New Jersey PREDFDA (N.J.S.A. 45:22A-21): The HOA and Condo Disclosure Act Explained

Quick Answer

The Planned Real Estate Development Full Disclosure Act (PREDFDA), N.J.S.A. 45:22A-21 et seq., is the main New Jersey statute for homeowners' associations. It began in 1977 as a developer registration and disclosure law, and a 1993 supplement (P.L.1993, c.30, N.J.S.A. 45:22A-43 and following) added rules for how associations are organized and run. It reaches condominiums, any form of homeowners' association, and housing cooperatives. The Department of Community Affairs (DCA) enforces it.

At a Glance

What the Law Says

Who is covered

The definition of "planned real estate development" in 45:22A-23(h) covers real property with separately owned areas, "irrespective of form, be it lots, parcels, units, or interest," offered or disposed of under a common promotional plan and providing for common or shared elements. It excludes timesharing, and the statute says the definition "shall be construed liberally to effectuate the purposes of this act."

The developer side

• Under 45:22A-26, unless exempt, no developer may offer or dispose of an interest before registration with the agency, and must deliver a current public offering statement on or before the contract date.
• A purchaser may cancel without cause by written notice "by midnight of the seventh calendar day" after signing.
• Since P.L.2023, c.214, the developer must also make available to prospective purchasers any written report or document prepared under the structural inspection and preventive maintenance sections.
• 45:22A-35 requires the agency to adopt rules, and lists topics including advertising, warranties, and that the budget for common elements "shall provide for adequate reserves for depreciation and replacement of the improvements." The rules are at N.J.A.C. 5:26. We did not review the rule text for this page.

The association side (1993 supplement)

Section 45:22A-43 requires a developer subject to registration to organize an association to manage the common elements, formed "on or before the filing of the master deed or declaration." The 1993 supplement applies to an existing development's association regardless of whether the developer was registered or exempt, and regardless of the date the development was established. Membership is each owner, and may include the developer for unsold units.

The following summarizes the supplement as enacted in P.L.2017, c.106 (confirm current text with counsel):

• The association's form of administration must provide for an elected executive board (45:22A-45).
• Bylaws must require executive board meetings to be open, except working sessions with no binding votes, and the board may exclude or restrict attendance for four categories: individual privacy, pending or anticipated litigation or contract negotiations, attorney-client privileged matters, and matters involving employment or discipline of a specific officer or employee. Minutes must be taken and made available to members before the next open meeting (45:22A-46).
• Developer control ends in stages. Sixty days after 25 percent of units are conveyed, at least 25 percent of the board is elected by owners. At 50 percent, at least 40 percent. At 75 percent, developer control terminates, although the developer may keep one board seat while units remain unsold (45:22A-47).
• Elections have their own section, 45:22A-45.2, and a 2017 findings section, 45:22A-45.1 (see our page on membership and elections).

Specific resident-rights and safety sections

PREDFDA's association chapter also contains separate provisions on the U.S. flag and troop-support displays (45:22A-48.1), EV charging (45:22A-48.4), a corrective maintenance assessment power (45:22A-45a), and reserve study and funding (45:22A-44.2 and 45:22A-44.3). Each is covered on its own page, linked below.

What This Means in Practice

For boards

Your community likely falls under PREDFDA even if it was built long before 1977 or has fewer than 100 units. Section 45:22A-43 says the supplement applies "regardless" of registration status or establishment date, and the 2017 findings say the rights apply "regardless of whether a developer established the community prior to the effective date of PREDFDA." Do not assume your documents alone control elections, meetings or reserves.

DCA is the enforcement body. Several newer sections, such as EV charging, state that the Commissioner of Community Affairs enforces them under 45:22A-38.

For owners

The statute requires an elected executive board and requires the bylaws to provide for open board meetings. Our reading is that bylaw language that conflicts with these statutory minimums does not override them, but confirm with counsel for your situation. This page does not describe DCA's complaint process.

What the law does not say

The act's text does not say that every provision applies to every association in the same way. For example, the election rules distinguish between developments with fewer than 50 units and those with 50 or more, and the reserve study rule exempts associations with under $25,000 in total common area capital assets. Read each section's own scope language.

Timeline

Related New Jersey Law

• Association organization, membership and executive board elections
• Capital reserve study and funding
• Structural inspections and corrective maintenance assessments
• Flags, yellow ribbons and troop-support signs
• EV charging stations
• Assessment liens and priority
• New Jersey HOA laws and regulations overview

Board Checklist

• Confirm whether your community is a "planned real estate development" under 45:22A-23(h).
• Check that bylaws provide for open executive board meetings and the four statutory exceptions, and that minutes are available before the next open meeting.
• Check how executive board elections are run against 45:22A-45.2, based on whether your community has fewer than 50 units or 50 or more.
• If the developer still holds seats, compare the current conveyance percentage with the 25, 50 and 75 percent steps.
• Find out whether a reserve study is required (the $25,000 exemption) and when it was last done.
• List which covered buildings in the community need structural inspections.
• Keep a copy of the current DCA rules at N.J.A.C. 5:26 with the board's governing documents.

Frequently Asked Questions

Does PREDFDA apply to older associations?

Section 45:22A-43 says the 1993 supplement's application to the association of an existing development is not limited by the developer's registration status or the development's date of establishment.

Is a condominium covered by PREDFDA or only the Condominium Act?

Both. PREDFDA's definition of a planned real estate development expressly includes property subject to the Condominium Act.

Who enforces PREDFDA?

The Department of Community Affairs. Under 45:22A-38 the commissioner may levy fines of $250 to $50,000 per violation after a hearing, and under 45:22A-35 the agency may sue in Superior Court for an injunction.

Can a buyer cancel a purchase from a developer?

Under 45:22A-26(b), a purchaser may cancel without cause by written notice by midnight of the seventh calendar day after signing, and any deposit must be promptly refunded in full.

Are tenants members of the association?

Not automatically. Membership is each owner, and under 45:22A-43(c) an association "may permit tenant participation in executive board elections, tenant membership in the association, or both." A tenant's vote is in place of, not in addition to, the owner's.

Can the board close its meetings?

Only for the four categories listed in 45:22A-46 as enacted in 2017, and working sessions at which no binding votes are taken do not have to be open.

Where This Comes From

We read the Revised Statutes text of N.J.S.A. 45:22A-21, 45:22A-23, 45:22A-35, 45:22A-38 and 45:22A-43, and the chaptered texts of P.L.2017, c.106 and P.L.2023, c.214. The 2017 chaptered bill is at pub.njleg.gov. Open meeting and turnover descriptions come from that 2017 text, not from a current codified edition. We did not review the DCA rule text at N.J.A.C. 5:26.

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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.