You may have heard that the New Jersey Supreme Court handed down an important decision on Thursday, July 26, 2007 in Committee for a Better Twin Rivers v. Twin Rivers Community Association. The unanimous decision by the State Supreme Court upheld the ability of residents of an association to impose reasonable limitations on the display of political signs, use of community property and content of the association newsletter.

The case was brought by three residents on behalf of The Committee for a Better Twin Rivers (CBTR) that challenged several association-adopted restrictions. The group's first objection involved the restrictions on political signs. Residents were allowed to post a small sign close to their home, or place one in the windows of their house. Placing signs on community property, on utility poles, and other areas was prohibited. Another objection the group raised was the imposition of a deposit and fee for use of the community meeting rooms. The plaintiffs also claimed that their free speech rights were violated because the association determined if and where letters to the editor would be published in the association newsletter.

In trial court, CBTR argued that the Twin Rivers Association's restrictions violated the free speech and association rights of community residents under the New Jersey Constitution. In presenting its case, it put forth a theory that because community associations are performing some functions similar to government, and more and more people are living in community associations, that decisions made by association residents, through their elected boards, should be subject to the full restrictions and requirements of the state constitution. The trial court found for the association, basing its decision on existing precedent that treats associations as contracts and covenants among members of the community. Because associations represent private agreements among homeowners, courts are hesitant to substitute their judgment for the decisions made by community residents.

The CBTR appealed the decision. The New Jersey Appellate Court disagreed with the trail court. While noting that community associations are not governments, it ruled that they are "Constitutional Actors" and, as such, are subject to constitutional restraints on actions. The Twin Rivers Association appealed this decision. CAI filed a friend-of-the court brief in support of the association.

As noted by the New Jersey Supreme Court, "the fundamental nature of a constitution is to govern the relationship between the people and their government, not to control the rights of people vis-à-vis each other." As citizens, we enjoy the rights to free speech, assembly, religion and a host of other freedoms. On appeal, the state's Supreme Court had to examine what these freedoms mean, not between government and citizens, but between neighbors. Does the right to free speech and expression trump the freedom to create an agreement with one's neighbors on regulating expression in the community? Does a person's right to expression provide him/her the ability to tell an association where and when to publish a homeowner's letters and articles? Can association residents adopt regulations for the use of community property? At what point do agreements among neighbors rise to the level of creating a government entity? These are some of the questions the Court had to answer.

In its decision, the Court ruled that associations are not governments or quasi-governments saying, "Twin Rivers is a private, residential community whose residents have contractually agreed to abide by the common rules and regulations of the association." In other words, associations are contractual agreements among residents. As private agreements, courts give great deference to the decisions made by the parties to the contract. This is known as the business judgment rule. The Court ruled that even under the broadest analysis it could apply, it could not find a compelling reason or basis in law to override the decisions adopted by the community residents. In short, the Court is saying that residents in homeowners association have the right to free expression and they also have the freedom to develop reasonable limitations on how the expression will occur in the community.

The Court was also very clear that association powers are not unlimited, and that associations cannot impose any restriction they wish on residents. Under constitutional principles, an association could not adopt a restriction that was against public policy (for example, forbidding all expression, or limiting signs to one political party). Association powers are also limited by the governing documents, and board action cannot exceed the limited grant of authority these documents contain. Additionally, when regulations or rules governing the community no longer meet the needs of association residents, they may vote to change them.

The clear and unanimous decision by the Court was a huge victory for homeowners and homeowner autonomy in New Jersey and may be persuasive in other jurisdictions in future litigation.

However, as Sir Isaac Newton noted, every action has an equal and opposite reaction—homeowner 'advocates' will likely respond strongly to this decision. In fact, some media outlets have already miscast the Twin Rivers decision with compelling and inaccurate headlines, e.g., "Homeowners Forfeit Speech Rights" by the Associated Press. Expect critics of community associations to point to this case as showing the urgent need to reign in associations. Please take time to review the decision, the points made in this letter, and prepare to counter the coming spin. Here are some helpful points about the case:

Twin Rivers Decision:

• The Twin Rivers decision held that residents of association not only have the right to express themselves; they also have the freedom to adopt reasonable policies regulating expression in their communities.
• Community Associations are not governments, but rather, private agreements among neighbors; the New Jersey Supreme Court ruling indicated that the government should be respectful of these private agreements.
• Homeowners' rights of expression and speech are not changed in New Jersey or elsewhere by the Twin Rivers decision, but rather, the case affirmed residents' freedom to adopt reasonable policies governing such expression.
• Although courts across the country may find the decision in Twin Rivers persuasive, it does not have the binding authority of precedent outside of New Jersey.
• At its core, the Twin Rivers decision supports the rights of residents within community associations to make reasonable decisions for themselves without being second-guessed by courts or politicians.

CAI Press Release

Information on the Appellate Ruling

Case Analysis by J. David Ramsey, Esq. (PDF)