New Jersey R.2023 d.087 (N.J.A.C. 5:26-8.9, 8.11): Good Standing and Director Removal

Quick Answer

DCA's 2023 amendments (R.2023 d.087, effective July 17, 2023) changed four rules in the New Jersey association governance package: N.J.A.C. 5:26-8.9 (elections), 8.11 (removals and vacancies), 8.12 (open meetings) and 8.13 (bylaw amendments). The headline topics are how an owner stays "in good standing" to vote, how proxy and absentee ballots are handled, how members can remove an elected director by petition, and a limit on how long owners can access meeting recordings. DCA adopted the changes without change from the proposal, over objections from an industry legislative committee that questioned DCA's authority.

At a Glance

What the Law Says

Reading note: the adoption notice we read includes DCA's summary of comments and responses, but the "full text of the adoption" portion was not available to us. The rule text below is the current published text of each section, which reflects the 2023 amendments. Where we describe what changed, we rely on DCA's responses in the notice.

Good standing and curing arrears (5:26-8.9(l)1v)

In associations with 50 or more units, the association must notify residents who are not in good standing "a minimum of 30 days prior to the election." The notice must state the reason, and that the resident may contest the determination by requesting Alternative Dispute Resolution (ADR). The current text says residents "shall be allowed to rectify their standing up until five business days prior to the election date, unless the association allows for more time."

DCA's response in the notice: the amendment let associations set a timeframe for members to come into good standing, which the rule at 5:26-8.8(c) makes a condition of voting. On a commenter's question, DCA wrote that "at a minimum, residents must be given the opportunity to rectify their standing up to five business days prior to the election," and that associations "may also allow the opportunity to rectify standing up to the day of the election."

For associations under 50 units, the current text of 5:26-8.9(k)4 requires notice at least 14 days before the election to a resident not in good standing, with the same ADR statement. As we read it, that paragraph states no separate cure deadline.

Proxy and absentee ballots (5:26-8.9(l)1iv and 8.9(d))

The election notice must contain a ballot copy. "Unless prohibited by the bylaws of the association, the notice shall include a proxy ballot and an absentee ballot with instructions for returning the ballot." Elsewhere the rule says that if proxies are allowed, absentee ballots must be made available. DCA's response in the notice states that a bylaw prohibiting proxies does not automatically prohibit absentee ballots.

DCA also said in the notice that sample in-person ballots are required under 5:26-8.13(f), and should be clearly identified as samples by the association. (Our reading: the text of 8.13(f) we read concerns bylaw amendment notices, so the sample-ballot cross reference in the notice may refer to a different numbering. Confirm with counsel.)

Umbrella boards (5:26-8.9(j))

Where independent associations share facilities and must sit on a master or umbrella board, the current text says members elect representatives "provided that the members of the executive board of the master or umbrella association also serve as executive members of the independent association's board." In the notice, DCA said the change was needed to align with the Act, which it read to require that a master association board member first have been elected to an independent association's board.

Electronic voting records (5:26-8.9(h))

Electronic election results must be "made available for public review" and open to member inspection for 90 days from the election.

Removal by petition (5:26-8.11(d))

Current text: "Association members may remove a board member who was elected by the unit owners by submitting to the board a petition signed by a minimum of 51 percent of association members for removal of that board member." A special election is to be held within 60 days of receipt of the petition, or at the annual meeting if it falls within 60 days. Notice goes out at least 14 days before.

DCA's stated positions in the notice include:

• It is 51 percent of all members, including members who live in affordable units.
• Each unit has one membership, so "only one signature may be allowed per unit unless the governing documents provide otherwise."
• Anyone signing must be in good standing for the signature to count. The board must check this when it reviews the petition.
• The rule applies regardless of unit count, because it sits in subsection (d), not the 50-or-more-unit subsection (c).
• A removed member can run in the next election.

Meeting recordings (5:26-8.12(f)6)

If a meeting is recorded, members have access to the recording "for 30 days from the date the written minutes are approved," along with the written record. The notice records a commenter who argued 30 days is too short; DCA disagreed and noted owners can request access without waiting for the minutes.

Bylaw recording exemption (5:26-8.13(b)2)

An association "that is not required to file bylaws with the county clerk's office shall not be required to record its bylaws" there, but must give owners a full set of validly adopted bylaws and amendments at closing and have a copy available on request. The notice mentions the Cooperative Recording Act as the reason some cooperatives are exempt; we did not read that statute.

What This Means in Practice

For boards

• Build the good-standing notice into the election calendar: 30 days before the election for associations of 50 or more units, and a cure window that closes no earlier than five business days before the election.
• Decide, and put in writing, whether your association allows owners to cure later, up to the day of the election. The rule permits it.
• Make sure ballot packages follow your bylaws on proxies and absentee ballots.
• Expect that a valid petition signed by 51 percent of members in good standing will trigger a special election process.

For owners

Check your standing early. A resident who has asked for ADR or is in a court proceeding over the dispute may still count as in good standing under 5:26-8.8(c). Petition signatures count only from members in good standing, according to DCA.

Open questions (our reading)

• When does a removed director leave the board? The current text of 8.11(d) says a "special election of the association membership shall be held within 60 days of receipt of the petition." But in the notice, DCA wrote that "immediately upon receipt of a petition signed by 51 percent of members, the board member in question would be removed, and the executive board would have to hold an election to fill their seat." Those two descriptions are not obviously the same, and we read no resolution. Confirm timing with counsel before acting on a petition.
• The commenters cited N.J.S.A. 14A:6-6 and 15A:6-6 (director removal) and argued the petition process conflicts with them. DCA disagreed. We did not read those statutes and do not take a position.
• DCA said it may clarify some language, such as ADR timing, in future rulemaking.

Timeline

Related New Jersey Law

• 2020 governance rules (5:26-8.8 to 8.14)
• N.J.A.C. 5:26 overview
• N.J.S.A. 45:22A-45.2
• P.L.2017, c.106
• New Jersey HOA laws and regulations

Board Checklist

• Send good-standing notices at least 30 days before the election (50 or more units) or 14 days (under 50 units).
• Include the reason and the ADR option in every good-standing notice.
• Accept cures through at least five business days before the election.
• Check ballot packages for proxy and absentee ballot language.
• Keep electronic results available for member inspection for 90 days.
• Have a written process for checking petition signatures against good standing.
• Keep meeting recordings for at least 30 days after minutes approval.
• Ask counsel about the removal timing question before any petition arrives.

Frequently Asked Questions

When did the 2023 DCA election amendments take effect?

July 17, 2023 (R.2023 d.087).

How late can an owner cure arrears and still vote?

The rule says up to five business days before the election "unless the association allows for more time." DCA said associations may allow cures up to the day of the election.

Does a delinquent owner get to contest the determination?

The notice of non-good-standing must state that the resident has the right to contest by requesting ADR.

How many signatures are needed to remove a director?

At least 51 percent of association members, with signatures counted only from members in good standing, according to DCA's notice. One signature per unit unless the governing documents say otherwise.

Does the removal rule apply to small associations?

According to DCA, yes. It applies regardless of unit count.

How long can owners access a meeting recording?

For 30 days from the date the written minutes are approved.

Must every association record its bylaws with the county?

Not if it is not required to file bylaws with the county clerk's office. Those associations must provide owners a full set at closing and on request.

Where This Comes From

We read DCA's adoption notice for R.2023 d.087 (published July 17, 2023), which is available at nj.gov, and the current text of N.J.A.C. 5:26-8.8 through 8.14 as published in a public regulations mirror. The rule text portion of the notice was not available in our copy, so we cannot show a line-by-line comparison of old and new wording.

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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.