PLANNED REAL ESTATE DEVELOPMENT FULL DISCLOSURE ACT REGULATIONS

N.J.A.C. 5:26 (2014)

§ 5:26-1.1 Introduction
The Planned Real Estate Full Disclosure Act (Chapter 419, P.L. 1977,
N.J.S.A. 45:22A-21et seq.) became effective November 22, 1978. These rules have been adopted to enable the Division of Codes and Standards to implement the Act and to enable owners of property affected to more easily and more fully comply with the requirements of the Act. § 5:26-1.2 Affirmative determination
(a) The Act provides for the issuance of an order of registration upon an affirmative determination of the Division that:
1. The developer can convey or cause to be conveyed the lots, parcels, units or interests offered for disposition, if the purchaser complies with the terms of the offer; and
2. There is reasonable assurance that all proposed improvements can be completed as represented; and
3. The advertising material and the general promotional plan are not false or misleading and comply with the standards prescribed by the Division in subchapter 5 hereof and afford full and fair disclosure; and
4. The developer, its officers and/or principles have not been convicted of a crime involving any aspect of the real estate sales business in this State, the United States, or any other state or foreign country within the past 10 years; and
5. The developer, its officers and/or principals have not been subject to any permanent injunction or
final administrative order restraining a false or misleading plan involving real property disposition, the seriousness of which in the opinion of the Agency warrants the denial of registration; and
6. The public offering statement requirements have been satisfied.
§ 5:26-1.3 Definitions
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise: “Act” means the Planned Real Estate Development Full Disclosure Act, Chapter 419, P.L. 1977, N.J.S.A. 45:22A-21 et seq., as amended; provided, however, that “act” means the Retirement Community Full Disclosure Act, P.L. 1969, c.215 (N.J.S.A. 45:22A-1et seq.) when applied to any portion of a retirement community issued a notice of filing or registered pursuant thereto. “Advertising” means and includes the publication or causing to be published of any information offering for disposition or for the purpose of causing or inducing any other person to purchase an interest in a planned real estate development or retirement community, including the sales contract to be used and any photographs or drawings or artist’s representation of physical conditions or facilities on the property existing or to exist by means of any:
1. Newspaper or periodical;
2. Radio or television broadcast;
3. Written, printed or photographic matter;
4. Billboards or signs;
5. Display of model houses or units;
6. Material used in connection with the disposition or offer of the development by radio, television, telephone or any other electronic means; or
7. Material used by developers or their agents to induce prospective purchasers to visit the development, particularly vacation certificates which require the holders of such certificates to attend or submit to a sales presentation by the developer or his agents. “Advertising” does not mean: Stockholder communication such as annual reports, interim financial re-
ports, proxy materials, registration statements, securities prospectuses, applications for listing securities on stock exchanges, and the like; all communications addressed and relating to the account of any person who has previously executed a contract for the purchase of the developer’s lands, except when directed to
the sale of additional lands.
“Agency” means the Division of Codes and Standards of the State Department of Community Affairs.
“Blanket Encumbrance” means a trust deed, mortgage, judgment or other lien or encumbrance including an option or contract to sell or a trust agreement affecting a development or retirement community of more than one lot, parcel, unit or interest therein, but does not include any lien or other encumbrance arising as the result of the imposition of any tax assessment by any public authority. “Commissioner” means the Commissioner of Community Affairs. “Common promotional plan” means any offer for the disposition of lots, parcels, interests or units of real property by a person or group of persons acting in concert, where such lots, parcels, units or interests are contiguous, or are known, designated or advertised as a common entity or by a common name.
“Conversion” means any change with respect to a real estate development, subdivision, apartment complex or other entity concerned with the ownership, use or management of real property which would make such entity a planned real estate development or retirement community.
“Director” means the Director, Division of Codes and Standards, Department of Community Affairs.
“Disposition” means any sale, contract, lease, assignment, or other transaction concerning a planned real estate development or retirement community.
“Division” means the Division of Codes and Standards, Department of Community Affairs.
“Interest” means any and all rights to use and enjoy any incident of ownership of any part of a planned real estate development or retirement community.
“Material change” means, but is not limited to, any
significant change in the size or character of the development or interest being offered or anything having a significant effect on the rights, duties or obligations
of the developer or purchaser.
“Nonbinding reservation agreement” means an agreement between the developer and a prospective purchaser which may be cancelled without penalty by either party upon written notice at any time prior to the formation of a contract for the disposition of any lot, parcel, unit or interest in a planned real est
ate development or retirement community.
“Offer” means an inducement, solicitation, advertisement, or attempt to encourage a person to acquire
a lot, parcel, unit or interest in a planned real estate development or retirement community.
“Person” shall be defined as in R.S. 1:1-2.
“Planned Real Estate Development” or “development” means any real property situated within this State, whether contiguous or not, which consists of, or will consist of, separately owned areas, irrespective of form, be it lots, parcels, units or interests, and which are offered or disposed of pursuant to a common promotional plan, and providing for common or shared elements or interests in real property. This definition shall include, but not be limited to, “planned unit development” and “planned unit residential development” as defined in the Municipal Land Use Law, P.L. 1975, c. 291 (N.J.S.A. 40:55D-6). This definition shall not include any form of timesharing subject to the New Jersey Real Estate Timeshare Act, P.L. 2006, c. 63. “Purchaser” or “Owner” means any person or persons who acquire a legal or equitable interest in a lot,parcel, unit or interest in a planned real estate development or retirement community and shall be deemed to include a prospective purchaser or prospective owner.
“Retirement Community” means any land which is divided or proposed to be divided into 10 or more lots,whether contiguous or not, for the purpose of sale or lease as part of a common promotional plan where such is advertised or represented as a retirement community or as a community primarily for retirees or elderly persons or where there is a minimum age limit tending to attract persons who are nearing age of retirement, whether located within this State or with out.
“State” means the State of New Jersey.
§ 5:26-1.4 Administration
The Act shall be administered by the Division of Codes and Standards of the State Department of Community Affairs, through the Bureau of Homeowner Protection. All correspondence and inquiries may be addressed to the Bureau of Homeowner Protection, PO Box 805, Trenton, New Jersey 08625-0805.
§ 5:26-2.1 Registration required
Except as otherwise provided in this subchapter,no developer may offer or dispose of any interest in a planned real estate development or retirement community prior to the registration of such planned real estate development or retirement community with the Agency
.
§ 5:26-2.2 Exemptions

(a) Unless the method of disposition is adopted for purposes of evasion, the provisions of these rules shall not apply to offers or dispositions:
1. By an owner for his or her own account in a single or isolated transaction;
2. Wholly for industrial, commercial, or other nonresidential purposes;
3. Pursuant to court order;
4. By the United States, by this State or any of its agencies or political subdivisions;
5. Of real property located without the State;
6. Of cemetery lots or interests;
7. Of less than 100 lots, parcels, units or interests; provided, however, that, with regard to condominiums, cooperatives or retirement communities, this exemption shall not apply, irrespective of the number of lots, parcels, units or interests offered or disposed of;
8. Of developments where the common elements or interests, which would otherwise subject the offering
to the Act, are limited to the provision of unimproved, unencumbered open space;
9. In a development composed wholly of rental units, where the relationship created is one of landlord and tenant;
10. Where the offering is not part of a larger offering and consists of fewer than 10 lots, parcels, units or interests, or where the offering consists entirely of units affordable to persons of low or moderate income, as determined in accordance with the “Fair Housing Act,” P.L. 1985, c.222 (N.J.S.A. 52:27D-301 et seq.), and legally restricted to assure continued affordability in accordance with N.J.A.C. 5:14-4, N.J.A.C. 5:80
-26, and/or N.J.A.C. 5:92-12, or where the Agency otherwise finds that the enforcement of the Act is not necessary in the public interest or for the protection of purchasers by reason of the small amount of the purchase
price, or the limited character of the offering, or the limited nature of the common or shared element
s; provided, however, that as a condition of any exemption granted under this paragraph, the developer shall
disclose to prospective purchasers, in a format accept able to the Agency, such information and documentation
as the Agency may deem appropriate, including, with out limitation, the following:
i. The name, address and telephone number of the developer and of any designated agent;
ii. The total number of units proposed for the entire development and the scheduled completion dates;
iii. The total number of units currently being offered and the date by which the current phase of construction is scheduled to be completed;
iv. The types of units being offered (for example, detached homes, townhouses, apartments, non-residential units) and the number of units being offered in each category;
v. Whether or not there is a flood hazard zone on or adjacent to the site;
vi. Information as to who will control the association and when control by the homeowners will begin;
vii. A statement as to who may use common facilities;

This document is provided as a courtesy only; the official Administrative Rules of the State of NJ are located here:

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