Radburn residents who have been battling for years to have a greater say in the governance of their planned community, gained ground earlier this month when new by-laws that would have undermined their voting rights were thrown out by the state.
The NJ Department of Community Affairs (DCA) on March 2 notified the Radburn Association board that amendments it approved last May were invalid because they were never filed with the county clerk, as required by state law. As a result, Radburn members get to elect four trustees to the nine-member board rather than the two that would have been allowed under the by-law changes.
In addition, the DCA letter put a hold on the ability of developers to cast 165 votes in trustee elections–-one vote for each of the units they are building as part of the Crossings at Radburn project–-“until DCA or the courts have approved the By-laws for Radburn.” Those 165 votes would represent roughly 23 % of the total and if voted by the developers, would significantly dilute the voting power of people who actually live there, especially combined with a new requirement that trustees be elected by a two-thirds of all members, rather than two-thirds of those present and voting.
The developers, Pulte Homes and Bergen Development Group, agreed not to cast the votes in light of the DCA’s determination that the by-laws giving them those votes violate PREDFDA, or Planned Real Estate Development Full Disclosure Act, the law governing planned communities in NJ, which the DCA is charged with enforcing.
The DCA acted in response to a complaint filed with it in January by Radburn United, a self-government advocacy group represented by NJ Appleseed.
According to the complaint, a group of insiders, so-called “Original Members,”who have been running Radburn for decades, rushed through sweeping changes to the by-laws in an attempt to to circumvent 2017 revisions to PREDFDA that bolster voting participation rights in common interest communities. They allegedly sought to preserve their own power and “slow down the democratic and legally required transition to a board that would be elected under the provisions of the new legislation.”
Founded in 1929 as one of the first planned communities in the United States and the first in New Jersey, Radburn is a private, unincorporated association within Fair Lawn, with some 3,000 people living in a mixture of single-family homes, townhouses, two-family houses, and an apartment complex.
The small group running Radburn had argued in the past that because the community predates PREDFDA, which was first enacted in 1977, the law did not apply. The New Jersey Appellate Division has twice rejected that view and held that PREDFDA has retroactive effect, The court most recently did so in Moore v. Radburn Association (2009), where NJ Appleseed was the lawyer for the plaintiffs, 16 residents of Radburn.
The 2017 bill amending PREDFDA, S-2492, was sponsored by Senator Robert Gordon, who represents Fair Lawn. It passed the Legislature unanimously in May and was signed into law on July 13. The legislation took note of the fact that more than one million New Jersey residents currently live under the governance of a common interest community association. So how PREDFDA is applied and enforced in Radburn is likely to have widespread repercussions.
Among other provisions, the legislation established that all unit owners in planned communities are members of the association and provided basic election protection rights, including the right of owners to nominate themselves or other owners as board candidates.
The Radburn by-law amendments adopted in May were prepared in secret and without any notice or input to the community and even some of the trustees who approved them were not informed beforehand about the votes being handed to the developers, says the complaint.
Other problematic amendments mentioned in the complaint are:
a decrease from two to one of the votes allocated to each owned residence;
the disenfranchisement of tenants, who lost their 93 votes, replaced by a single vote allocated to the owner of their 93-unit apartment complex;
an increase from five to seven trustee votes needed in order to amend the by-laws; and
a reduction in the annual rotation of trustee seats from four to two, while granting the current board president power to extend the terms of current trustees.
On top of the disputed by-law changes, the complaint asserted that the Radburn board was being operated so as to evade accountability under PRDFDA. For example, the board regularly conducts business in closed sessions or through committees, without full board votes; fails to call member meetings; and restricts homeowners rights to access financial records.
Although the DCA action is a positive development, the entrenched powers in Radburn appear to be still resisting compliance with the law.
Thus far, the board president has not called a board meeting to discuss how to respond to the DCA letter. Three trustees have requested one but the board president has ignored their request, in violation of the by-laws.
And an already overdue trustee election was called off and has not been rescheduled.
Photograph above is from Wikipedia.