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Bill > A1572
NJ A1572
NJ A1572Prohibits conflict of interests by governing board members or management employees of homeowners' associations.
summary
Introduced
01/13/2026
01/13/2026
In Committee
01/13/2026
01/13/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
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
This bill prohibits officers, board members, and management employees of homeowners' associations (HOAs) from engaging in conflicts of interest, similar to existing laws for public officials. It specifically bans self-dealing, such as awarding contracts to entities where a board member or their immediate family has a financial interest (defined as more than a 5% ownership or employment) or contracting with businesses that substantially conflict with their duties to the HOA. The bill also prevents HOAs from hiring officers, board members, or their immediate family for compensation and prohibits officers or board members from acting on matters where they, their family, or a business they are significantly involved with have a financial or personal stake that could compromise their judgment. Furthermore, it prohibits officers and board members from using their position for personal gain or accepting benefits to influence their decisions. The Department of Community Affairs is tasked with investigating violations; if a violation by an officer or board member is found, they can be removed, and related board actions voided, while violations by managing employees will be reported to the HOA. This legislation aims to provide oversight for HOAs, which often manage significant funds but currently lack state guidelines on avoiding conflicts of interest.
Committee Categories
Housing and Urban Affairs
Sponsors (1)
Last Action
Introduced, Referred to Assembly Housing Committee (on 01/13/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2026/A1572 |
| BillText | https://pub.njleg.gov/Bills/2026/A2000/1572_I1.HTM |
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