Comm. for a Better Twin Rivers v. Twin Rivers Homeowners’ Ass’n: Private Homeowners’ Association Not “State Actor”

<p>New Jersey’s highest court has considered whether state constitutional protections for free speech apply to a private homeowners’ association enforcement of its rules and regulations against fellow homeowners. Click here to read the earlier decision in the case.</p> <p>Twin Rivers (“Development”) is a planned development consisting of condominium duplexes, townhouses, single family homes, and commercial buildings that includes approximately 2,700 residences. The Twin Rivers Homeowners Association (“Association”) has the legal authority to make rules and regulations, and each property has deed covenants requiring the residents to follow the Association rules and pay dues. The Development covers approximately one square mile and has a population of about 10,000. The Development contains commercial areas, schools, a library, a fire department station, and also has Association-managed recreation facilities, such as pools and basketball courts.</p> <p>Committee for a Better Twin Rivers (“Challengers”) is a nonprofit association comprised of Development residents. The Challengers brought a lawsuit against the Association, claiming that the Association failed to allow them to freely express their views; failed to follow state law on the conducting of meetings and allowing residents access to information about the Association; and other relief. Specifically, the Challengers sought to invalidate the Association’s policy limiting the number of signs which could be displayed on the property; challenged the limits on the use of the Association’s community room; and the Challengers also claimed they were denied equal access to the Association’s monthly newspaper.</p> <p>The trial court declined to extend the state’s constitutional protections to residents of the Development, but the appellate reversed the trial court, ruling that the Development’s residents were protected by the state constitution. The Association appealed.</p> <p>The Supreme Court of New Jersey reversed the appellate court and reinstated the judgment from the trial court. The Association argued that most other courts have not allowed the imposition of constitutional obligations on private homeowners’ associations, while the Challengers argued that the appellate court decision should be affirmed.</p> <p>Constitutional law has developed the “state action” doctrine, which allows the enforcement of constitutional rights against private entities when the private entities begin to take on government-like roles for private property that they make available to the public. For example, New Jersey has applied the state actor doctrine to university property, finding that the university had invited outsiders to use its private facilities and so the users were entitled to free speech constitutional protections while using the property. In that case, the court created a test for evaluating whether the state action doctrine applied: first, the nature, purposes, and primary use of the private property; second, the extent and nature of the public’s invitation to use the private property; and finally, the purpose of the expressional activity undertaken upon such property in relation to both the private and public use of the property.</p> <p>Applying the test to this case, the court found that a private homeowners’ association is not subject to the state action doctrine. Looking at the first prong, the court found that the primary use of the Association’s property was residential and the services offered by the Association were to support the residential community, such as maintenance of the roads and trash removal. Since these were primarily private uses of the property, this prong did not support a “state actor” finding.</p> <p>Under the second prong, the court determined that that the Association had not invited the public to use its facilities such as its recreational facilities and so this prong also did not support a finding that the Association had violated the Challengers’ constitutional rights. Finally, the court looked at the expressional activities that the Association limited. The court found that all Association residents had agreed to abide by common rules and regulations, and these rules were not unreasonable. The Association permitted expressional activities such as yard signs; its rules only imposed “time, place, and manner” restrictions on the expressional activities by limiting the number of yard signs and also where the signs could be placed. Thus, the court ruled that the Challengers were not entitled to constitutional protections and so the court reversed the appellate court, reinstating the decision of the trial court.</p> <p>The court did conclude its decision with a discussion of the existing protections for residents of a homeowners’ association. First, the business judgment rule protects residents from arbitrary decisions by the association leadership. Second, New Jersey law imposes certain requirements on homeowners’ associations, including a requirement that the association protect the “health, safety, and general welfare of the residents”. Finally, there are general protections in common law which void unreasonable covenants found in real property deeds.</p> <p>Comm. for a Better Twin Rivers v. Twin Rivers Homeowners’ Ass’n, 192 N.J. 344 (N.J. 2007).</p>