Quote from NJ HOA Info on August 17, 2024, 2:29 pm

I think this may answer your questions: NJ CooperatorNews

Q&A: Amending Governing Documents and the Radburn Act

By Martin Cabalar   Fall 2020Q&A

Q.  I live in an adult community in South Jersey for 55-and-older people. It is a single-family fee simple community with an HOA. Our governing documents were amended in 2003 after receiving approval of two-thirds of the members. The governing documents require approval of two-thirds of the owners in order to change any of the governing documents. Our board of trustees is indicating that we need to modernize our governing documents to comply with the Radburn Law. It is my understanding that this only needs to be done if the required votes for change is in excess of two-thirds of the owners. Am I correct, or do our governing documents need to be changed if we currently require two-thirds approval? I believe the board wants to amend the documents to require less than two-thirds of the votes to change documents.

                          —Mending Amendments

A. “The reader does not indicate whether the question pertains to an amendment to the association’s master deed (sometimes referred to as a ‘declaration’) or the bylaws,” says attorney Martin Cabalar of the Morristown-based firm Becker. “As the reader may be aware, the required approval of the owners to amend the governing documents may differ between the master deed and bylaws. For example, oftentimes the vote required to amend the master deed is two-thirds; whereas, the vote required to amend the bylaws may only be a majority.

“It is common that an association would want to modernize their governing documents to come into compliance with existing or new laws such as the Radburn Act. Generally, where an association’s governing documents are contrary to existing law, the law would control barring some specific exception in the law. The Radburn Act, for example, would supersede anything in your association’s governing documents that was contrary to its requirements.

“The Radburn Act, however, does not automatically reduce a two-thirds requirement to amend the bylaws—assuming that is what the reader’s bylaws require. Rather, it provides that wherever bylaws don’t provide a method for the homeowners to amend the bylaws, or allows amendment of the bylaws with a greater than two-thirds majority, the homeowners have the right to amend the bylaws by a vote of a majority of all owners. In addition, the legislation prohibits a board from amending bylaws without a vote of the owners, except in two specific instances.

“First, it permits a board to amend the bylaws to the extent necessary to render them consistent with state, federal, and local law. This is beneficial since when the law changes in a manner that renders the bylaws inconsistent with law, it may cause confusion among the members and even the board members, because they may not be familiar with new law. Second, the board may propose an amendment to the bylaws and send notice of the proposed amendment to all association members, together with a ballot to reject the proposed amendment. If 10 percent or more of the owners reject the amendment within 30 days, it will be defeated.

“In sum, if the reader’s board wanted to require less than two-thirds vote to amend the bylaws, the board may propose the amendment, send notice to all members together with a ballot to reject, and, if less than 10 percent reject the amendment within 30 days, the proposed amendment would pass. Please keep in mind that this process only applies to the bylaws and not the master deed. Thus, we recommend that you consult with your legal counsel to make sure you are appropriately understanding and applying the requirements of the Radburn Act.”

Quote from hoaqtnsNJ on September 9, 2024, 9:20 pm

Sorry for the late answer.
I did not receive any notification for your answer.
After reading the posted document, it raised more questions than it provided answers.

In the article submitted, Morristown attorney Martin Cabalar states that "The Radburn Act, however, does not automatically reduce a two-thirds requirement to amend the bylaws".
This does not make sense:
NJAC 5:26-8.13 allows a Board to amend the bylaws by a majority of the total authorized votes when a more than two third majority is required. Effectively, this outlaws any majority above two-third even if semantically the Act uses the optional verb "may". No sane board will try to achieve a greater than 50% majority if 50% is all that the law requires (in the instance where the bylaws require more than two third majority).

Q1: If this is the case, shouldn't our bylaws be amended to reflect this reduced supermajority?

Also, the Radburn Act proposes a second method in which the board may approve amendments when 10% of the owners have not submitted a rejection ballot to a proposed amendment within 30 days after it was submitted.

Q2: Can the board choose its preferred method at its discretion? Which method should prevail?

If the Radburn Act EFFECTIVELY outlaws supermajorities above 2/3, then our bylaws should be amended to reduce our current 75% majority requirement to 66%. Suspiciously, the board is not planning to amend the 75% majority currently required by our bylaws to bring it in line with the Radburn Act. May be they think this would allow it keep the use the other two methods open for future use.

 

Thank you

Quote from NJ HOA Info on September 15, 2024, 2:51 pm

Because of your inquiry, I reread the actual text from the Senate Bill that was approved. See below.

Yes, it can be confusing. I am going to seek out some professional advice on this. You bring up some valid questions. BTW, my own community changed our bylaws to 51% from 67%, three years ago.

Let me also say this, the entire sentence is, "“The Radburn Act, however, does not automatically reduce a two-thirds requirement to amend the bylaws—assuming that is what the reader’s bylaws require."  IMO, after reading everything, the vote requirement above a 2/3 vote is no longer permitted.

Q1. Yes, bylaws should be amended to reflect current law and remove outdated information. Homeowners should be informed of this. But, it doesn't always happen.

Q2. If you're going to modify bylaws, please seek legal advice. Who is going to write the new section in legal terms (in your bylaws) and delete the prior one. Only a lawyer can compose that.

-Joanne

 

 

P.L.2017, CHAPTER 106, approved July 13, 2017

Senate, No. 2492 (Fourth Reprint)

Note: Anything in [brackets] is deleted.

(2)   If association bylaws provide for no method of their amendment by a vote of the association members 3open to all association members3 , or only allow association members to amend the bylaws through a majority vote exceeding a two-thirds majority, then the 2association2 members may amend the bylaws by an affirmative vote of 2[two-thirds] a majority2 of the total authorized votes in the association.  If the bylaws do not provide for a method by which the 2association2 members may call a meeting of the 2association2 members to conduct a vote to amend the bylaws or do not contain provisions concerning the subject matter of subparagraphs (a) through (f) of this paragraph, then a vote concerning an amendment to the bylaws shall be conducted as follows:

     (a)   fifteen percent of the 2association2 members may request a meeting of the association’s membership by executing a document requesting that a special meeting of the 2association2 membership be held, or if the annual meeting of the 2association2 membership 3[will] is scheduled to3 occur within 60 days of the date of the request, then the amendment vote shall be held at the annual meeting;

     (b)   if the vote 3[will not] is not scheduled to3 take place at the annual meeting of the association, the executive board shall schedule the special meeting of the 2association2 membership to occur within 60 days of the receipt of the request 4[, which] .  Notice of the meeting shall be provided to the association members and voting-eligible tenants, where applicable, at least 14 days prior to the date of the meeting.  The4 special meeting shall be held 3[between the hours of 7:00 p.m. and 8:00 p.m., except that if such day is a Sunday, the meeting shall be held on the next day thereafter] at a 4reasonable4 time 4[when] that is likely to permit4 most association members 4[are able]4 to attend3;

     (c)   the language of the 1proposed1 amendment shall be 1[submitted to the association and shall be placed in appropriate form for distribution to the membership, which] unambiguous and consistent with applicable law and with the provisions of the bylaws that are not proposed to be amended, and if not in such condition shall be revised to satisfy that requirement.  Upon satisfaction of this requirement, the1 amendment shall be mailed, hand-delivered or, if the bylaws permit, electronically delivered, together with the notice of the meeting to the 2association2 membership at least 10 days prior to the meeting;

     (d)   if permitted by the association’s bylaws, the notice of the meeting shall include a proxy ballot or absentee ballot with instructions for the return of same, which instructions shall permit facsimile or electronic mail delivery of the proxy ballot or absentee ballot to the association and shall not require receipt of the proxy or absentee ballot more than one business day prior to the meeting;

     (e)   if a sufficient number of ballots or proxies are not received at the special or annual meeting to conclusively determine that the proposed amendment has been approved or rejected, the meeting shall be adjourned for a period of 30 days, or such longer period as approved by the 2association2 membership by approval of a motion to extend the vote concerning the amendment, but in no event for longer than 11 months from when the notice of the meeting was sent, and all proxies or ballots received prior to the extended date shall remain valid if otherwise valid under the terms of the bylaws; and

     (f)   2[if the] when an2 amendment is approved, 2a copy of the approved amendment shall be provided to all association members, and2 the association shall promptly record the 2[same] amendment2 in the county recording office where the bylaws were recorded.

     (3)   Paragraph (2) of this subsection shall not be construed to require a vote to be held on an amendment to the bylaws that has been voted on in the preceding 12 months of the initial meeting request, made pursuant to subparagraph (a) of paragraph (2) of this subsection. 

     (4)   For the purposes of paragraph (2) of this subsection, the number of total authorized votes in the association shall be based on the whole number of units owned by someone entitled to 2association2 membership 3[in the association]3 after subtracting those 3[owners] association members who are3 ineligible to vote because they are not in good standing. 

     3(5)  An executive board shall not amend the bylaws of an association without a vote of the association members open to all association members, as provided in the association’s bylaws, or where the bylaws provide for no method of their amendment by a vote of the association members, or only allow association members to amend the bylaws through a majority vote exceeding a two-thirds majority, then an association shall only amend the bylaws pursuant to paragraph (2) of this subsection, except an executive board may amend the bylaws under the following circumstances:

     (a)  to the extent necessary to render the bylaws consistent with State, federal or local law; or

     (b)  after providing notice to all association members of the proposed amendment, which notice shall include a ballot to reject the proposed amendment.  Other than an amendment to render the bylaws consistent with State, federal, or local law, if at least 10 percent of association members vote to reject the amendment within 30 days of its mailing, the amendment shall be deemed defeated.3

(cf: P.L.1993, c.30, s.4)

Quote from Margaret on October 11, 2024, 3:07 pm

Hello NJ Help. Just seeing what's happening and a catch up on topics. None of the NORMAL acts are happening in my HOA Cherry Hill, NJ except to slip further underground. Associa third manager assigned, is un-responsive so most gave up and anyone who can has sold or selling. Two this week. Long story some of it known to you Joanne.  Huge difference now is that Board has done another huge $230,999 debt project binding HOA to repay, without due process and by bad actors. My push for how project to be repaid was met with an absurd cease letter and threat fine $240/hour if I contact admin.

Have no choice or intent to back off now that they have breached every duty of care that a case can be made for a win. Biggest downside is finding lawyer who wants to make a name for themself by taking on HOA abuse. Any help appreciated. I am still pushing at the CTA and slamming CAI.

Hope all ok with you and your HOA. Margie T.