly. Simply put, the only action involving ballots that must occur publicly is the actual counting of the votes.

– The court rejected the DCA’s position that all votes by an association board must be taken in open session. The court ruled that an association’s board can vote at meetings, or portions of meetings, that are closed, “dealing with (1) any matter the disclosure of which would constitute an unwarranted invasion of privacy; (2) any pending or anticipated litigation or contract negotiations; (3) any matters falling within the attorney-client privilege, to the extent that confidentiality is required in order for the attorney to exercise his ethical duties as a lawyer; or (4) any matter involving the employment, promotion, discipline, or dismissal of a specific officer or employee of the association.”

– The court struck down the regulation that required an association with affordable housing units to reserve a seat for election by owners of those units. The court ruled that associations have “the option of limiting certain board seats to reserve seats for representatives elected by those in affordable housing units”, but that the DCA could not require associations to do so.

– The court struck down the regulation that required that a notice of meeting to amend an association’s by-laws must include an absentee ballot if the bylaws provide for a proxy ballot. The court noted that the Radburn statute “indicates an intent to leave the choice of whether to include proxy ballots or absentee ballots in the notice of the meeting to amend the bylaws to the discretion of the association” and that the DCA ‘s regulation had wrongly altered the Radburn statute by requiring both. Note that this ruling does not apply to other provisions in the Radburn statute and regulations pertaining to board elections.

– In addition, the court noted that the DCA, in response to CAI’s challenge to the regulation requiring associations with 50 or more units to offer ADR to a unit owner who is not in good standing prior to an election, had agreed to amend the regulation to “clarify that residents who are not in good standing and who have already been offered ADR or who have a judgment entered against them related to their standing shall not be offered ADR prior to the election.”

– Addressing concerns surrounding how to maintain the required anonymity of unit owner votes if proxy voting is utilized, the court simply noted that “[a]ny issue with proxy voting can be resolved by placing the ballot and proxy forms on separate pages.”

As always, please feel free to contact our law firm if you have any questions. This Bulletin is for informational purposes only and does not constitute legal advice.