ASSEMBLY NO 2030 STATE OF NEW JERSEY 212TH LEGISLATURE

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A2030

ASSEMBLY, No. 2030

ASSEMBLY NO 2030 STATE OF NEW JERSEY 212TH LEGISLATURE

STATE OF NEW JERSEY

212th LEGISLATURE

ASSEMBLY NO 2030 STATE OF NEW JERSEY 212TH LEGISLATURE

INTRODUCED JANUARY 17, 2006



Sponsored by:

Assemblyman RONALD S. DANCER

District 30 (Burlington, Mercer, Monmouth and Ocean)

Assemblyman JOSEPH R. MALONE, III

District 30 (Burlington, Mercer, Monmouth and Ocean)





SYNOPSIS

Authorizes common interest community associations and homeowners to utilize State Office of Consumer Protection for dispute resolution.


CURRENT VERSION OF TEXT

As introduced.

ASSEMBLY NO 2030 STATE OF NEW JERSEY 212TH LEGISLATURE

An Act concerning dispute resolution for common interest community homeowners, and supplementing P.L.1989, c.9 (C.2A:62A-12 et seq.).


Be It Enacted by the Senate and General Assembly of the State of New Jersey:


1. Notwithstanding any other law or governing documents of an association to the contrary, an owner of an interest in residential real estate within a common interest community, or the governing board of a common interest community association, shall be authorized to submit unresolved disputes to the Office of Consumer Protection, in the Division of Consumer Affairs in the Department of Law and Public Safety for alternative dispute resolution (ADR) services.

2. On or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), notwithstanding any statute or regulation to the contrary, a common interest community association shall have no obligation to provide an internal alternative dispute resolution procedure to members of the community. An association shall encourage the use of alternative dispute resolution in accordance with P.L. , c. (C. ) (pending before the Legislature as this bill) and shall inform owners accordingly.


3. As used in this act:

"Alternative dispute resolution" or "ADR" means the utilization, outside of a court of law, of problem solving methods or techniques to resolve disputes between parties, and may include mediation or arbitration.

"Association" means the association or corporation formed to manage and maintain the common elements of a common interest community.

"Common elements" means the real estate which is owned as tenants in common by all of the members of the common interest community, or the corporation in the case of a cooperative.

"Common interest community" means a residential community in which a person, by virtue of his ownership of a dwelling unit, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in a master deed or declaration. Such communities shall include, but are not limited to, horizontal property regimes, condominiums, cooperatives, and planned real estate developments subject to the registration requirements of P.L.1977, c.419 (C.45:22A-21 et seq.). If a homeowners' association is formed to manage commonly-owned elements of a recreational community, then that community shall be deemed to be a common interest community for the purposes of this act.

"Unresolved dispute" means a dispute involving the use, maintenance or ownership of the common interest property, or the bylaws or the rules of the association, and shall be construed broadly but may not be a matter currently under review by a court of competent jurisdiction. A dispute may be a considered an unresolved dispute whether or not the dispute has been submitted to an internal alternative dispute resolution procedure within the common interest community association. A dispute that is exclusively a personal dispute between two or more parties and which is unrelated in any manner to the common interest community shall not be deemed an unresolved dispute.

4. The Office of Consumer Protection, after receiving a request for ADR services pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) and making an initial review within a reasonable time period, shall contact all parties involved in the dispute within 15 days of the review to arrange for ADR services to be provided. Those requests which involve the sale of a unit for which a lien filing is pending by an association shall receive priority among other requests. The office may utilize existing alternative dispute resolution programs to provide ADR services, or the Attorney General may authorize specific programs or regulations for homeowner association disputes.


5. The Legislature shall appropriate annually sufficient funds to cover the expenses of the Office of Consumer Protection in the Division of Consumer Affairs in the Department of Law and Public Safety in providing the services required under section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) from the registration fees of builders of planned developments collected pursuant to "The Planned Real Estate Development Full Disclosure Act," P.L.1977, c.419 (C.45:22A-21 et seq.) or from registration fees as authorized by law to be collected from homeowners residing in common interest communities.


6. This act shall take effect immediately.



STATEMENT


This bill would authorize all homeowners within, and governing boards of, common interest communities to utilize the alternative dispute resolution services provided by the State bureau known as the Office of Consumer Protection, located in the Division of Consumer Protection, Department of Law and Public Safety. That bureau currently maintains an Alternative Dispute Resolution Unit that provides dispute resolution services in certain cases. The bill defines unresolved dispute very broadly, in order to lessen the need for litigation by these associations, but excludes clearly personal disputes between owners which are unrelated in any manner to the common interest community.

Common interest communities are communities in which some of the property is owned in common by all of the owners. Such communities include horizontal property regimes, condominiums, planned real estate developments, including retirement communities, and cooperatives or mutual housing corporations. Homeowners' associations are required under several statutes to have an internal alternative dispute resolution procedure available for owners as an alternative to litigation. Many associations have failed to provide for such procedures, or have limited the types of disputes which may be heard in those proceedings. Some associations have failed to provide neutral parties to serve as mediators, while others have charged large sums to contract for professional arbitration services. This bill will allow all common interest homeowners and their boards to utilize State services by neutral service providers for alternative dispute resolution. The costs to the State for providing the services will be reimbursed from the registration fees currently collected from developers pursuant to "The Planned Real Estate Development Full Disclosure Act," P.L.1977, c.419 (C.45:22A-21 et seq.) or from registration fees as may be authorized by law in the future to be collected from homeowners residing in common interest communities. Nothing in the bill will prevent those associations wishing to offer internal alternative dispute resolution procedures from continuing to do so, however the bill requires these associations to encourage the use of the State dispute resolution services.

(Sponsorship Updated As Of: 3/3/2006)


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