New Jersey P.L.2020, c.100 (S908): Assessments in Pre-PREDFDA Communities and Void Liens

Quick Answer

P.L.2020, c.100 (Senate No. 908, second reprint) was approved September 30, 2020, takes effect immediately and is retroactive to July 13, 2017. It says an association in a community established before the Planned Real Estate Development Full Disclosure Act "shall not be permitted to require property owners to pay assessments and other charges" where the owner's title record does not impose that obligation. Liens recorded after July 13, 2017 that rest solely on a misreading of P.L.2017, c.106 are "null and void" and must be discharged.

At a Glance

What the Law Says

Legislative findings

Section 1 records why the Legislature acted. It finds that "certain associations have interpreted that the provisions of P.L.2017, c.106 ... enacted on July 13, 2017, may impose new responsibilities on certain property owners to pay assessments and other charges to their associations." It declares it necessary "to clarify that P.L.2017, c.106 ... did not impose new responsibilities on property owners to pay assessments and other charges."

The assessment limit

Section 2 a. provides that an association in a community established before PREDFDA's effective date "shall not be permitted to require property owners to pay assessments and other charges where the property owner's title record does not impose such an obligation, unless otherwise provided by law."

PREDFDA is P.L.1977, c.419. The text says "the effective date" of that act, and we did not independently confirm the date; confirm it with counsel if the date matters to your community.

Void liens

Section 2 b. covers liens. If, "after July 13, 2017," an association has recorded a lien against an owner's property for non-payment "that is based solely on the misinterpretation that P.L.2017, c.106 imposed new responsibilities on property owners to pay an association's assessments or other charges," then:

• "the lien shall be null and void";
• the association "shall promptly discharge such lien of record and provide notice of this action to the property owner";
• if the association fails to discharge it, the owner "may bring an action to have the lien discharged"; and
• a successful owner "shall be entitled to petition the court for an award of counsel fees."

Drafting history visible in the reprint

The second reprint shows earlier language that was deleted. The title originally referred to "and election participation," and earlier drafts included a second category for owners whose title record imposed the obligation only on owners who voluntarily joined, and a requirement that an association first get a court order declaring owners to be members. The enacted text contains neither. Those provisions are not law.

What This Means in Practice

For boards of older, historically voluntary associations

The test in the text is the owner's "title record." Our reading: a board should review each owner's deed and recorded covenants before demanding or collecting assessments, and should be cautious about relying on P.L.2017, c.106 as a source of the obligation. Whether another law supplies the obligation falls under the phrase "unless otherwise provided by law," which the statute does not define.

For owners

• If you received a lien after July 13, 2017 that rests only on the 2017 law, this statute declares it void.
• The statute provides notice, discharge and fee-shifting mechanics, but we did not find a deadline for the association to discharge beyond "promptly."

What the law does not say

• It does not define "community established prior to" PREDFDA beyond that phrase.
• It does not state what happens to assessments already paid. The text addresses liens and future requirements, not refunds.
• It does not set a time limit for the owner's action to discharge.
• It does not say when a lien is "based solely" on the misinterpretation. A lien resting on both the 2017 law and a deed covenant is an open question for counsel.

Timeline

Related New Jersey Law

• N.J.S.A. 45:22A-43, association organization and membership
• P.L.2019, c.68, assessment lien priority
• PREDFDA overview
• New Jersey HOA laws and regulations, our state overview

Board Checklist

• Identify whether the community was established before PREDFDA, with counsel's help.
• Pull the recorded deeds and covenants and confirm which owners' title records impose an assessment obligation.
• List any liens recorded since July 13, 2017 and the legal basis for each.
• Ask counsel whether any lien rests solely on the 2017 law, and if so, discharge it and notify the owner.
• Pause collection steps against owners whose title record is silent until counsel reviews.
• Document the basis for each owner's assessment obligation in the collection file.

Frequently Asked Questions

When did P.L.2020, c.100 take effect?

It was approved September 30, 2020, and the act says it "shall take effect immediately and shall be retroactive to July 13, 2017."

Does this law excuse owners from paying assessments?

Only where the community pre-dates PREDFDA and the owner's title record does not impose the obligation, and "unless otherwise provided by law." It does not affect obligations that arise from a recorded deed or other law.

What happens to a lien based on the 2017 law?

If it was recorded after July 13, 2017 and is based solely on the misinterpretation described, it is "null and void" and must be promptly discharged with notice to the owner.

Can the owner recover legal fees?

If the association fails to discharge and the owner sues successfully, the owner may petition for counsel fees.

Did the law make older associations lose their status?

The enacted findings do not say that. An earlier-draft clause about not converting a voluntary association into a planned real estate development was deleted from the final text.

Does a court order have to declare owners members first?

Not under the enacted text. A court-order requirement appeared in an earlier draft and was removed.

Where This Comes From

We read the chaptered text of P.L.2020, c.100 (S908, second reprint) on the New Jersey Legislature's session-law site, pub.njleg.gov. We did not read P.L.2017, c.106 in this batch, later amendments or any court decisions applying c.100.

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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.