Generally speaking, all binding decisions of a common interest community and/or homeowners association must be made at governing board meetings open to attendance by all owners. Condominiums are governed in this regard by New Jersey’s Condominium Act (the “Condo Act”), which provides in relevant part, all “meetings of that governing board, except for conference or working sessions at which no binding votes are to be taken, shall be open to attendance by all unit owners”. N.J.S.A. 46:8B-13(a).
Condominiums and HOAs are governed in this regard by New Jersey’s Planned Real Estate Development Full Disclosure Act (“PREDFDA”), which provides in relevant part, that “all meetings of the executive board, except conference or working sessions at which no binding votes are to be taken, shall be open to attendance by all unit owners”. N.J.S.A. 45:22A-46a. In turn, in accordance with the most conservative interpretation of these laws, every decision of a common interest community or homeowners association must be made at a meeting open to attendance of owners.
Condominiums in New Jersey must give notice of meetings which are open to attendance by owners. The Condo Act provides that “adequate notice” of these “open meetings” must be given to “all unit owners in such manner as the bylaws shall prescribe”. In turn, a condominium’s managing agent and governing body must review the particular condominium’s bylaws and/or governing documents regarding whether, and in what form, notice from that condominium to the owners and members is required. While such review is appropriate, New Jersey law imposes strict obligations on condominiums, regardless of what is said in the governing documents, when it comes to providing notice of open meetings.
New Jersey’s current administrative code, N.J.A.C. 5:20-1.2, requires that a condominium provide “adequate notice” of each board meeting at which binding decisions of that board are to be made. This code provision provides that “adequate notice” is “written notice, at least 48 hours in advance, giving the time, date, location and, to the extent known, the agenda of any regular, special, or rescheduled meeting … which notice shall be:
1. Posted prominently in at least one place on the condominium property that is accessible at all times to all unit owners;
2. Mailed, telephone, telegrammed, or hand delivered to at least two newspapers that have been designated by the governing board or by the association to receive such notices because they have the greatest likelihood of informing the greatest number of unit owners; and
3. Filed with the person responsible for administering the business office of the association.”
This provision provides that at “least once each year, within seven days following the annual meeting of the association”, that association “shall post, and maintain posted throughout the year at the place or places at which notices are posted” as above, a “schedule of the regular meetings” of the board to be held that following year. That schedule must contain the meeting’s location (if known) and its time and date. If that schedule is revised, the board must post, mail and submit to the newspapers (as above), that revision within 7 days after the change.
There are several noteworthy details to point out. First, if the condominium posts the schedule as noted above, containing the whole year’s worth of meetings, with location, then none of the 3 provisions listed above are necessary. A list of all meetings, pre-scheduled, is the preferred method of handling this situation. Second, the word “telegrammed”, as used above, can be interpreted as “via e-mail”, given the technological changes that have taken place since this provision was initially adopted in 1991. Third, the provisions only apply to “open” board meetings, not working sessions where votes are not taken. Fourth, the code does not apply to board meetings where binding decisions are made on issues that should remain private (i.e., collections), or where pending or existing litigation, or contract negotiations are made. It also does not apply where communications between the board and legal counsel will occur or where binding decisions regarding the employment, discipline or dismissal of an officer, vendor or employee are made. Fifth, this provision takes precedence if any portion of the condominium’s bylaws or governing documents conflict; however, the bylaws or governing documents can provide more restrictive notice requirements to the condominium without contradicting this code provision. Lastly, this provision applies only to condominiums, not cooperatives, homeowners associations or other forms of common interest community associations.
Neither the Condo Act nor PREDFDA empowers owners in attendance to participate at an “open meeting”. There is nothing in either law that requires a governing board to permit an open session of owners, or permit any involvement by owners at all. In fact, PREDFDA provides in relevant part that at “each meeting required under this subsection to be open to all unit owners, the participation of unit owners in the proceedings or the provision of a public comment session shall be at the discretion of the executive board.” N.J.S.A. 55:22A-46A.
There are exceptions to this “open meeting” general rule, as well as some practical considerations. First, the following types of decisions can be made by a governing board at a meeting closed to the attendance of owners: (1) any matter where the meeting’s disclosure would constitute an unwarranted invasion of individual privacy; (2) any pending or anticipated litigation or contract negotiations; (3) any matters falling within the attorney-client privilege, to the extent that confidentiality is required in order for the attorney to exercise his ethical duties as a lawyer; and, (4) any matter involving the employment, promotion, discipline or dismissal of a specific officer or employee. N.J.S.A. 46:8B-13(a) & N.J.S.A. 45:22A-46a. This includes decisions regarding employees, decisions involved with contract negotiations, decisions on delinquent owner payment plans and/or decisions to settle lawsuits, or decisions to authorize actions in those lawsuits.
Second, it is impractical if not impossible to have each and every decision of a condominium or homeowners association made at a meeting open to attendance of owners. Many decisions are made on a daily basis in order to ensure the proper functioning of that common interest community. Since neither the Condo Act nor PREDFDA require a governing board to allow any owners in attendance to participate, or vote, in the meeting, the “open meeting” requirement ensures notice to (and not involvement of) owners of decisions. In turn, many associations comply with the “open meeting” requirement of both laws, making most decisions at meetings not open to attendance of owners, but then “ratifying” those decisions at the governing board’s next open attendance meeting. A governing board is able to include on the agenda of an open meeting a list of decisions to be “ratified”, and then entertain a motion to “ratify” those decisions. The minutes of the “open meeting” will reference the ratification vote, and even have the list of the ratified decisions attached as an exhibit.
