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Maple Grove at Piscataway, LLC v. Bureau of Homeowner Protection

OAL Dkt. No. CAF 4971-01, (Bureau of Homeowner Protection BHP- 800-01-5/R-3119B) (Unpublished)

CONDOMINIUMS; DEVELOPERS—Where a developer does not take action to object to or invalidate a condominium association board’s improper adoption of master deed amendments, the developer is obligated to amend its public offering statement to include the amendments as if they were valid.

The New Jersey Department of Community Affairs found that a condominium developer violated the Planned Real Estate Development Full Disclosure Act by failing to amend its public offering statement to incorporate two amendments to a master deed. The two amendments had been adopted by the association’s board after the developer relinquished control. The developer contested the violation and penalty, claiming that the amendments were not duly authorized, as they were not adopted by the association’s executive board at a meeting where a quorum was present. The Administrative Law Judge (ALJ) agreed with the developer’s contention that since the amendments to the master deed were not duly authorized, they were void ab initio and the developer could not be penalized for failing to amend the public offering statement to include them. The Commissioner reversed the ALJ’s decision, concluding that even though the amendments may not have been valid, the developer should have either discharged them or amended its offering statement. The Commission also found that the developer took no action until it was cited for the violation. Further, the developer included the two amendments in its annual report to the Bureau of Homeowner Protection, meaning that it had, in fact, treated the amendments as valid.

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