New Jersey bills would stop HOAs charging a transfer fee for a living trust
New Jersey bills would stop HOAs charging a transfer fee for a living trust
2026-09-15 · New Jersey · Legislation · Pending — not yet law
A New Jersey homeowner who moves their condominium into a revocable living trust for estate-planning reasons can be charged a transfer fee by their association, as though they had sold it. Two pending bills would end that.
A2832 was introduced January 13, 2026 by Assemblymen Brian E. Rumpf, Gregory E. Myhre and Alex Sauickie. S791 was introduced the same day by Senator Robert W. Singer.1
What they would do
Placing a unit — or, for a cooperative, the shares and proprietary lease — into a living, revocable trust "shall not constitute a title transfer for purposes of the association charging" membership fees, capital contributions, or transfer fees.
The association could still recover the actual administrative costs of processing the trust transfer.
Why this happens
Because most New Jersey governing documents define the trigger by reference to the recording of a deed, not to a change in beneficial ownership. A transfer into a revocable trust records a deed. The owner remains the settlor, the beneficiary and usually the trustee — nothing about who lives there, who votes, or who pays assessments changes — but the document that triggers the fee has been filed.
The result is a capital contribution or transfer fee, sometimes running to several months' assessments, charged on a transaction with no economic substance.
Who it affects
Overwhelmingly older owners. A revocable living trust is a standard probate-avoidance device, and New Jersey's age-restricted and shore communities are where the concentration is highest — which is presumably why the sponsors are from Ocean and Monmouth counties.
The cooperative provision is the more technically interesting half
In a New Jersey housing cooperative the resident does not own real property. They own shares in the corporation and hold a proprietary lease. Moving those into a trust is not a conveyance of land at all.
Co-op governing documents nonetheless commonly treat any transfer of shares as triggering a flip tax, transfer fee or board approval process — machinery designed for sales, applied to an estate-planning step. The bills reach that expressly, which is a level of drafting care New Jersey community-association legislation does not always show.
"Actual administrative costs" is where the argument would move
The bills preserve recovery of actual costs, and that is the sensible carve-out: someone does have to update the ownership record, re-issue a certificate, and check the trust instrument.
But "actual administrative costs" is undefined, and there is no cap, no schedule and no requirement that the association substantiate the figure. An association inclined to preserve the revenue would find room there, and nothing in the bills constrains it.
Compare New Jersey's approach elsewhere: the residential rental application fee was capped at a specific figure, $50, indexed annually to the CPI, with penalties and an enforcement route. A cost-recovery standard with no number is a different and weaker instrument.
What is not addressed
Three things a board would want to know, and none of them is in the bills.
Whether the association may require a copy of the trust instrument, or a certification of trust, before processing. Whether the trustee assumes the personal obligation for assessments that the individual owner had. And what happens on the way out — a distribution from the trust to a beneficiary on the settlor's death is a genuine change of beneficial ownership, and the bills do not say whether that is a transfer.
These are the questions that generate resale and estoppel disputes, and a statute that answers the easy case and leaves the hard ones to governing documents will produce litigation about the hard ones.
Status
A2832 sits in Assembly Housing; S791 in Senate Community and Urban Affairs. Neither has moved. Both are reintroductions of A3919 and S686 from the 221st Legislature, both of which died; that chain runs back to S3463.
A board asked about this today should know that nothing has changed and that the answer lies in the governing documents — which many boards have discretion under, whatever the fee schedule says.
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