CAP practice

Radburn Regulations bring new rules for Board Meetings & Minutes

In 2017, New Jersey’s legislature amended New Jersey’s Planned Real Estate Development Full Disclosure Act, commonly known as PREDFDA. These amendments have been labeled the “Radburn Amendments”. PREDFDA has always been administered by parts of New Jersey’s Department of Community Affairs (“DCA”). To that end, DCA has adopted regulations it claims are necessary to “implement” and/or “enable” relevant owners to “more easily and fully comply with” the Radburn Amendments. These regulations will likely be known as the “Radburn Regulations”.

The Radburn Regulations attempt to ensure that, no matter what, every “binding” decision of a board is first and only made at a board meeting open to attendance. These regulations define “binding vote” as a vote “made with a quorum of the executive board members present”. A board vote occurring at a “closed meeting” or via another forum has been expressly declared to be NOT binding. Now, owners can only be excluded for a “discussion” concerning a limited group of matters including those matters involving an unwarranted invasion of privacy and matters involving communications that should be confidential in light of the association’s attorney-client privilege. Any actual binding decisions concerning any of those matters must be first and only made at a board meeting open to attendance of owners. For every board vote, the board must provide to those in attendance a “brief explanation” of the basis for and “cost entailed” in the vote. There are a variety of strategies and arguments available to an association that hopes to minimize the burdens that the Radburn Regulations will place on associations in this regard.

The association must produce minutes concerning every board meeting open to attendance of owners. These minutes must be “legible”, noting the board members that participated. The minutes must clearly identify any “matters addressed”, any matters voted on, along with the basis for “and cost entailed in the matter which” was the “subject of the vote”. The minutes must be available to owners before the next board meeting, even if those minutes have to be identified as “draft”. Lastly, if a board elects to record its meeting, the recording must be available to owners.

New Rules for Notification of Board Meetings Under Radburn

In 2017, New Jersey’s legislature amended New Jersey’s Planned Real Estate Development Full Disclosure Act, commonly known as PREDFDA. These amendments have been labeled the “Radburn Amendments”. PREDFDA has always been administered by parts of New Jersey’s Department of Community Affairs (“DCA”). To that end, DCA has adopted regulations it claims are necessary to “implement” and/or “enable” relevant owners to “more easily and fully comply with” the Radburn Amendments. These regulations will likely be known as the “Radburn Regulations”.

The Radburn Regulations expressly address how “notice” of “board meetings” must be done. After the “annual meeting” – which the Radburn Regulations now make mandatory – the association has 7 days to “post, and maintain posted throughout the year, an open meeting schedule of the” board meetings. This annual schedule must identify the “time, date, and locations of each” meeting and be posted in at least 1 location identified by the Radburn Regulations. Any changes to the annual schedule of board meetings “shall be made at least 7 days prior to the scheduled date and posted and maintained” like the original schedule. Even if the association posts this “schedule” it still must give “all members” direct notice of every board meeting at least 7 days prior. This individual notice must also be posted publicly and on any “website and included in any newsletter”. Additionally, the association must provide each notice “personally” to every owner “by mail, hand-delivery, or electronic means”. Lastly, this “notice” must include certain details concerning the board meeting’s time, etc. and agenda details that note particular discussion, action, and reoccurring items. The association must even post a notice of “cancellation at the meeting site”, at a location within the association and on the website if a meeting noted on the overall annual meeting has been canceled.

The Radburn Regulations do allow a board meeting to deal with “matters of such urgency and importance that delay for the purpose of providing 7 days advance notice would” likely result in “substantial harm” if that board “meeting is limited to discussion of, and acting with respect to” the urgent and important matter. In that case, notice must be “provided as soon as possible following the calling of the meeting”. That notice must also be posted publicly, posted on any association “website” (and included in any newsletter), and provided “personally” to every owner “by mail, hand-delivery, or electronic means”. The board must make certain records vis-a-vis this meeting and respect other controls.

Important Information About the New Radburn Regulations & Elections For Associations Consisting of Less than 50 Units

In 2017, New Jersey’s legislature amended New Jersey’s Planned Real Estate Development Full Disclosure Act, commonly known as PREDFDA. These amendments have been labeled the “Radburn Amendments”. PREDFDA has always been administered by parts of New Jersey’s Department of Community Affairs (“DCA”). To that end, DCA has adopted regulations it claims are necessary to “implement” and/or “enable” relevant owners to “more easily and fully comply with” the Radburn Amendments. These regulations will likely be known as the “Radburn Regulations”.

The Radburn Regulations expressly address “board elections” of associations with fewer than 50 units. The Radburn Regulations govern the use of proxies and absentee ballots by these small associations. If the association utilizes proxies, it must contain certain disclosures. An owner can revoke such a proxy prior to the casting of a vote. If the association utilizes proxies, it “must also make absentee ballots available”. Associations consisting of less than 50 units may permit electronic voting so long as the association can “verify the eligibility of the voters” and “count the ballots in a non-fraudulent and verifiable way”. DCA considers the following to be the “non-fraudulent and verifiable way” to count ballots:

1. any physical location for ballots must be “secured”;
2. ballot “tallying” must “occur publicly, with the ballots “open to inspection” for not less than 90 days from the election’s date;
3. ballots must be “cast in an anonymous manner”; and,
4. if the bylaws allow, and the particular member agrees, a ballot can be cast “electronically if “it is administered by a neutral 3^rd party and anonymity is maintained”.

Because of the Radburn Regulations, associations of less than 50 units must provide a notice of election that includes certain information and be provided within a tight 15-day window. Every owner in “good standing” can nominate himself or another owner in “good standing” to be a candidate for election and “good standing” is the only “criterion” that can be employed concerning a nominee’s eligibility. Owners of these associations must have the chance to review each candidate’s “qualifications”. An association of less than 50 units is not required to allow for “write-in candidates”. Lastly, any owner that the association considers to be not in “good standing” must be notified of that within a specific time frame prior to the election.

Brief Discussion Re: Radburn Regulations, Elections & Associations Consisting of 50+ Units

In 2017, New Jersey’s legislature amended New Jersey’s Planned Real Estate Development Full Disclosure Act, commonly known as PREDFDA.  These amendments have been labeled the “Radburn Amendments”.  PREDFDA has always been administered by parts of New Jersey’s Department of Community Affairs (“DCA”).  To that end, DCA has adopted regulations it claims are necessary to “implement” and/or “enable” relevant owners to “more easily and fully comply with” the Radburn Amendments. These regulations will likely be known as the “Radburn Regulations”.

The Radburn Regulations expressly address “board elections” of associations with 50+ units.  The Radburn Regulations govern the use of proxies and absentee ballots by these associations.  If the association utilizes proxies, it must contain certain disclosures.  An owner can revoke such a proxy prior to the casting of a vote. If the association utilizes proxies, it “must also make absentee ballots available”. Associations consisting of more than 50 units may permit electronic voting so long as the association can “verify the eligibility of the voters” and “count the ballots in a non-fraudulent and verifiable way”. DCA considers the following to be the “non-fraudulent and verifiable way” to count ballots:  (1) any physical location for ballots must be “secured”; (2) ballot “tallying” must “occur publicly, with the ballots “open to inspection” for not less than 90 days from the election’s date; (3) ballots must be “cast in an anonymous manner”; and, (4) if the bylaws allow, and the particular member agrees, a ballot can be cast “electronically if “it is administered by a neutral 3^rd party and anonymity is maintained”.

Because of the Radburn Regulations, associations of 50+ units must employ both a notice soliciting nominations and a notice of the election itself.  The notice soliciting nominations must be provided within a tight 30-day window. Every owner in “good standing” can nominate himself or another owner in “good standing” to be a candidate for election.  Thereafter, owners have at least 14 days, counted from the notice’s mailing, to submit a nomination. “Good standing” is the only “criterion” that can be employed concerning a nominee’s eligibility. The association is prohibited from mailing “ballots or proxies” until at least 1 day has passed since the end of the “nomination period”. After the nomination period expires, each owner is entitled to another election notice, sent by “personal delivery, by mail, or electronically”. Notice by electronic means can be sent only when the owner has agreed to this in writing or when the relevant governing documents permit such notices.  This notice must “contain” a ballot. Also, if the bylaws permit, the notice must also include “an absentee ballot”. If the particular bylaws provide for a “proxy ballot”, an “absentee ballot” has to be there too. Candidates must be listed alphabetically and the “ballot” must “include space for write-in candidates for as many seats as are up for election.” Persons elected as “write-ins” also have to be in “good standing”. Lastly, any owner that the association considers to be not in “good standing” must be notified of that within a specific time frame prior to the election.