on a plurality based on all owners, not just those in attendance at a meeting where a quorum is present..
Typically, the process would be as follows:
1. The board approves an appropriate resolution conditionally approving the bylaw amendments and submitting same to the consent procedure;
2. A solicitation to owners is sent, and consents are collected;
3. When the requisite amount of consents are obtained, the 10-day notice is sent to all owners and the action is taken upon the expiration of the 10-day period.
This process may be very useful in scenarios where an amendment may be rejected under the Radburn 10% negative vote protocol, but where it may be difficult to obtain a
supermajority vote in a special meeting. It is also useful in smaller associations to avoid the time and expense of having to conduct a special meeting.
In other news, we are pleased to report that S3992 has now passed both the Assembly and the Senate, and is on the Governor’s desk for signature. As noted last month, these changes impact the reserve funding law requirement in several ways, including, among other things:
a. A definition of “Adequate” reserves, which defines adequacy as reserves not project to fall below zero during the 30 year life of the study.
b. It requires that reserve provides present associations with a “baseline” funding alternative. It also expressly permits funding plans with escalating contributions.
c. It corrects a typographical error in the original legislation that might cause one to believe that only associations subject to the structural integrity
inspections must update reserve studies at least every five years.
d. For a limited five year period, it permits associations to fund reserves at only 85% of the baseline funding level, but only if the board provides a notice to owners (in large font) that the reserves are not being adequately funded and when a projected loan or special assessment may be required to bridge the gap. Purchasers of the unit must also be provided with the notice.
ABOUT THE AUTHOR Matthew Z. Earle, Esq., chair of CAI’s New Jersey Legislative Action Committee (NJ LAC) is a partner with the law firm Kates, Nussman, Ellis, Farhi & Earle, LLP and concentrates his practice in the areas of community association law, real estate tax appeals, construction law, general equity, and commercial litigation before the state and federal courts of New York and New Jersey. Contact him at:
mearle@nklaw.com.
www.CAIKey sto ne .org 15
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