Master Deed and Bylaws for Condominiums

A condominium development starts as a single property owned by the developer and transitions to a collection of individual properties or specific units. Even then, (i) the fundamental description and character of the overall property remains important to the rights of the unit owners and (ii) since the unit owners have a common right to the areas of the property that are not individually owned (the grounds, hallways, drives, recreational buildings, etc.), a set of basic rules dictating the basic respective rights and obligations of the common owners is required to keep the peace among the common owners.

This character of property raises the need for two basic documents that do not exist in the usual real estate context – the Master Deed and Condominium Association Bylaws. These documents, required by law, form the foundation of how the Condominium Association and the Association’s Board will govern. The better crafted these documents are, the more enjoyable the time in the condominium will be for all owners.

The Master Deed

The Master Deed describes the condominium property and sets the most basic rules in place. The contents of the Master Deed are specified in New Jersey’s Condominium Act and are as follows:

• A basic statement that the land described is governed by the terms of the Condominium Act
• The property’s name for the future, which must include the word “condominium”
• A description of the land and a certified survey showing all units and common areas in their respective locations, stating approximate dimensions, and identifying each unit by number or letter
• The bylaws and voting rights of unit owners
• A description of the common areas
• Each unit’s interest in the common areas (stated as percentages which sum must be 100%)
• How, and in what proportion, common expenses and common surpluses are to be shared
• How the Master Deed can be amended, along with a requirement that amendments be filed in the same office as the original Master Deed to be effective
• The Condominium Association’s name and nature and, if not a corporation, the name and address (within New Jersey) of the agent designated to receive service of process

The Condominium Act also allows any other provision that is consistent with the terms of the law, and gives examples such as restrictions on use or transfer of any unit or on the use of the common areas.

The Bylaws

As with Bylaws of any organization, the Condominium Association Bylaws govern how the Association and its Board will operate. The Condominium Act allows the Bylaws to contain any lawful provision, and specifically requires several, including information about the form of the Association, its officers, and the like. If the Association’s governance will be performed by a Board, the Act requires that the Bylaws provide for open meetings of that Board with enumerated exceptions. Other provisions that must be in the Bylaws are:

• How meetings of unit owners will be called and the rules for quorums and approvals
• How respective shares of expenses and surplus will be collected from or distributed to unit owners
• How the bylaws may be amended, along with a requirement that amendments be filed in the same office as the existing bylaws in order to be effective

The Act specifies several provisions that may be included if desired, such as provisions for waiving notice of meetings, allowing actions to be taken by written agreement rather than meetings, a method for creating and enforcing reasonable rules, and regulations, which may include fines and late fees.

Legal Assistance in Drafting Your Master Deed and Bylaws

The provisions of the Master Deed and Bylaws set the stage for how the condominium community will function. Omitting a required provision or drafting an unclear provision is an invitation to future problems. KingBarnes will ensure that your Master Deed and Bylaws are drafted accordingly.