S2861 1R

An Act concerning discriminatory restrictive covenants in deeds and supplementing Title 46 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. A deed recorded on or after January 1, 2021 shall not contain a reference to the specific portion of a restrictive covenant purporting to restrict the ownership or use of real property as prohibited by section 4 of P.L.1945, c.169 (C.10:5-4) or subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12). A county clerk or a register of deeds and mortgages shall refuse to accept any deed submitted for recordation that references the specific portion of any such restrictive covenant. An attorney or title company preparing or submitting a deed for recordation shall ensure that the specific portion of such a restrictive covenant is not specifically referenced in the deed prior to the deed being submitted for recordation. A deed may include a general provision that states that the deed is subject to any and all covenants of record; however, such provisions shall not apply to the specific portion of a restrictive covenant purporting to restrict the ownership or use of the property as prohibited by section 4 of P.L.1945, c.169 (C.10:5-4) or subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12).

Any deed that is recorded in the land records on or after January 1, 2021 that mistakenly contains such a restrictive covenant shall nevertheless constitute a valid transfer of real property.

2. A restrictive covenant prohibited by section 4 of P.L.1945, c.169 (C.10:5-4) or subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12) may be released by the owner of the real property subject to the restrictive covenant by recording a “Certificate of Release of Certain Prohibited Covenants.” The real property owner may record such a certificate prior to recordation of a deed conveying real property to a purchaser, or when a real property owner discovers that such a prohibited covenant exists and chooses to affirmatively release it. The form of the certificate shall be promulgated by the Administrative Office of the Courts, and shall be available at the county office, or on the website, of the county clerk or register of deeds and mortgages, as appropriate to the county in which the real property is located. There shall be no filing fee, or any other fee, charged to the owner of a real property for the filing of this certificate.

The certificate promulgated by the Administrative Office of the Courts shall conform substantially to the following “Certificate of Release of Certain Prohibited Covenants” format:

CERTIFICATE OF RELEASE OF CERTAIN PROHIBITED COVENANTS

County of Record: ______________

Date of Deed Containing Prohibited Covenant: _______________

Deed Book: ________ Page: _____________

Name(s) of Grantor(s): ____________

Name(s) of Current Owner(s): _________________

Real Property Description: __________________

Brief Description of Prohibited Covenant: _______________

The covenant contained in the above-mentioned deed is released from the above-described real property to the extent that it contains terms purporting to restrict the ownership or use of the property as prohibited in section 4 of P.L.1945, c.169 (C.10:5-4).

The undersigned is/are the legal owners of the property described herein.

Given under my/our hand(s) this ______ day of ____________, 20__.

____________________

(Current Owners)

State of New Jersey

County of _________

Subscribed, sworn to, and acknowledged before me this _____ day of ___________, 20__.

______________________

Notary Public

Notary Registration Number: __________

My Commission Expires: ______________

¹3. a. As used in this section:

“Association” shall mean a homeowners’ or property owners’ association, cooperative corporation, condominium association, or planned community acting through a majority vote of its full board membership; and

“Board” shall mean the governing board of an association.

b. Within 90 days of the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), each board shall review the association’s governing documents to determine whether those documents contain any restriction, covenant, or condition, that prohibits or limits the conveyance, encumbrance, rental, occupancy, or use of real property as prohibited by section 4 of P.L.1945, c.169 (C.10:5-4) or subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12). If an association finds such an unlawful restriction, covenant, or condition in any of those documents, it shall amend the document or documents to remove the restriction, covenant, or condition. Removal of such a restriction, covenant, or condition shall not require approval of the members of the association, notwithstanding any provision of the governing documents to the contrary.

c. If, after the review and amendment of governing documents pursuant to subsection b. of this section has been completed, a board receives a written request from a member of the association to remove from those documents language that the member believes to be an unlawful restriction, covenant, or condition that prohibits or limits the conveyance, encumbrance, rental, occupancy, or use of real property as prohibited by section 4 of P.L.1945, c.169 (C.10:5-4) or subsection g. of section 11 of P.L.1945, c.169 (C.10:5-12), the board shall immediately undertake a review of the document or documents, which review shall be completed within 30 days of the member’s written request. If the board determines that the member is correct, the board shall amend the document or documents to remove the restriction, covenant, or condition within 30 days of its determination.¹

¹[3.] 4.¹ This act shall take effect immediately.