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Bill

S 791

Prohibits common interest communities from penalizing members who place unit into living, revocable trust fund or classifying placement as title transfer.

2026-2027 Regular Session Introduced by Bob Singer

Bars NJ common interest communities from penalizing owners who place units into living revocable trusts or treating such placement as taxable title transfer events.

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee
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Bill Summary · S 791

Legislative bill overview

S 791 prohibits common interest communities (HOAs, condos, co-ops) from charging penalties or fees when unit owners place their property into a living revocable trust, or from treating this action as a title transfer triggering transfer taxes or restrictions. The bill clarifies that establishing a revocable trust is not a taxable conveyance event for community governance purposes.

Why is this important

Revocable trusts are common estate planning tools used to avoid probate and facilitate seamless property transfer to heirs. Without this protection, HOA restrictions could complicate or discourage residents from using trusts, potentially creating barriers to effective estate planning and increasing probate costs for families. This directly affects how property owners can structure their affairs without community penalties.

Potential points of contention

  • HOA revenue concerns: Some communities may argue they lose enforcement leverage or recording mechanisms if trusts bypass standard transfer processes they use to update member rolls and assess compliance
  • Definition ambiguity: "Living revocable trust" may need clearer definition to prevent disputes—does it include irrevocable trusts, land trusts, or only specific trust types?
  • Practical implementation: Communities must update systems to distinguish between trustee changes and ownership changes, which could create administrative burden and potential accounting confusion

Compiled from official sources — confirm details with the bill’s official record.

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