New Jersey Retirement Community Full Disclosure Act

This act may be cited as the "Retirement Community Full Disclosure Act."

L.1969, c. 215, s. 1.

For the purposes of this act, the term:

(a) "Retirement subdivision" or "subdivision" 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 subdivision is advertised or represented as a retirement subdivision or as a subdivision primarily for retirees or elderly persons, or where there is a minimum age limit tending to attract persons who are nearing retirement age;

(b) "Retirement community" or "community" means any complex or proposed complex of more than 10 units, whether contained in one or more buildings or whether constructed on separate lots, offered for sale or lease as part of a common promotional plan where such community 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 retirement age;

(c) "Unit" means any apartment or structure intended primarily as a residence and consisting of one or more rooms occupying all or part of a floor or floors in a building of one or more floors or stories, including a single residence dwelling and a share or membership interest of a cooperative housing corporation or association which entitles the holder thereof to possess and occupy for dwelling purposes a house, apartment or other structure owned or leased by said corporation or association, or to lease or purchase a dwelling constructed or to be constructed by said corporation or association;

(d) "Common promotional plan" includes an offer for sale or lease of lots or units in a subdivision or community by a single developer, or a group of developers acting in concert where such lots or units are contiguous, or are known, designated, or advertised as a common entity or by a common name;

(e) "Person" means an individual, or any unincorporated organization, partnership, association, corporation, trust, or estate;

(f) "Developer" means any person who, directly or indirectly, sells or leases, or offers to sell or lease, or advertises for sale or lease any lots in a retirement subdivision or any units in a retirement community;

(g) "Agent" means any person who represents, or acts for or on behalf of, a developer in selling or leasing, or offering to sell or lease, any lot or lots in a retirement subdivision or any units in a retirement community; but shall not include an attorney-at-law whose representation of another person consists solely of rendering legal services;

(h) "State" means the State of New Jersey;

(i) "Purchaser" means an actual or prospective purchaser or lessee of any lot or unit in a subdivision or community;

(j) "Offer" includes any inducement, solicitation, or attempt to encourage a person to acquire a lot or unit in a subdivision or community;

(k) "Disposition" includes sale, lease, assignment, award by lottery, or any other transaction concerning a subdivision or community.

L.1969, c. 215, s. 2. Amended by L.1975, c. 335, s. 1, eff. March 3, 1976.

This act shall be administered by the Division of Housing and Urban Renewal, State Department of Community Affairs, which hereinafter is called the agency.

L.1969, c. 215, s. 3.

Unless the method of disposition is adopted for the purpose of evasion of this act, the provisions of this act do not apply to offers or dispositions of an interest in land by a purchaser of subdivided lands for his own account in a single or isolated transaction; nor shall the provisions of this act apply to the following:

(a) Offers or dispositions of evidences of indebtedness secured by a mortgage or deed of trust of real estate;

(b) Offers or dispositions of securities or units of interest issued by a real estate investment trust regulated under any State or Federal Statute;

(c) The sale or lease of real estate under or pursuant to court order;

(d) A subdivision as to which the agency has granted an exemption as provided in section 11.

(e) Deleted by amendment.

L.1969, c. 215, s. 4. Amended by L.1975, c. 335, s. 2, eff. March 3, 1976.

Unless the retirement subdivisions or community lands or the transaction is exempt by section 4:

(a) No person may offer or dispose of any lot or unit in any retirement subdivision or community located in this State, nor offer or dispose in this State of any lot or unit in any retirement subdivision or community located without this State prior to the time such division or community is registered in the manner prescribed by this act;

(b) No person may dispose of any lot or unit in any retirement subdivision or community unless a current public offering statement is delivered to the purchaser and the purchaser is afforded a reasonable opportunity, under no circumstances less than 48 hours, to examine the public offering statement prior to the disposition.

L.1969, c. 215, s. 5.

(a) A retirement subdivision or community may be registered by filing with the agency, a statement of record containing the following documents and information:

(1) An irrevocable appointment of the agency to receive service of any lawful process in any noncriminal proceeding arising under this act against the developer or his agent;

(2) A legal description of the lands offered for registration as a retirement subdivision of community, together with a map showing the subdivision proposed or made, and the dimensions of the lots, parcels, units or interests and the relation of such lands to existing streets, roads, and other improvements;

(3) The States or jurisdictions, including the Federal Government, in which an application for registration or similar document has been filed, and any adverse order, judgment, or decree entered in connection with the subdivision or community lands by the regulatory authorities in each jurisdiction or by any court;

(4) The applicant's name, address, and the form, date, and jurisdiction of organization; and the address of each of its offices in this State;

(5) The name, address, and principal occupation for the past 5 years of every director and officer of the applicant or person occupying a similar status, performing similar functions or having an interest in the subdivision or community lands; the extent and nature of his interest in the applicant or the subdivision or community lands as of a specified date within 30 days of the filing of the application;

(6) A statement, in a form acceptable to the agency, of the condition of the title to the subdivision or community lands including encumbrances as of a specified date within 30 days of the date of application by a title opinion of a licensed attorney, not a salaried employee, officer or director of the applicant or owner, or by other evidence of title acceptable to the agency;

(7) Copies of the instruments which will be delivered to a purchaser to evidence his interest in the subdivision or community lands and of the contracts and other agreements which a purchaser will be required to agree to or sign;

(8) Copies of the instruments by which the interest in the subdivision or community lands was acquired and a statement of any lien or encumbrance upon the title and copies of the instruments creating the lien or encumbrance, if any, with data as to recording;

(9) If there is a lien or encumbrance affecting more than one lot, parcel, unit or interest, a statement of the consequences for a purchaser of failure to discharge the lien or encumbrance and the steps, if any, taken to protect the purchaser in case of this eventuality;

(10) Copies of instruments creating easements, restrictions, or other encumbrances, affecting the subdivision or community lands;

(11) A statement of the zoning and other governmental regulations affecting the use of the subdivision or community lands and also of any existing tax and existing or proposed special taxes or assessments which affect such lands;

(12) A statement of the existing provisions for access, sewage disposal, water, and other public utilities in the subdivision or community; a statement of the improvements to be installed, the schedule for their completion, and a statement as to the provisions for improvement maintenance;

(13) A narrative description of the promotional plan for the disposition of the subdivision or community lands together with copies of all advertising material which has been prepared for public distribution by and means of communication;

(14) Written assurances that the lands will be offered to the public and that responses to applications will be made without regard to race, creed, or national origin;

(15) The proposed public offering statement;

(16) A current financial statement, which shall include such information concerning the developer as the agency deems to be pertinent, including, but not restricted to, a profit and loss statement certified by an independent public accountant and information concerning any adjudication of bankruptcy against the developer or any principal owning more than 10% of the interests in the subdivision or community at the time of filing;

(17) Any other information which the agency by its rules requires for the protection of purchasers.

(b) At the time of filing a statement of record, or any amendment thereto, the developer shall pay to the agency a fee, not in excess of $25.00, in accordance with a schedule to be fixed by the regulations of the agency, which fees may be used by the agency to defray part of the cost of rendering services under this act.

(c) The filing with the agency of a statement of record, or of an amendment thereto, shall be deemed to have taken place upon the receipt thereof, accompanied by payment of the fee required by subsection (b).

(d) The information contained in or filed with any statement of record shall be made available to the public under such regulations as the agency may prescribe and copies thereof shall be furnished to every applicant at such reasonable charge as the agency may prescribe.

(e) If the developer registers additional subdivision or community lands, he may consolidate the subsequent registration with any earlier registration offering such lands for disposition under the same promotional plan.

(f) The developer shall immediately report any material changes in the information contained in a statement of record.

L.1969, c. 215, s. 6.

(a) A public offering statement shall disclose fully and accurately the physical characteristics of the retirement subdivision or community lands offered and shall make known to prospective purchasers all unusual and material circumstances or features affecting such lands. The proposed public offering statement submitted to the agency shall be in a form prescribed by its rules and shall include the following:

(1) The name and principal address of the developer;

(2) A general description of the subdivision or community lands stating the total number of lots, parcels, units, or interests in the offering;

(3) The significant terms of any encumbrances, easements, liens, and restrictions, including zoning and other regulations affecting such lands and each unit or lot, and a statement of all existing taxes and existing or proposed special taxes or assessments which affect such lands;

(4) A statement of the use for which the property is offered;

(5) Information concerning improvements, including hospitals, health and recreational facilities of any kind, streets, water supply, levees, drainage control systems, irrigation systems, sewage disposal facilities and customary utilities, and the estimated cost, date of completion and responsibility for construction and maintenance of existing and proposed improvements which are referred to in connection with the offering or disposition of any interest in the subdivision or community lands;

(6) Additional information required by the agency to assure full and fair disclosure to prospective purchasers.

(b) The public offering statement shall not be used for any promotional purposes before registration of the retirement subdivision or community lands and afterwards only if it is used in its entirety. No person may advertise or represent that the agency approves or recommends the subdivision lands or disposition thereof. No portion of the public offering statement may be underscored, italicized, or printed in larger or heavier or different color type than the remainder of the statement unless the agency requires or permits it.

(c) The agency may require the developer to alter or amend the proposed public offering statement in order to assure full and fair disclosure to prospective purchasers, and no change in the substance of the promotional plan or plan of disposition or development of the subdivision or community may be made after registration without notifying the agency and without making an appropriate amendment to the public offering statement. A public offering statement is not current unless all amendments are incorporated.

L.1969, c. 215, s. 7.

Upon receipt of a statement of record in proper form, the agency shall forthwith initiate an examination to determine that:

(a) The developer can convey or cause to be conveyed the interest in subdivided lands offered for disposition if the purchaser complies with the terms of the offer, and when appropriate, that release clauses, conveyances in trust or other safeguards have been provided;

(b) There is reasonable assurance that all proposed improvements will be completed as represented;

(c) The advertising material and the general promotional plan are not false, misleading, or discriminatory and comply with the standards prescribed by the agency in its rules and afford full and fair disclosure;

(d) Such subdivider has not, or if a corporation, its officers, directors, and principals have not, been convicted of a crime involving land dispositions or any aspect of the land sales business in this State, the United States, or any other State or foreign country and has not been subject to any injunction or administrative order restraining a false or misleading promotional plan involving land dispositions;

(e) The public offering statement requirements of this act have been satisfied.

L.1969, c. 215, s. 8.

(a) Upon filing of the statement of record in proper form, the agency shall issue a notice of filing to the applicant. Within 10 days from the date of the notice of filing, the agency shall enter an order registering the subdivision or community lands or rejecting the registration. If no order of rejection is entered within 90 days from the date of notice of filing, the land shall be deemed registered unless the applicant has consented in writing to a delay.

(b) If the agency affirmatively determines, upon inquiry and examination, that the requirements of section 8 have been met, it shall enter an order registering the retirement subdivision or community lands and shall designate the form of the public offering statement.

(c) If the agency determines upon inquiry and examination that any of the requirements of section 8 have not been met, the agency shall notify the applicant that the statement of record must be corrected in the particulars specified within 30 days. If the requirements are not met within the time allowed the agency shall enter an order rejecting the registration containing the findings of fact upon which the order is based. The order rejecting the registration shall not become effective for 20 days during which time the applicant may petition for reconsideration and shall be entitled to a hearing upon request.

L.1969, c. 215, s. 9.

(a) Within 30 days after each annual anniversary date of an order registering senior citizens' subdivided lands, the subdivider of such lands shall file a report in the form prescribed by the rules of the agency. The report shall reflect any material changes in information contained in the original statement of record.

(b) The agency at its option may permit the filing of annual reports within 30 days after the anniversary date of the consolidated registration in lieu of the anniversary date of the original registration.

L.1969, c. 215, s. 10.

(a) The agency shall adopt, amend, or repeal such rules and regulations as are reasonably necessary for the enforcement of the provisions of this act, after a public hearing with notice thereof published once in a newspaper or newspapers with Statewide circulation not less than 5 days nor more than 15 days prior to the hearing and mailed to developers not less than 5 days nor more than 15 days prior to the public hearing. The Director of the Division on Aging, State Department of Community Affairs, shall advise the director of the agency concerning the promulgation or alteration of such rules. The rules shall include but not be limited to provisions for advertising standards to assure full and fair disclosure; provisions for escrow or trust agreements or other means reasonably to assure that all improvements referred to in the statement of record and advertising will be completed and that purchasers will receive the interest in land contracted for; provisions for operating procedures; rules of procedure to be followed in the conduct of all hearings; and other rules as are necessary and proper to effect the purpose of this act.

(b) The agency by rule or by an order, after reasonable notice to all developers covered by this act and a hearing, may require the filing of advertising material relating to retirement subdivision and community lands prior to its distribution.

(c) If it appears that a person has engaged or is about to engage in an act or practice constituting a violation of a provision of this act, or a rule or order hereunder, the agency, with or without prior administrative proceedings, may bring an action in the Chancery Division of the State Superior Court to enjoin the acts or practices and to enforce compliance with this act or any rule or order hereunder. Upon proper showing, injunctive relief or temporary restraining orders shall be granted, and a receiver may be appointed. The agency is not required to post a bond in any court proceedings.

(d) The agency may intervene in a suit involving subdivisions or community lands covered by this act. In such suit, the developer shall promptly furnish the agency notice of the suit and copies of all pleadings.

(e) The agency may:

(1) Accept registrations filed in other states or with the Federal Government, or with the Bureau of Securities, within the Division of Consumer Affairs, Department of Law and Public Safety;

(2) Grant exemptions if allowed by rules promulgated under subsection (a);

(3) Contract with similar agencies in this State or other jurisdictions to perform investigative functions;

(4) Accept grants in aid from any source.

(f) The agency shall cooperate with similar agencies in other jurisdictions to establish uniform filing procedures, statements of record and forms, uniform public offering statements, advertising standards, rules and common administrative practices.

L.1969, c. 215, s. 11. Amended by L.1975, c. 335, s. 3, eff. March 3, 1976.

(a) The agency may:

(1) Make necessary public or private investigations within or outside of this State to determine whether any person has violated or is about to violate this act or any rule or order hereunder, or to aid in the enforcement of this act or in the prescribing of rules and forms hereunder;

(2) Require or permit any person to file a statement in writing, under oath or otherwise as the agency determines, as to all the facts and circumstances concerning the matter to be investigated.

(b) For the purpose of any investigation or proceeding under this act, the agency or any officer designated by rule may administer oaths or affirmations, and upon its own motion or upon request of any party shall subpoena witnesses, compel their attendance, take evidence, and require the production of any matter which is relevant to the investigation, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts or any other matter reasonably calculated to lead to the discovery of material evidence.

(c) Upon failure to obey a subpoena or to answer questions propounded by the investigating officer and upon reasonable notice to all persons affected thereby, the agency may apply to Chancery Division of the State Superior Court for an order compelling compliance.

L.1969, c. 215, s. 12.

(a) If the agency determines after notice and hearing that a person has:

(1) Violated any provision of this act;

(2) Directly or through an agent or employee knowingly engaged in any false, deceptive, or misleading advertising, promotional, or sales methods to offer or dispose of an interest in the subdivision or community lands;

(3) Made any substantial change in the plan of disposition and development of the subdivision or community lands subsequent to the order of registration without obtaining prior written approval from the agency;

(4) Disposed of any subdivision or community lands which have not been registered with the agency;

(5) Violated any lawful order or rule of the agency, it may issue an order requiring the person to cease and desist from the unlawful practice and to take such affirmative action as in the judgment of the agency will carry out the purposes of this act.

(b) If the agency makes a finding of fact in writing that the public interest will be irreparably harmed by delay in issuing an order, it may issue a temporary cease and desist order. Prior to issuing a temporary cease and desist order, the agency whenever possible by telephone or otherwise shall give notice of the proposal to issue a temporary cease and desist order to the developer or his agent. Every temporary cease and desist order shall include in its terms a provision that upon request a hearing will be held within 30 days at a place chosen by the agency to determine whether or not it becomes permanent.

L.1969, c. 215, s. 13.

(a) A registration may be revoked after notice and hearing upon a written finding of fact that the developer has:

(1) Failed to comply with the terms of a cease and desist order;

(2) Been convicted in any court subsequent to the filing of the statement of record for registration for a crime involving fraud, deception, false pretenses, misrepresentation, false advertising, or dishonest dealing in real estate transactions;

(3) Disposed of, concealed, or diverted any funds or assets of any person so as to defeat the rights of retirement subdivision or community purchasers;

(4) Failed faithfully to perform any stipulation or agreement made with the agency as an inducement to grant any registration, to reinstate any registration, or to approve any promotional plan or public offering statement;

(5) Advertised his lands or responded to applications for his lands in a manner which was discriminatory on the basis of race, creed, or national origin;

(6) Made intentional misrepresentations or concealed material facts in a statement of record filed for registration. Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings.

(b) If the agency finds after notice and hearing that the developer has been guilty of a violation for which revocation could be ordered, it may issue a cease and desist order instead.

L.1969, c. 215, s. 14.

Any person who willfully violates any provision of this act or of a rule adopted under it or any person who willfully, in a statement of record filed for registration makes any untrue statement of a material fact or omits to state a material fact shall be fined not less than $250.00 or double the amount of gain from the transaction, whichever is the larger but not more than $50,000.00; or he may be imprisoned for not more than 1 year; or both.

L.1969, c. 215, s. 15.

(a) Any person who disposes of retirement subdivision or community lands in violation of section 5, or who in disposing of such lands covered by this act makes an untrue statement of a material fact, or who in disposing of such lands omits a material fact required to be stated in a statement of record or public offering statement or necessary to make the statements made not misleading, is liable as provided in this section to the purchaser unless in the case of an untruth or omission it is proved that the purchaser knew of the untruth or omission or that the person offering or disposing of subdivided lands did not know and in the exercise of reasonable care could not have known of the untruth or omission, or that the purchaser did not rely on the untruth or omission.

(b) In addition to any other remedies, the purchaser, under the preceding subsection, may recover the consideration paid for the lot, parcel, unit or interest in senior citizens' subdivided lands together with interest at the rate of 6% per year from the date of payment, property taxes paid, costs, and reasonable attorneys fees less the amount of any income received from such subdivided lands upon tender of appropriate instruments of reconveyance. If the purchaser no longer owns the lot, parcel, unit or interest in the subdivision or community lands, he may recover the amount that would be recoverable upon a tender of a reconveyance less the market value of the land or property when disposed of and less interest at the rate of 6% per year on that amount from the date of disposition.

(c) Every person who directly or indirectly controls a retirement subdivision or community liable under Subsection (a), every general partner, officer, or director of a developer, every person occupying a similar status or performing a similar function, every employee of the developer who materially aids in the disposition, and every agent who materially aids in the disposition is also liable jointly and severally with and to the same extent as such developer, unless the person otherwise liable sustains the burden of proof that he did not know and in the exercise of reasonable care could not have known of the existence of the facts by reason of which the liability is alleged to exist. There is a right to contribution as in cases of contract among persons so liable.

(d) Every person whose occupation gives authority to a statement which with his consent has been used in a statement of record or public offering statement, if he is not otherwise associated with the developer and development plan in a material way, is liable only for false statements and omissions in his statement and only if he fails to prove that he did not know and in the exercise of the reasonable care of a man in his occupation could not have known of the existence of the facts by reason of which the liability is alleged to exist.

(e) A tender or reconveyance may be made at any time before the entry of judgment.

(f) A person may not recover under this section in actions commenced more than 6 years after his first payment of money to the senior citizens' subdivider in the contested transaction.

(g) Any stipulation or provision purporting to bind any person acquiring retirement subdivision or community lands to waive compliance with this act or any rule or order under it is void.

L.1969, c. 215, s. 16.

Dispositions of subdivision or community lands are subject to this act if:

(a) Such lands offered for disposition are located in this State; or

(b) The developer's principal office is located in this State; or

(c) Any offer or disposition of subdivision or community lands is made in this State, whether or not the seller or purchaser is then present in this State, if the offer originates within this State or is directed by the seller to a person or place in this State and received by the person or at the place to which it is directed.

L.1969, c. 215, s. 17.

In the proceedings for extradition of a person charged with a crime under this act, it need not be shown that the person whose surrender is demanded has fled from justice or at the time of the commission of the crime was in the demanding or other State.

L.1969, c. 215, s. 18.

(a) In addition to the methods of service provided for in the rules governing the New Jersey Courts, service may be made by delivering a copy of the process to the office of the agency, but it is not effective unless the plaintiff, which may be the agency in a proceeding instituted by it:

(1) Forthwith sends a copy of the process and of the pleading by certified mail to the defendant or respondent at his last known address, and

(2) The plaintiff's affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

(b) If any person, including any nonresident of this State, engages in conduct prohibited by this act or any rule or order hereunder, and has not filed a consent to service of process and personal jurisdiction over him cannot otherwise be obtained in this State, that conduct authorizes the agency to receive service of process in any noncriminal proceeding against him or his successor which grows out of that conduct and which is brought under this act or any rule or order hereunder, with the same force and validity as if served on him personally. Notice shall be given as provided in subsection (a).

L.1969, c. 215, s. 19.

If any provision of this act or the application thereof to any person or circumstances are held invalid, the invalidity does not affect other provisions or applications of the act which can be given effect without the invalid provisions or application, and to this end the provisions of this act are severable.

L.1969, c. 215, s. 20.