Bill > A637

Introduced Session

This bill prohibits certain conflicts of interest officers or board members or employees hired to manage the common elements of a homeowners' association. In general, the bill prohibits self-dealing, and is patterned after the public conflicts of interest law. The bill prohibits the awarding of a contract to an entity in which a board member or member of the immediate family of an officer, board member or managing employee has a financial interest. The board may not contract with or engage in any business, transaction, or professional activity, which is in substantial conflict with the proper discharge of duties to the association or in which the officer holds or to a business organization in which the officer or board member holds more than a 5 percent interest or is employed. The bill also prohibits the employment for compensation of an officer or board member, or member of the immediate family of an officer or board member. The bill prohibits an officer or board member to act in an official capacity in any matter where the officer or board member, an immediate family member, or a business organization in which the officer or board member has more than a 5 percent interest, has a direct or indirect financial or personal involvement that might reasonably impair the objectivity or independence of judgment of the officer or board member or is employed by the business organization. The bill designates the Department of Community Affairs to investigate allegations of violations of the bill. If the department finds a violation by a board member or officer, it shall order the removal of the board member or officer, and may declare void any action of the board related to the violation. If the department finds a violation by a managing employee, it is to report the violation to the association. Homeowners' associations are required to be formed pursuant to State statutes. Many have large budgets, but there is currently no State oversight over their budgets or guidelines concerning the avoidance of conflicts of interests that may arise.

AI Summary

Committee Categories

Sean Kean (R)*, 

Introduced, Referred to Assembly Housing Committee (on 01/09/2024)

Official Document