Homeowners test the power of their own association

Article Courtesy of  The Star Ledger
Sunday, April 24, 2005

Twin Rivers, a community of 10,000 people in Mercer County, features four pool complexes, 14 tennis courts, a softball field, basketball and handball courts and a playground.

Though its population is greater than nearly 60 percent of New Jersey's towns and cities, Twin Rivers isn't a municipality. It is a planned community run by a homeowners association, complete with its own set of rules.

Residents who put a sign in the wrong spot on their own lawns face a $50 fine. Voting is tied to property values: Owners of the most expensive houses have four times as many votes as those in the most modest units. One resident lost his right to vote for refusing to pay a $3-a-month cable television fee.

Such communities -- and their rules -- are becoming more common across the nation.

In New Jersey, more than 1.2 million people live in an estimated 5,800 communities governed by homeowners associations or condo and co-op boards. About 40 percent of new housing units in the state are expected to be in a community governed by an association. Nationwide, one in six Americans, 51.8 million people, live under the rule of a community association.

"This is the new wave," said Frank Askin, founder of the constitutional litigation clinic at Rutgers School of Law in Newark. "They have become the equivalent of the old town square or village green."

These associations provide many of the same basic services as towns, including collecting garbage, plowing snow and fixing roads. Much like governments that collect property taxes, they pay for their services with fees collected from homeowners. They can also fine homeowners and put liens on homes.

"These privatized mini-governments are just that: They function as de facto governments, assuming many of the responsibilities that would be provided by municipalities," said Seton Hall law professor Paula Franzese.

But residents are often rankled by association rules. Now some homeowners at Twin Rivers say they have had enough. They have filed a lawsuit claiming the association rules violate their constitutional rights. The case, argued last week in state appeals court, could determine whether associations will continue to hold an iron grip over homeowners.

"You leave your constitutional rights outside the gate," said Haim Bar-Akiva, one of the residents who filed the suit. If the court agrees, he said "it will set a precedent in New Jersey for democratic government in homeowners associations."

But to Ed McConnell, president of the Crestwood Commons Association, the governing board for an 18-unit condominium development in Scotch Plains, the prospect of judges striking down rules residents adopted is a threat to his lifestyle.

"It's a different way of living," McConnell said. "Some people come in and they don't understand that; they think they can do whatever you want."

William Connolly, a Department of Community Affairs official who heads the division that enforces municipal codes and standards, said one reason for the spread of homeowners associations is that developers can offer more amenities -- from clubhouses to golf courses -- by creating communally owned property governed by an association.

"You get your swimming pool as part of owning in the community," Connolly said. "Municipalities are very encouraging of associations because the association will take on some of the responsibilities the town might have to otherwise."



But associations don't have to play by the same rules as local governments. Connelly said municipalities "have a whole system of checks and balances, which by and large isn't there" with associations. Local governments, for example, have to provide more records of their actions to constituents.


The lawsuit filed by a handful of Twin Rivers residents seeks to subject community associations to one of the biggest checks on the power of municipalities: the risk that a court can declare its actions unconstitutional.

It is the latest in a long line of cases to pit the rights of property owners against those of individuals. When fundamental rights are at stake -- particularly rights of free speech -- courts have required the property interests of company towns, farm owners, private universities and regional shopping malls to yield. So far, however, no court has protected homebuyers against restrictions imposed by associations.

A major issue in the Twin Rivers case is whether homeowners voluntarily accepted restrictions by purchasing their homes. They are required to sign contracts agreeing to pay their association fees and abide by association rules.

"They clearly have a choice," Barry Goodman, a lawyer for the Twin Rivers Homeowners Association, told a panel of three judges last Tuesday. "If they chose to live in a homeowners association community, the courts have held they are bound by that contract."

Haim Bar-Akiva said when he bought his townhouse in Twin Rivers in 1984, "it was the only housing that I could afford."

"I had no knowledge about homeowners association rules and regulations," he said. "Nobody told us about that."

His wife Margaret said she thought Twin Rivers was simply the name for a section of East Windsor. "I didn't think it was an enclave that had its own rules," she said.

Still, they found it a good community in which to raise their children until they discovered how those rules could be enforced.

They were fined for having a door of the wrong color and later forced to remove a screen door the association considered to be the wrong style, even though some residents had the same kind, Margaret Bar-Akiva said. She said the experience "opened our eyes to the lack of democracy in living under homeowners associations."

She became president of a group pushing for "democratic reform" through legislation. Haim became a plaintiff in the lawsuit.

McConnell said affordability was a major factor in his decision to purchase his Scotch Plains condominium in Union County, but he also likes the lifestyle.

"For me, a single guy, I don't have to keep up with the Joneses. Everything's the same; that's fine with me," McConnell said. "You can be an individual inside your home, but outside, it's collective living."

The state gets more complaints from homeowners against community associations -- roughly 400 a year -- than it gets from tenants against their landlords, Connolly said. He said complaints against community associations run the gamut from "use of the association's attorney to suppress dissent" to "heavy-handed enforcement of minor rules" to "allegations of conflict and self-dealing."

And while his department can force association boards to meet in public and can sometimes help residents get access to records or a fair hearing, he said most of the time "we have no jurisdiction; there is no way we can help them."

Sen. Shirley Turner (D-Mercer) hopes to change that.

She has sponsored legislation (S2016) to expand the state's oversight of community associations and rein in their powers. Turner said it is needed to bring "some semblance of democracy" to a few community associations that operate like "little fiefdoms." She acknowledged passing the bill is "going to be a battle."