Q. I live in an adult community in South Jersey for 55-and-older people. It is a single-family fee simple community with an HOA. Our governing documents were amended in 2003 after receiving approval of two-thirds of the members. The governing documents require approval of two-thirds of the owners in order to change any of the governing documents. Our board of trustees is indicating that we need to modernize our governing documents to comply with the Radburn Law. It is my understanding that this only needs to be done if the required votes for change is in excess of two-thirds of the owners. Am I correct, or do our governing documents need to be changed if we currently require two-thirds approval? I believe the board wants to amend the documents to require less than two-thirds of the votes to change documents.
A. “The reader does not indicate whether the question pertains to an amendment to the association’s master deed (sometimes referred to as a ‘declaration’) or the bylaws,” says attorney Martin Cabalar of the Morristown-based firm Becker. “As the reader may be aware, the required approval of the owners to amend the governing documents may differ between the master deed and bylaws. For example, oftentimes the vote required to amend the master deed is two-thirds; whereas, the vote required to amend the bylaws may only be a majority.
“It is common that an association would want to modernize their governing documents to come into compliance with existing or new laws such as the Radburn Act. Generally, where an association’s governing documents are contrary to existing law, the law would control barring some specific exception in the law. The Radburn Act, for example, would supersede anything in your association’s governing documents that was contrary to its requirements.
“The Radburn Act, however, does not automatically reduce a two-thirds requirement to amend the bylaws—assuming that is what the reader’s bylaws require. Rather, it provides that wherever bylaws don’t provide a method for the homeowners to amend the bylaws, or allows amendment of the bylaws with a greater than two-thirds majority, the homeowners have the right to amend the bylaws by a vote of a majority of all owners. In addition, the legislation prohibits a board from amending bylaws without a vote of the owners, except in two specific instances.
“First, it permits a board to amend the bylaws to the extent necessary to render them consistent with state, federal, and local law. This is beneficial since when the law changes in a manner that renders the bylaws inconsistent with law, it may cause confusion among the members and even the board members, because they may not be familiar with new law. Second, the board may propose an amendment to the bylaws and send notice of the proposed amendment to all association members, together with a ballot to reject the proposed amendment. If 10 percent or more of the owners reject the amendment within 30 days, it will be defeated.
“In sum, if the reader’s board wanted to require less than two-thirds vote to amend the bylaws, the board may propose the amendment, send notice to all members together with a ballot to reject, and, if less than 10 percent reject the amendment within 30 days, the proposed amendment would pass. Please keep in mind that this process only applies to the bylaws and not the master deed. Thus, we recommend that you consult with your legal counsel to make sure you are appropriately understanding and applying the requirements of the Radburn Act.”