Thomas C. Martin, Esq.
Nowell Amoroso Klein Bierman, P.A., Chair, CAI-NJ Legislative Action Committee
Generally speaking, residential common ownership interest associations are non-profit corporations organized and existing under the laws of their particular state. As such, these corporations are governed by an elected board of directors. The elected board of directors then engages in the familiar decision making process of weighing and balancing any given number of options, decisions and courses of action. The board of directors, in turn, has a right to rely upon its professionals for guidance in this field. For example, the board members may rely on advice provided by its managing agent, its legal counsel, its accountant, its insurance agent and others. The board also has every right to consider and rely upon contractors, tradesman and other kinds of service providers. This kind of reliance can be one of the hallmarks which insulate the individual volunteer board members from potential and ill-conceived lawsuits.
In particular, and as we raised in the prior month’s column, the current issues of disclosure and transparency in this significant decision making process are critical to an elected board of directors to make decisions on all of the available information. After all, the unit owners and the board members all want the same thing, that is, to protect and preserve the association in general and the equity of the unit owners in particular.
It is preserving the integrity of the decision making process which has given rise to the conflicts of interest bill we mentioned in our prior column. The bill itself seeks to mandate the kind of openness and disclosure we would all expect from elected board members. This is true not only for our common ownership interest association non-profit corporations, but also Fortune 500 for profit corporations.
We will continue to keep you updated in the progress of this cutting edge legislation in New Jersey as it continues to work its way through Trenton.
On the regional front, the New Jersey Chapter of the Community Associations Institute is pleased to be sending a delegation to the Council of State Governments, Eastern Regional Conference located conveniently this year in Atlantic City on July 20 – 23, 2012. If you wish to consider attending or for more information, you may please feel free to visit their website at CSGEAST.org.
Closer to home, the members of the Legislative Action Committee are closely monitoring pending bills which would appear to have a potentially adverse impact to our membership. For example, and among other proposed bills, there seems to be a set of never ending tinkering and adjusting at the state house on bills affecting the relationship between common ownership interest associations and the municipal entities in which they are situated. Even seemingly small and apparently innocuous changes can have a great and substantial impact on our membership. It can seem like a constant battle to look out for last minute changes and floor amendments in this regard. Nevertheless, we make every effort to protect the interests of the membership in Trenton.
Finally, as we indicated in last month’s column, there continues to be efforts to foist certain specific costs of compliance with federal law with regard to housing for some unit upon all of the unit owners. Instead, we are working to make sure the costs of compliance are to be bourn by the affected parties and not unfairly pushed over to the other unit owners.
In closing, now that we all recently completed our taxes, “Congress shall also create a tax code weighing more than the combined poundage of the largest member of the House and the largest member of the Senate, plus a standard musk ox.” Dave Barry.
