Committee for a Better Twin Rivers, et al. v. Twin Rivers Homeowners’ Association, et al (A-4047-0352)

The New Jersey’s Appellate Court has issued a landmark decision stating that New Jersey’s Constitution and its protections “can be available against private entities, as well as governmental entities, when the private entities have ‘assumed a constitutional obligation not to abridge the individual exercise of such freedoms because of the use of their property'”.

In Committee for a Better Twin Rivers, et al. v. Twin Rivers Homeowners’ Association, et al (A-4047-0352), owners sought an order permitting “the posting of political signs” on their property “and on common elements under reasonable regulation.” The trial court rejected that claim and found that the common interest community association is “not subject to the constitutional limitations imposed on state actors ….” and was therefore permitted to limit the actionable speech of its common interest community members. The trial court upheld the association’s ban on political signs and applied the “business judgment rule” as the standard of review for “duly enacted policies and decisions” of association boards.

The Appellate Court, noting the increasing number of New Jersey residents living in private common interest community associations, reversed the Trial Court’s ruling and found that New Jersey’s Constitution and its protections are available to citizens (including association residents) and can be used against private entities (community associations) in certain circumstances. The Court discussed the long line of cases by which New Jersey’s Constitution was found to be applicable to private property and referenced its previous decisions (the 1995 Guttenberg Taxpayers and Rentpayers Ass’n v. Galaxy Towers Condominium Association and the 1996 case of the same name, which involved the access to flyers, and other promotional materials by opposition candidates to the condominium’s board) in which the Court held that the “constitutional right to free speech could outweigh the property rights of a private condominium even in the absence of an express or implied invitation to the public or the speaker”.

In the Twin Rivers case the Appellate Court felt that a common interest community association’s suppression or control of certain “expressive” exercises “relating to life in the community or elsewhere” should not be considered as a contract dispute / matter of business judgment. This part of the case was sent back to the Trial Court to review the facts of this particular association’s regulation of expressive activity, not as it relates to the business judgment rule, but in relation the limitations imposed by New Jersey’s Constitution.

As a result of the Appellate Court’s decision in this case, and until altered by the New Jersey Supreme Court or otherwise, common interest community associations must tread carefully when considering rules and/or regulatory schemes connected to members’ expressive exercises (i.e., flyers related to board elections, hanging flags outside of a home, petitions to remove trustees, limit or expand board or member powers, etc.).

While it is likely that common interest community associations can impose reasonable rules “governing the time, place and manner for the exercise of … expressional rights”, associations must balance the law’s protections afforded to private property and expressive exercises upon such property. A guide can be found in a 1980 New Jersey Supreme Court case which directs the private association or entity to account for the: (1) nature, purposes, and primary use of such private property; (2) extent and nature of the public’s invitation to use the property; and, (3) the purpose of the expressional activity undertaken upon such property in relation to both the private and public use of the property.

Associations should undertake a review of all existing rules utilized to regulate and/or control the expression of its members and consider their enforceability under stricter constitutional limitations and not under the more lenient business judgment rule.