New Jersey P.L.2021, c.379 (N.J.S. 2A:14-1): Defect Claim Tolling for Associations

Quick Answer

New Jersey P.L.2021, c.379 (S396), approved January 18, 2022, added subsection c. to N.J.S.2A:14-1. It says the six-year period for a condominium, cooperative or other planned real estate development association to sue a developer (or anyone acting for the developer) is "tolled until an election is held and the owners comprise a majority of the board." It took effect immediately and also reaches pending claims that had not been dismissed by a final judgment. The practical point: the clock for a defect claim against the developer is tied to the owner-majority board election, not to when the building was finished.

At a Glance

What the Law Says

Subsection a. of N.J.S.2A:14-1 is the general six-year statute for property damage and contract claims: an action "shall be commenced within six years next after the cause of any such action shall have accrued." Subsection c. is the new part. It provides that:

• "The period of time for the filing of a claim by a condominium association, cooperative corporation, or other planned real estate development association against a developer or any person acting through, on behalf of or at the behest of the developer under subsection a. of this section, shall be tolled until an election is held and the owners comprise a majority of the board" under the developer-turnover provisions of N.J.S.A. 45:22A-47(a)(3) or 46:8B-12.1(d).
• Any cause of action involving a condominium, cooperative or other planned real estate development under subsection a. "that has not been subject to a final judgment dismissing the claim" as of the act's effective date "shall be subject to the terms of this subsection."

The first reprint changed the trigger. An earlier version tied tolling to "the date of the transition from developer control." The enacted version ties it to the election at which owners become a board majority.

The two cross-referenced turnover provisions

For condominiums, N.J.S.A. 46:8B-12.1(a) entitles owners other than the developer to elect not less than 25 percent of the board when they own 25 percent of the units, not less than 40 percent at 50 percent conveyed, and all members at 75 percent conveyed (the developer may keep one seat while it holds units for sale in the ordinary course). Subsection (d) says that "prior to, or not more than 60 days after" owners elect a majority, the developer "shall relinquish control" and deliver a list of association property and records, including plans and specifications, warranties and contracts.

For other planned real estate developments, N.J.S.A. 45:22A-47(a) sets the schedule: 60 days after 25 percent of units are conveyed, at least 25 percent of the executive board is owner-elected; after 50 percent, at least 40 percent; and 60 days after 75 percent, the developer's control "shall terminate," though the developer may keep one seat while units remain unsold. Subsection (c) requires delivery of association documents and funds within 60 days of the transition date.

What This Means in Practice

For boards

• The election date is now legally significant. Keep the notice, ballots and certified results of the election at which owners first hold a board majority.
• Our reading: because the statute tolls the period "until" that election, the six-year clock for claims covered by subsection a. is measured from the election, not from earlier events. Whether it starts exactly on the election date or later is not spelled out; confirm with counsel.
• Do not read the tolling as unlimited time. The bill speaks only to the six-year period in subsection a. It does not mention any separate construction statute of repose, and we did not read one. Ask counsel whether any outer limit applies.
• The turnover deliverables in 46:8B-12.1(d) and 45:22A-47(c) (plans, warranties, contracts, records) are the evidence base for a defect claim. Compare what was delivered with the lists.

For owners

The statute applies to claims by the association. It does not describe individual owners' own claims. An owner who believes a building has defects should raise it with the board and ask whether counsel has reviewed the timing.

Pending claims

The retroactive clause covers causes of action not yet dismissed by a final judgment on January 18, 2022. Our reading: a claim already dismissed by final judgment before that date is outside the clause. Whether a particular dismissal is "final" is a legal question for counsel.

Why the Legislature acted

In Palisades at Fort Lee Condominium Association v. 100 Old Palisade, LLC (N.J. 2017), as later courts describe it, the New Jersey Supreme Court rejected an approach under which the six-year period could not accrue before the plaintiff gained full control of the association. We did not read the opinion itself, so we state only that point as reported by citing decisions. Our reading is that the 2022 act, which ties tolling to owner board control, responds to that timing problem. The bill text itself does not mention the case.

What the law does not say

• It does not define "developer" or "any person acting through, on behalf of or at the behest of the developer."
• It does not address claims against parties other than the developer, such as independent contractors not acting for the developer. Open question.
• It does not set a notice or pre-suit requirement.
• It does not state how the "majority of the board" election works where the developer retains a seat. Our reading: the trigger is the election at which owner-elected members are a majority.

Timeline

Related New Jersey Law

• N.J.S.A. 46:8B-12.1, condominium developer control and turnover.
• N.J.S.A. 45:22A-47, surrender of control to owners in planned real estate developments.
• N.J.S.A. 45:22A-47.1 (turnover deliverables added by P.L.2023, c.214); see our page on the structural integrity and reserve law.
• New Jersey HOA laws and regulations, our state overview.

Board Checklist

• Locate the date and records of the election at which owners first became a board majority.
• Gather the turnover deliverables the developer handed over and compare them with the statutory lists.
• Calendar the six-year period with counsel, treating the owner-majority election as the starting reference, and confirm any other limit.
• Commission a licensed engineer or architect review of suspected defects early, so evidence is not lost.
• Preserve warranties, plans, permits, certificates of occupancy and contracts.
• Ask counsel whether any claim was dismissed before January 18, 2022 and whether the new subsection reaches it.
• Report defect issues and counsel advice in board minutes, keeping privileged material in executive session.

Frequently Asked Questions

What did P.L.2021, c.379 change?

It added subsection c. to N.J.S.2A:14-1, tolling the six-year limit for an association's claim against a developer until an election is held and owners comprise a majority of the board.

When did it take effect?

It was approved January 18, 2022 and took effect immediately.

Does it apply to HOAs or only condominiums?

It names condominium associations, cooperative corporations and "other planned real estate development" associations, so it reaches HOAs as well.

Does it apply to lawsuits already filed?

It applies to a cause of action that had not been subject to a final judgment dismissing the claim as of the effective date.

Who counts as the defendant?

A developer or "any person acting through, on behalf of or at the behest of the developer." The act does not define those terms.

Does this extend a statute of repose?

The act does not mention a statute of repose, and we did not read one. Confirm with counsel whether any outer limit applies to your claim.

Does the 2022 law say when the six years start running?

It says the period is tolled "until" the election at which owners comprise a board majority. It does not say more about the exact start day. Confirm with counsel.

Where This Comes From

We read the enacted text of P.L.2021, c.379 (S396, First Reprint) on the New Jersey Legislature's session-law site, pub.njleg.gov, and the current text of N.J.S.A. 46:8B-12.1 and 45:22A-47 as published in the 2025 New Jersey Revised Statutes on Justia. The Palisades decision was not read directly; we know it only through how later court decisions describe it, so this page limits itself to that description.

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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.