While a "Deed Restricted" community is desirable for many potential
homebuyers, there are some sticky points you should consider before agreeing to all the covenants and restrictions. We discovered the following report from
RealtyTimes.com.
Homeowners who live in a common interest development and are subject to CC&Rs and rules adopted by the
HOA (Homeowner Association) are still American citizens (assuming they were to begin with). They don't give up their rights of free speech, do they? They can say whatever they want, wherever they want, however they want, right? Well, maybe not.
Both residents of common interest developments,
HOA directors, and their management companies will want to pay special attention to a recent ruling by the New Jersey Supreme Court. While, technically, the ruling only applies within the state of New Jersey, it is liable to have considerable influence elsewhere.
The case (Committee for a Better Twin Rivers v. Twin Rivers Homeowners Association) arose out of a dispute between certain residents of the Twin Rivers development and the governing homeowners association. These residents (the Committee) brought a lawsuit against the
HOA claiming that it had failed to allow them to freely express their views. One count of the complaint "sought to invalidate the Association's policy relating to the posting of signs. The Association's sign policy provided that residents may post a sign in any window of their residence and outside in the flower beds so long as the sign was not more than three feet from the residence." Only one sign per lawn and per window were permitted. No signs were permitted on utility poles or natural features (e.g. trees) within the community. The stated purpose of the sign rules was, among other things, "to preserve the aesthetic value of the common areas."
Other complaints related to the association's alleged restrictive use of the development's community room, and to access restrictions to the community newsletter.
A trial court noted that "the Association asserted considerable influence on the lives of the [development] residents," but it observed that much of the impact "was a function of the contractual relationship that residents entered into when they elected to purchase property [there]." It found that the rules with respect to signs were reasonable and enforceable.
An appellate court then reversed the trial court, holding that "the Association was subject to state constitutional standards with respect to its internal rules and regulations." That is, it held that the residents' free speech rights had been unduly curtailed. Then the Association appealed.
The New Jersey Supreme court reversed the ruling of the appellate court. In the words of one analyst, "It framed the issue as to whether the case before it presented one of those limited circumstances where, in the setting of a private community, the Association's rule and regulations were limited by the constitutional rights of the association's members." It pointed out that "private property itself remains protected under due process standards from untoward interference with … regulations upon its reasonable use." In this case, even though private residences were involved, it found that the rules and regulations were for private purposes, and that government interference was not warranted.
It held that the restrictions of the rules were minor and reasonable. Moreover, the court said, the residents had "other means of expression." They could "walk through the neighborhood, ring the doorbells of their neighbors, and advance their views."
Key to the ruling was the fact that the court did not find the association to be a "state actor," and that, therefore, it could not be held accountable to constitutional restrictions that might apply to a state agency.
The New Jersey court also noted that there are plenty of provisions in the state codes that protect residents from arbitrary actions by an
HOA, and that void unreasonable provisions of
HOA rules or CC&Rs.
The ruling in the Twin Rivers case is yet another one from courts around the country that demonstrate that courts are not going to intervene and overturn reasonable rules that govern those who have contractually committed to follow them.
