Quick Answer
N.J.S.A. 46:8B-38 bars New Jersey condominium developers and associations from holding a right of first refusal on resale, gift or devise of a unit. A contract, master deed or bylaws adopted after September 11, 1980 cannot contain one, and earlier documents cannot be amended to add one. The only exception is for the State and its political subdivisions when state or federal law requires the right.
At a Glance
| Item | Detail |
|---|---|
| Law/citation | N.J.S.A. 46:8B-38 (L.1980, c.103, s.3) |
| Effective date | September 11, 1980 |
| Applies to | Condominiums (developer and association) |
| Key sections | 46:8B-38 only (we read this section, not 46:8B-32 to -37) |
| Remedy or penalty | None stated in the section |
What the Law Says
The section prohibits two things:
- New clauses: no sale contract executed on or after the effective date, and no master deed or association bylaws adopted on or after that date, "shall contain a clause or provision affording the developer or the association the right of first refusal to buy a condominium unit upon resale, gift or devise by the condominium unit owner."
- Later amendments: no master deed or bylaws, "whenever adopted, shall be amended on or after such date to include any such clause or provision."
The exception: the section "shall not apply to the State of New Jersey or any political subdivision of this State or any department, division, office, agency or bureau thereof or any authority or instrumentality created thereby if said right is required by State or Federal law."
What This Means in Practice
Boards
A board cannot amend the bylaws to give the association a first-refusal right over resales, gifts or inheritances, even with an owner vote. Our reading: this section is aimed at the association or developer buying the unit, so it does not by its words stop the association from screening buyers, reviewing documents or requiring a lawful transfer certificate. Ask counsel where an approval process might look like a refusal right.
Owners
If a master deed or bylaws contains a first-refusal clause, our reading is that whether it is valid depends on when that document was adopted. Documents adopted before September 11, 1980 are not addressed by the section's first sentence in the text we read, and we did not research how courts treat them. Confirm with counsel.
What the section does not say
It sets no penalty, does not say what happens to an existing clause, and does not address leases, rental approval or rights granted to anyone other than the developer or association. Those are open questions for counsel.
Timeline
| Date | Event |
|---|---|
| September 11, 1980 | Section 38 effective (L.1980, c.103) |
Related New Jersey Law
- N.J.S.A. 46:8B-13 and 14: bylaws and association duties
- N.J.S.A. 46:8B-15: association powers and fines
- New Jersey Condominium Act overview
Where We Stand
Our position: we are neutral on the section itself. It is a settled, narrow rule, and it removes a power most boards would not want to administer anyway. The practical tip: when you review old governing documents, flag any clause that reads like an association or developer purchase right and send it to counsel, since a clause that cannot be enforced can still confuse a closing. This is Association Property Managers' operating view as a management company, separate from the legal summary above, and it is not legal advice.
Board Checklist
- Search the master deed and bylaws for "first refusal" or "right to purchase."
- Note the adoption date of each document and amendment.
- Do not propose a bylaw amendment adding a purchase right.
- Separate buyer-information and document review from any approval right in your process.
- Give any questionable clause to counsel before a closing relies on it.
Frequently Asked Questions
Can a New Jersey condo association block a sale by buying the unit first?
Not through a right of first refusal in its master deed or bylaws, under N.J.S.A. 46:8B-38, for documents adopted on or after September 11, 1980.
Does the ban cover gifts and inheritance?
Yes. The text names "resale, gift or devise."
Can bylaws be amended to add the right?
No. The section says no master deed or bylaws, whenever adopted, may be amended on or after the effective date to add one.
Are there any exceptions?
One: the State, its subdivisions and their agencies and authorities, if state or federal law requires the right.
Is there a penalty?
The section states none.
Does this stop an association from reviewing a buyer's documents?
The section does not address that. Ask counsel.
Where This Comes From
We read the full text of N.J.S.A. 46:8B-38 in the 2025 New Jersey Revised Statutes on Justia. We did not read sections 46:8B-32 to -37, so this page does not cover them.
How APM Helps
Association Property Managers provides remote HOA and condo management for associations in New Jersey, starting at a flat $99/month per community with no per-door fees or long-term contracts. See remote management in New Jersey, browse every New Jersey state-law guide, or request a free proposal, delivered within three business days. Laws and licensing rules differ by state, and we confirm the requirements for New Jersey when we build your proposal.
Legal disclaimer: This article is general information, not legal advice. Laws change and associations differ. Confirm the current statute text and how it applies to your governing documents with a licensed New Jersey attorney before acting.
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