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DCA Regulations Positive or Punitive?

DCA Regulations Positive or Punitive?

On June 3, 2019, the New Department of Community Affairs (the “DCA”) proposed regulations that would significantly impact Association governance. Many of you raised concerns with respect to the proposed regulations. 
 
On Monday, May 18, 2020, with few modifications, the proposed regulations became effective. The DCA issued a 112-page document outlining the public comments and the DCA’s responses. That document is available by clicking here: PREDFA Regulations May 18, 2020 The DCA declined requests for hearings on the public comments. 
 
The good news is that, decades before the proposed regulations, most Associations, Board Members and Managers worked hard to provide transparency, member participation and good governance. 
Theoretically, not much should change for them. 
 
The bad news is that, because of the relatively few bad-apple Associations, all Associations, Board Members and Managers are now saddled with micro-regulation backed by the threat of fines and penalties. 
 
It is hard to know where this will lead. Increased transparency, member participation and good governance? I hope so. Increased administrative expenses? Yes. Increased D & O claims? Most likely. Decreased volunteer participation? I hope not. “Wag the dog” politics? Sadly, probably.
 
Let’s be positive and hope that the DCA will, as it historically has done, use a constructive approach rather than a punitive approach to assisting Associations and their members. A lightly marked up copy of the original proposed regulations may be seen by clicking here: Mark-up Copy