Does your community association own rental units? If so, then you need to know about the new law that went into effect in New Jersey on November 3, 2022.
Under the new law (N.J.S.A., 40A:10A-1-2), the owner of a rental unit or units or the owner of a business is required to maintain certain liability insurance. The coverage must be for negligent acts and omissions in a minimum amount of $500,000 for combined property damage and bodily injury to or death of one or more persons in any one accident or occurrence.
The law also requires owners of multi-family homes with four or fewer units, one of which is owner-occupied, to have similar insurance in the minimum amount of $300,000. This portion of the law goes into effect on February 1, 2023.
In addition, owners must annually register a certificate of insurance showing proof of this coverage with the town where the business or rental unit is located. The town may charge a reasonable administrative fee for the certificate, as the law authorizes municipalities to do so by enacting an ordinance. Owners who do not comply with the law can be fined $500-$5,000 by the town.
The law applies to all new policies issued after November 3, 2022. It goes into effect on February 1, 2023, for all policies that were in force on August 5, 2022, that are renewed on or after February 1, 2023.
Please feel free to contact our firm If you have questions about this new law or any other legal issues at your association.