New Jersey constitution ensures speech rights for homeowners.

A three-judge panel of a New Jersey appeals court has ruled that a homeowners' association cannot limit the speech rights of its members. (Comm. for a Better Twin Rivers v. Twin Rivers Homeowners' Ass'n, 890 A.2d 947 (N.J. Super. Ct. App. Div. 2006).)

Filed in 2000 by residents of Twin Rivers, New Jersey's first planned unit development, the case is the first in which an appellate court has ruled that a private community is a "constitutional actor," said the plaintiffs' attorney, Frank Askin, a professor at Rutgers School of Law in Newark.

"These associations are not subject to the state constitution to the full extent that a municipal governing body would be," Askin said, but the ruling means that they "have to accommodate certain fundamental constitutional rights that will not overwhelm their private property rights."

Private communities like Twin Rivers--with 10,000 residents in 3,000 residential units, a shopping center, a library, schools, and recreational facilities--are growing, according to the Community Associations Institute. The institute estimates that in 2005, almost 55 million people nationwide lived in 274,000 communities with homeowners' associations, an increase of 10 percent from 2000.

The U.S. Constitution does not protect residents of private communities from infringement of their rights by homeowners' associations, Askin said. But New Jersey's supreme court determined in 1980 that New Jersey has no state action doctrine. (State v. Schmid, 423 A.2d 615 (N.J. 1980).) Therefore, Askin said, "the state constitution can reach certain private entities that exercise dominion over persons invited onto their property."

That court also has held that private shopping malls are public forums for petitioning and leafleting, Askin noted. (N.J. Coalition Against War in the Middle East v. J.M.B. Realty Corp., 650 A.2d 757 (N.J. 1994).) The appeals court in Twin Rivers cited both Schmid and New Jersey Coalition to support its holding, saying that "our jurisprudence clearly allows access to private property to exercise constitutionally guaranteed rights."

The plaintiffs' complaint included nine counts, alleging that the Twin Rivers Homeowners' Association

* restricted the display of political signs to residents' own properties, within three feet of their homes

* imposed excessive fees for using a community room for meetings of people opposed to policies of the association's board

* published viewpoints opposing association policies in the association newsletter in a different manner from those supporting the association

* prohibited tape-recording of open meetings of the association's board

* restricted access to the board's financial documents

* unlawfully censured one of the plaintiffs for allegedly violating a board provision on disclosure of confidential information 

* denied access to a list of residents whom the board allowed to vote for board members

* failed to provide a process to resolve disputes over fines (residents with outstanding fines may not vote)

* denied voting equality by using weighted voting, in which residents' votes are weighted according to their property value (tenants have no votes).

The trial court granted summary judgment to the defendant on most of the counts, ruling that the conduct of the association was not limited by the New Jersey constitution, as that of a state actor, such as a municipality, would be.

On appeal, the defense contended, according to the court's decision, that "the conduct involved is that of private actors not subject to constitutional control and must be evaluated under the business judgment rule and an analysis of contractual rights." The association argued that "constitutional standards apply to private actors only when they invite the public onto their property, and that [the] plaintiffs are members of [the association], not the invited public."

The appeals panel ruled that the homeowners' first three claims "implicate fundamental rights interests" and had to be reconsidered.

"We reject the notion that a community association's suppression of its own members' campaigns for election to the board of that association or any other expressive exercise relating to life in the community or elsewhere should be regarded as matters of contractual right or business judgment," Presiding Judge Howard Kestin wrote for the panel. "In the exercise of fundamental rights, we discern no principled basis for distinguishing between the general public at large and the members of a community association.... Title to real property cannot include dominion over the destiny of persons the owner permits to come upon the premises."

The court upheld the trial court's grant of summary judgment on the claims regarding board financial documents, dispute resolution, and weighted voting. It determined that the trial court's findings "were based on reasonable and substantially correct interpretations of statutory standards, applications of the business judgment rule, and assessments of the parties' contractual rights and interests."

The association has petitioned the state supreme court for review.