New Rules for Notification of Board Meetings Under Radburn

Posted on June 2nd, 2020

In 2017, New Jersey’s legislature amended New Jersey’s Planned Real Estate Development Full Disclosure Act, commonly known as PREDFDA. These amendments have been labeled the “Radburn Amendments”. PREDFDA has always been administered by parts of New Jersey’s Department of Community Affairs (“DCA”). To that end, DCA has adopted regulations it claims are necessary to “implement” and/or “enable” relevant owners to “more easily and fully comply with” the Radburn Amendments. These regulations will likely be known as the “Radburn Regulations”.

The Radburn Regulations expressly address how “notice” of “board meetings” must be done. After the “annual meeting” – which the Radburn Regulations now make mandatory – the association has 7 days to “post, and maintain posted throughout the year, an open meeting schedule of the” board meetings. This annual schedule must identify the “time, date, and locations of each” meeting and be posted in at least 1 location identified by the Radburn Regulations. Any changes to the annual schedule of board meetings “shall be made at least 7 days prior to the scheduled date and posted and maintained” like the original schedule. Even if the association posts this “schedule” it still must give “all members” direct notice of every board meeting at least 7 days prior. This individual notice must also be posted publicly and on any “website and included in any newsletter”. Additionally, the association must provide each notice “personally” to every owner “by mail, hand-delivery, or electronic means”. Lastly, this “notice” must include certain details concerning the board meeting’s time, etc. and agenda details that note particular discussion, action, and reoccurring items. The association must even post a notice of “cancellation at the meeting site”, at a location within the association and on the website if a meeting noted on the overall annual meeting has been canceled.

The Radburn Regulations do allow a board meeting to deal with “matters of such urgency and importance that delay for the purpose of providing 7 days advance notice would” likely result in “substantial harm” if that board “meeting is limited to discussion of, and acting with respect to” the urgent and important matter. In that case, notice must be “provided as soon as possible following the calling of the meeting”. That notice must also be posted publicly, posted on any association “website” (and included in any newsletter), and provided “personally” to every owner “by mail, hand-delivery, or electronic means”. The board must make certain records vis-a-vis this meeting and respect other controls.

Important Information About the New Radburn Regulations & Elections For Associations Consisting of Less than 50 Units

Posted on June 1st, 2020

In 2017, New Jersey’s legislature amended New Jersey’s Planned Real Estate Development Full Disclosure Act, commonly known as PREDFDA. These amendments have been labeled the “Radburn Amendments”. PREDFDA has always been administered by parts of New Jersey’s Department of Community Affairs (“DCA”). To that end, DCA has adopted regulations it claims are necessary to “implement” and/or “enable” relevant owners to “more easily and fully comply with” the Radburn Amendments. These regulations will likely be known as the “Radburn Regulations”.

The Radburn Regulations expressly address “board elections” of associations with fewer than 50 units. The Radburn Regulations govern the use of proxies and absentee ballots by these small associations. If the association utilizes proxies, it must contain certain disclosures. An owner can revoke such a proxy prior to the casting of a vote. If the association utilizes proxies, it “must also make absentee ballots available”. Associations consisting of less than 50 units may permit electronic voting so long as the association can “verify the eligibility of the voters” and “count the ballots in a non-fraudulent and verifiable way”. DCA considers the following to be the “non-fraudulent and verifiable way” to count ballots:

  1. any physical location for ballots must be “secured”;
  2. ballot “tallying” must “occur publicly, with the ballots “open to inspection” for not less than 90 days from the election’s date;
  3. ballots must be “cast in an anonymous manner”; and,
  4. if the bylaws allow, and the particular member agrees, a ballot can be cast “electronically if “it is administered by a neutral 3rd party and anonymity is maintained”.

Because of the Radburn Regulations, associations of less than 50 units must provide a notice of election that includes certain information and be provided within a tight 15-day window. Every owner in “good standing” can nominate himself or another owner in “good standing” to be a candidate for election and “good standing” is the only “criterion” that can be employed concerning a nominee’s eligibility. Owners of these associations must have the chance to review each candidate’s “qualifications”. An association of less than 50 units is not required to allow for “write-in candidates”. Lastly, any owner that the association considers to be not in “good standing” must be notified of that within a specific time frame prior to the election.

Brief Discussion Re: Radburn Regulations, Elections & Associations Consisting of 50+ Units

Posted on May 29th, 2020

In 2017, New Jersey’s legislature amended New Jersey’s Planned Real Estate Development Full Disclosure Act, commonly known as PREDFDA.  These amendments have been labeled the “Radburn Amendments”.  PREDFDA has always been administered by parts of New Jersey’s Department of Community Affairs (“DCA”).  To that end, DCA has adopted regulations it claims are necessary to “implement” and/or “enable” relevant owners to “more easily and fully comply with” the Radburn Amendments. These regulations will likely be known as the “Radburn Regulations”.

The Radburn Regulations expressly address “board elections” of associations with 50+ units.  The Radburn Regulations govern the use of proxies and absentee ballots by these associations.  If the association utilizes proxies, it must contain certain disclosures.  An owner can revoke such a proxy prior to the casting of a vote. If the association utilizes proxies, it “must also make absentee ballots available”. Associations consisting of more than 50 units may permit electronic voting so long as the association can “verify the eligibility of the voters” and “count the ballots in a non-fraudulent and verifiable way”. DCA considers the following to be the “non-fraudulent and verifiable way” to count ballots:  (1) any physical location for ballots must be “secured”; (2) ballot “tallying” must “occur publicly, with the ballots “open to inspection” for not less than 90 days from the election’s date; (3) ballots must be “cast in an anonymous manner”; and, (4) if the bylaws allow, and the particular member agrees, a ballot can be cast “electronically if “it is administered by a neutral 3rd party and anonymity is maintained”.

Because of the Radburn Regulations, associations of 50+ units must employ both a notice soliciting nominations and a notice of the election itself.  The notice soliciting nominations must be provided within a tight 30-day window. Every owner in “good standing” can nominate himself or another owner in “good standing” to be a candidate for election.  Thereafter, owners have at least 14 days, counted from the notice’s mailing, to submit a nomination. “Good standing” is the only “criterion” that can be employed concerning a nominee’s eligibility. The association is prohibited from mailing “ballots or proxies” until at least 1 day has passed since the end of the “nomination period”. After the nomination period expires, each owner is entitled to another election notice, sent by “personal delivery, by mail, or electronically”. Notice by electronic means can be sent only when the owner has agreed to this in writing or when the relevant governing documents permit such notices.  This notice must “contain” a ballot. Also, if the bylaws permit, the notice must also include “an absentee ballot”. If the particular bylaws provide for a “proxy ballot”, an “absentee ballot” has to be there too. Candidates must be listed alphabetically and the “ballot” must “include space for write-in candidates for as many seats as are up for election.” Persons elected as “write-ins” also have to be in “good standing”. Lastly, any owner that the association considers to be not in “good standing” must be notified of that within a specific time frame prior to the election.

Easy Route Available for Resolving Medical Marijuana Facility Delays

Posted on May 22nd, 2020

Ansell Grimm & Aaron PC partner Josh Bauchner recently wrote a guest column for Cannabis Insider addressing issues surrounding the appeal of New Jersey’s 2019 Request for Applications to open medical marijuana facilities. The column, in full, appears below:

In the last issue of Cannabis Insider, a guest columnist purported to offer “several” solutions to the pending appeals of the 2019 RFA process, which actually yielded only two proposals, neither of which are viable.

The first, a settlement, was squarely rejected by the state Department of Health. The second, waiving oral argument, at best expedites resolution by a few weeks, and wholly ignores the appellants’ Constitutional right to due process.

That said, there is a real solution:  The DOH simply could agree to consider all applications on the merits and award licenses to the most qualified candidates. Any allegedly corrupted files would be submitted in hardcopy with a certification that they are the same as in August of 2019. Scoring could begin anew, and we’d be off to the races.

The guest columnist also noted that other applicants are suffering hardship from the delay and, of course, the New Jersey cannabis patient population is suffering the most. To expedite resolution, other applicants could join in requesting that the DOH conduct a merit-based review, perhaps convincing the powers that be that a licensing decision is better than a litigation (confident applicants should have no objection to competition!).

The issues in the appeals are real and cannot be overlooked. The primary issue is whether the DOH acted arbitrarily, capriciously, and unreasonably in disqualifying numerous applicants for a technological issue that rested wholly within the DOH itself — as confirmed by multiple IT experts. In response, the Health Department only offers the contrivance, “No applicants reported any technical issues with the electronic submission to the Department.”

The problem with this assertion is applicants could not have reported problems of which they were entirely unaware. As we all know, the DOH did not tell applicants about the problems, and, consequently, the applicants had no idea there was an issue until the Department belatedly notified them three months later.

Tellingly, the extent of the DOH’s investigation was limited to a single chat session with software maker Adobe. The Adobe representative requested additional information and documents from the DOH for his analysis, but after much delay, the DOH inexplicably replied “[w]e can close the case [because] I don’t think there is anything that we can do further.”

That single chat session represents the entirety of the DOH’s self-proclaimed “investigation” and serves as the sole basis for its self-serving conclusion “that the problem did not rest with the Department.”  The DOH likewise has tellingly failed to:

  1. Produce the IT report upon which it relied in an unsigned and undated internal memorandum regarding the corrupted file issue.
  2. Define exactly what it did to “continuously monitor the online submission system to ensure that it continued to function properly,” or identify who performed this task.
  3. Produce any of the allegedly corrupt files, which are solely in its possession.
  4. Explain why it failed to reach out to the affected applicants in an effort to determine the actual cause of the corrupted files.

Appellants simply request to be included in the general applicant pool for consideration on the merits of their applications, which were, in fact, timely and complete.

This fair request could have been granted over seven months ago — when the DOH discovered its pervasive technological error — but it refused to take a reasonable approach by affording affected applicants a hearing, or to even communicate with them, in order to get to the root of the problem and fix it through resubmission of corrupt files.

Nevertheless, that quick and easy solution remains viable today and is the only real option to address the “hardship” suffered by everyone: appellants, other applicants, and New Jersey patients alike.

Client Alert: Legislative Changes to the Family Leave Act and the WARN Act

Posted on May 4th, 2020

Earlier this month, the New Jersey Legislature made further changes to the state’s labor and employment laws in light of the COVID-19 pandemic.  In particular, the Legislature amended the Family Leave Act and the Millville Dallas Airmotive Plant Job Loss Notification Act (commonly known as the “NJ WARN Act”).  These changes directly impact the rights of both employers and employees throughout the state.  A brief summary is provided below:

 Family Leave Act

On April 14, 2020, Governor Phil Murphy signed Senate Bill S2374 (“S2374”) into law.  Among other things, S2374 amended the New Jersey Family Leave Act to provide job-protected leave when the Governor has declared a state of emergency.  In these circumstances, an employee who needs to care for a family member because of (1) an epidemic of a communicable disease, (2) a known or suspected exposure to a communicable disease, or (3) efforts to prevent the spread of a communicable disease to other members of the community is entitled to twelve (12) weeks of job-protected leave. 

The Family Leave Act defines a “family member” to mean “a child, parent, parent-in-law, sibling, grandparent, grandchild, spouse, domestic partner, or one partner in a civil union couple, or any other individual related by blood to the employee, and any other individual that the employee shows to have a close association with the employee which is the equivalent of a family relationship.”

While the Family Leave Act normally allows an employer to deny leave to the highest-paid 5% of its employees, or the seven highest paid employees (whichever is greater), subject to certain conditions being met, this exemption is suspended when the Governor declares a state of emergency and the leave requested is for one of the three reasons set forth above.  In addition, an employee may take intermittent leave for epidemic-related reasons without the employer’s consent so long as the employee (1) provides prior notice to the employer as soon as practicable and (2) makes a reasonable effort to not unduly disrupt the employer’s business operations.

The amendments to the New Jersey Family Leave Act contained within S2374 went into effect immediately and are retroactive to March 25, 2020.

NJ WARN Act

In 2019, the Legislature amended the NJ Warn Act to require that covered employers pay severance to employees that are terminated in connection with a covered event (the “2019 Amendment”).  The 2019 Amendment was scheduled to become effective on July 19, 2020.

In light of the pandemic, the Governor signed S2353 into law on April 14, 2020.  S2353 delays the effective date of the 2019 Amendment from July 19, 2020, until ninety (90) days following the termination of Executive Order 103 of 2020, wherein the Governor declared a state of emergency and a public health emergency.  At the time of publication, the Governor has indicated Executive Order 103 will not be terminated before May 15, 2020 and, therefore, the 2019 Amendment to the NJ WARN Act will not go into effect until August 15, 2020, at the earliest.

S2353 also amended the definition of a “mass layoff” to exclude layoffs “made necessary because of a fire, natural disaster, national emergency, act of war, civil disorder[,] or industrial sabotage[.]”  The definitional change is retroactive to March 9, 2020.

Business Delayed is Business Denied for Potential Cannabis Licensees

Posted on May 4th, 2020

According to a recent report in the NJCannabis Insider (subscription required) applicants from the 2019 Request for Applications for medical cannabis licensing denied due to corruption of their online applications continue to await their day in court.

Josh Bauchner, an attorney with Ansell Grimm & Aaron PC representing several clients who were disqualified from the RFA, told NJCannabis Insider the state made it clear it had no intention of settling the case despite concerns from the presiding judge that further delays may cause serious harm to medical cannabis patients.

Bauchner’s pursuing redress for his clients due to data corruption of the PDF version of their applications based on the belief that the corruption was due to problems with the Department of Health’s online submission portal or the PDF files obtained from the DOH.

He noted that his clients have been placed at a significant disadvantage in the marketplace, as the existing and subsequently successful licenses have been able to move forward developing their business while those denied will still require significant time to become operational.

“This could all be fixed with a pen stroke,” Bauchner told NJCannabis Insider. “Someone in leadership in Trenton, all they have to do is say, ‘Permit people to resubmit their applications and restart scoring.’ You could probably award these licenses in 30 days.”

 

Trade Group Calls on Ansell.Law to Address Legal Concerns Relating to COVID-19

Posted on April 27th, 2020

The unprecedented events and dynamic changes necessitated as a response to COVID-19 have left many businesses grasping for a way to get a handle on the current situation. The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) turned to Ansell Grimm & Aaron PC’s Joshua Bauchner and Rahool Patel to get some guidance.

 The attorneys conducted a virtual discussion with the trade group addressing various issues and responding to members’ inquiries regarding the CARES Act, the Paycheck Protection Program (PPP), and insurance and landlord/tenant concerns.

 The effort was well received and recently written up in the latest issue of Body Shop Business, the industry’s trade journal.

 “Because of the many complicated requirements that must be met on the applications, I strongly recommend that members obtain the assistance of professionals like the people from Ansell Grimm & Aaron, PC rather than deal with it on their own,” AASP/NJ Executive Director Charles Bryant, told the publication.

 The Ansell Grimm & Aaron COVID-19 Task Force will be conducting a free small business webinar on Thursday, April 30 at 11 a.m.

 Topics will include:

  •       New and pending legislation
  •       PPP program
  •       Lease obligations
  •       Insurance claims
  •       Employee concerns

 To join the meeting via Zoom:

 Meeting ID: 953  0659  1428

Password: 020438

Client Alert: The CARE Act – Paycheck Protection Plan Updates

Posted on April 24th, 2020

On April 3, 2020, the federal government unveiled the Paycheck Protection Plan (PPP), an undertaking intended to assist small businesses through the COVID-19 pandemic by providing them loans, and at the same time, incentivizing keeping employees on the payroll.

What Businesses Qualify for Loans?

The loans are available from existing SBA lenders to businesses with 500 or fewer employees starting April 3, 2020, although businesses with more than 500 employees in particular industries are potentially eligible if they meet the SBA’s size standards for those industries. Included are sole proprietorships, independent contractors, self-employed individuals (although they only can apply for loans beginning April 10, 2020), and private non-profit organizations or 501(c)(19) veterans organizations affected by COVID-19.  Additionally, small businesses in the hospitality and food industry with multiple locations also might be eligible if their individual locations employ less than 500 employees.

Loan Terms and Forgiveness

The PPP loans are on a first-come, first-served basis in an amount up to two months of the average monthly payroll costs for 2019 with a $10 million cap. The interest rate is fixed at 1% for a two year term with all loan payments deferred for 6 month, though interest will continue to accrue over this period. There is no collateral or personal guarantees required and neither the government nor the lenders will charge small businesses any fees. Other terms and conditions of loans continue to be worked out between lenders and the government so it is recommended that employers continue to follow updates. So long as employees remain on the payroll for eight (8) weeks and the loan proceeds are used for payroll, rent, mortgage interest, or utilities, the SBA will forgive the loans. However, due to the likelihood of high subscription, at least 75% of the forgiven amount must have been used for payroll. If employers decrease the number of full-time employees, or decrease salaries and wages by over 25% for any employee making less than $100,000 annually in 2019, the amount of loan forgiveness will be reduced.

Basically, there is no real downside to receiving a loan through this program, but employers should be diligent in keeping accurate records of how loan proceeds are being spent over the term of the loan; specifically, the amount of the loan being used for the various payroll costs.

What Records Should Employers Collect to Apply for a Loan?

In order to seek a loan, employers should obtain records of:  (i) their complete 2019 payroll; (ii) their 2019 independent contractor costs; (iii) their payroll report as of February 15, 2019 or closest date thereafter; (iv) four 2019 quarterly 941 payroll returns; (v) twelve monthly payroll summaries by employee and company totals for April 2019 through March 2020; (vi) proof of health insurance premiums and retirement plan contributions paid by the company from April 2019 through March 2020; and (vii) a fully initialed and signed federal PPP loan application.

_________________________________
The information provided in this alert was up-to-date at the time of publication, is provided for general purposes only and does not constitute legal advice, and the transmission and receipt of this information does not create or constitute an attorney-client relationship.

Client Alert: Coronavirus (COVID-19) and Business Interruption Claims

Posted on April 13th, 2020

Numerous companies are facing dramatic and unprecedented circumstances as a result of the COVID-19 pandemic. To stay afloat, businesses are being forced to reduce their staffing at varying levels, decrease employee hours and salaries, and unfortunately, in many instances, eliminate staff altogether. In fact, in many states, including New Jersey, businesses deemed “non-essential” have been shut down, inevitably resulting in loss of income to affected businesses. This has led to businesses exploring all avenues to recover losses, including business interruption insurance coverage under their commercial insurance policies.

 

What is Business Interruption Insurance?

Business interruption insurance, also referred to as business income insurance, is a type of insurance that assists in covering lost income due to the disruption of business operations. Common disruptions covered by business interruption coverage include events such as fire, hurricanes, broken water pipes, wind, lightning and earthquakes. Under certain circumstances, business interruption insurance may provide coverage for suspended operations of a business based on an order of or determination by a civil authority resulting in access to the insurance holder’s premises. Lost income is generally defined as the income a business would have realized through its normal operations but for the business being disrupted, including operating expenses and payroll.

 

Does Business Interruption Insurance Provide Coverage Due to Loss of Business Income Due to COVID-19?

Business Interruption Insurance coverage is based on the language contained in commercial insurance policies, which can vary from one policy to the next, as well as the law governing the interpretation of the applicable policy provisions. Those perils specifically enumerated in the policy for which coverage is afforded will provide the basis for any such determination. In order to determine whether business interruption coverage is available under the employer’s policy for COVID-19, particular attention should be paid to such issues as whether the business voluntarily imposed restrictions resulting in income loss, whether the business was closed due to local, state or federal order or whether the business was permitted to remain in operation on a limited basis subject to restrictions. The policy might also contain a virus exclusion provision, so it is important to review the policy for any such provision to determine how it might affect coverage determinations.

 

What Steps Should Employers Take to Determine Whether They Have Coverage for Business Interruption?

Since coverage will be guided by the company’s commercial insurance policy, it is essential to carefully review the policy, and it is highly recommended that the companies consult with legal counsel in order to determine whether filing a claim for business interruption is an option.

_________________________________________

The information provided in this alert was up-to-date at the time of publication, is provided for general purposes only and does not constitute legal advice, and the transmission and receipt of this information does not create or constitute an attorney-client relationship.