January 1, 1900

by Michael S. Karpoff

New Jersey’s courts have essentially established that members of the public have no right to express themselves in private communities which have not invited public access. However, the courts had been silent on what speech rights community members have-until now. In Committee for a Better Twin Rivers v. Twin Rivers Homeowners Association, the court considered the rights of Association members to obtain information about and to express themselves on Association matters. The case is presently on appeal, so there has not yet been a final determination, but the trial court’s rulings can provide guidance to association governing boards.

Twin Rivers is a planned development which includes 2,700 residences with 10,000 occupants. The Twin Rivers Community Trust owns the common property, and the Twin Rivers Homeowners Association, through its Board of Directors, governs the use of the common property. The plaintiffs challenged a number of the Association's regulations and practices. Conceding that the U.S. Constitution's First Amendment does not control on private property, the plaintiffs relied primarily upon New Jersey's state constitutional free speech clause, which grants broader rights than the First Amendment.

Court Rejected Constitutional Claims

Plaintiffs argued that Twin Rivers is similar to a town and therefore should be subject to the constitutional protections. The court concluded, however, that Twin Rivers is neither a state actor nor an arm of municipal government; so, in general, it is not subject to state constitutional limitations. On the other hand, the court held that although Twin Rivers was created before the adoption of the Planned Real Estate Development Full Disclosure Act for a meeting and permitting the (PREDFDA), it is subject to the statute’s 1993 amendments.

The Court then considered each of the plaintiff's specified claims. First, the plaintiff's challenged the Association's policy on posting signs, which limits residents to one sign in a window and one sign in the garden bed no more than three feet from the residence. The plaintiffs claimed that this policy violates their free speech by restricting the number and location of signs, particularly political signs.

The court found that the relationship between the homeowners and the Association is contractual, as set forth in the covenants in the governing documents and deeds. Such covenants will be upheld if they are reasonable. The court determined that the sign policy was reasonable and therefore enforceable. Furthermore, because the property is private, no public interest is affected by the sign policy, so constitutional provisions do not apply. The court also rejected the argument that the restrictions are a "contract of adhesion" which plaintiffs had no ability to negotiate. The court noted that contracts of adhesion are overturned only if the terms are unconscionable, but the Twin Rivers sign policy is not unconscionable.

Fees for Use of Community Room Upheld

The Association publishes a monthly newsletter, Twin Rivers Today, which is distributed to the residents. The newsletter contains articles about Twin Rivers, a president’s message, and letters to the editor. The plaintiffs complained that they were denied equal access to Twin Rivers Today because the president of the Association, who also was the editor, allegedly used the newsletter to advance his own views and to criticize them and placed their responses in positions of lesser prominence. The court rejected that argument, stating that as long as the newsletter prints opposing viewpoints, its editors retain discretion on the actual content and placement of articles.

Disclosure of Documents and Information Subject to Reasonable Rules

Another subject of plaintiffs’ complaint concerned the Association’s policies regarding disclosure of information. As a result of an earlier lawsuit, the Association had adopted standards for disclosing documents requested by unit owners. The plaintiffs argued that the policy denies access to documents to which they are entitled. The court found the policy to be valid because it is within the authority of the Board and contains sufficient standards.

The Board also had adopted a resolution concerning confidentiality of certain Board matters and subsequently censured one of the plaintiffs, a Board member, for violating that resolution. Plaintiffs argued that the Board exceeded its authority in determining what subjects were confidential. The court referred to an opinion by an official of the Department of Community Affairs which disagreed with the Board’s position but ultimately ruled that the resolution was unenforceable because it contained no standards as to confidentiality.

Association members may obtain a copy of the membership list, but only if they sign an agreement to keep the list confidential. The agreement required a member to pay liquidated damages of at least $1,000.00 if he or she breached the agreement. The plaintiffs sought to invalidate these requirements. The court approved the confidentiality requirement as reasonable but voided the liquidated damages clause because there was no showing that the amount was reasonably related to actual damages.

ADR Procedures Approved

Twin Rivers established a procedure for alternative dispute resolution (ADR). The rule requires the party requesting ADR to submit a $150.00 deposit but splits the costs equally between the parties. The rule exempts three types of disputes from ADR: disputes over common expense assessments, election issues, and issues of compliance with the governing documents or applicable law. Plaintiffs sought to void the ADR rule on the grounds that the cost is too high, and that it improperly excludes matters, contrary to PREDFDA. The court found the ADR provision to be valid.

Finally, the plaintiffs argued that Twin Rivers’ voting formulation, based upon the respective value of the units, is constitutionally unsound. They also claimed that a rule prohibiting owners who are delinquent in paying assessments or fines from voting is improper. Plaintiffs asked the court to impose a requirement of one vote per unit, including tenants. The court rejected this claim, finding that the owners had consented to the voting scheme by taking title subject to the governing documents, and that tenants have no right to vote since they are not members of the Association.

Owners’ Speech Balanced Against Association’s Responsibilities

In summary, the court held that since Twin Rivers has not opened itself to public access and is not an arm of municipal government, the Association’s actions are not subject to state constitutional guarantees. Rather, the Association’s regulations must be judged on whether they are authorized by the governing documents and state law, whether they reasonably achieve permitted objectives, and whether there are sufficient guidelines to prevent arbitrary action. Governing boards must act in good faith, without fraud or self-dealing and must allow unit owners reasonable opportunities to express themselves regarding association matters. As long as they act in such a manner, the courts will allow them discretion.

Thus, the Committee for a Better Twin Rivers case presently stands for the proposition that although constitutional provisions do not apply to private communities which do not invite public speech, unit owners do have certain rights of expression. Those rights are subject to reasonable limitations so that they do not interfere unduly with the rights of other members, the functioning of the association, or the ability of the association to fulfill its purposes. However, the plaintiffs have appealed the court’s decision, so the final word on members’ speech rights has not yet been spoken.

Michael S. Karpoff is a partner in the Community Association Law Practice Group. He is a member of the National College of Community Association Lawyers of the Community Associations Institute (CAI).