Those of us that work in the community association industry have been closely following the path of the New Jersey case of Committee for a Better Twin Rivers v. Twin Rivers Homeowners Association. On July 26, 2007, the New Jersey Supreme Court announced its decision, affirming the trial court and reversing the court of appeals, in determining that, under the New Jersey Constitution, the homeowners association’s rules restricting signage did not violate the right of free speech, that the constitutional right of free speech is not absolute, and citizens may waive or otherwise curtail their rights. A little background is helpful to understanding this case, and what its implications are to those of us in Colorado.

If there is such a thing, Twin Rivers Homeowners Association is a typical homeowners association. Twin Rivers is a planned unit development, made up of privately owned condominiums, duplexes, townhouses, single-family homes, apartments and commercial buildings. The Association’s property and facilities are for the exclusive use of Twin Rivers’ residents and their guests and the general public is not invited to use them. The Association has the right to make rules and regulations for the conduct of its members, to provide services to its members, and to maintain the common lands and facilities, including residential roads, provide street lighting and snow removal, assign parking spaces and collect trash. Every owner in Twin Rivers automatically becomes a member of the Association, and is subject to its trust (similar to our commonly known declaration of restrictive covenants), its Articles of Incorporation and Bylaws. The services provided by the Association are financed through mandatory assessments levied against members based on an annual budget adopted by the Board.

The plaintiff in the lawsuit was a group of dissatisfied members of the community who objected to several things that the Association was doing. The New Jersey Supreme Court only considered three of these things: (1) restrictions on members’ rights to post signs, including political signs; (2) unequal charges being levied by the Association for use of the clubhouse; and (3) whether the plaintiff’s members were entitled to equal access to the Association’s monthly newspaper to voice their concerns in the community. The main thrust of the complaint was that the Association had effectively replaced the role of the municipality in the lives of its residents, and therefore, the Association’s internal rules and regulations should be subject to the free speech and free association clauses of the New Jersey Constitution.

The court went through an extensive analysis of the New Jersey constitutional protections of free speech and free association. More significantly to us, however, was the court’s acknowledgment that the New Jersey Constitution granted a broader right of free speech than virtually every other state in the nation. It recognized that under federal law, and the law of most states, the constitutional protections of free speech, free expression, and free association only apply to “state action” or “state actors.” While the whole notion of what constitutes state action or a state actor is very complex, generally it means that there is sufficient involvement by the state or federal government in personal lives so that the action might be said to be that of the state (or government) itself.

The court then went on to examine many examples of situations where the issue was whether there was sufficient state action to warrant the protection of free speech, free expression and free association rights. The court said “In sum, the vast majority of other jurisdictions that have interpreted a state constitution provision with language similar to our constitution’s free speech provision require ‘state action’ as a precondition to imposing constitutional obligations on private property owners.” And further “Those courts recognize either explicitly or implicitly the principle that ‘the fundamental nature of a constitution is to govern the relationship between the people and their government, not to control the rights of the people vis-à-vis each other.’” The final analysis is that if there is no state action, then the constitutional protections of free speech, free expression and free association do not apply, and the private rules or contractual provisions will govern behavior of the parties. Examples where there was no state action include shopping malls, apartment complexes, and private college campuses.

The New Jersey Supreme Court ultimately upheld the trial court decision in determining that Twin Rivers was not a quasi-municipality, and therefore, was not subject to the New Jersey Constitution’s free speech and association clauses. While the Association asserted considerable influence on the lives of Twin Rivers residents, that impact was a function of the contractual relationship that residents entered into when they elected to purchase property in Twin Rivers.

So what does this mean to us in Colorado? Neither the U.S. Constitution nor the Colorado Constitution provides free speech, free expression, or free association protections as broadly as the New Jersey Constitution. It is not likely that Colorado courts would find (and so far they have not) that community associations rise to the level of municipalities in the services they provide. The New Jersey Supreme Court recognized that the municipality, not the Association, provided the school system, the police and fire departments, the municipal court system, and first aid services. The Association provided landscape maintenance, upkeep of Association owned roads, removal of trash and snow removal. This is fairly typical of most community associations in Colorado, and although some provide more extensive services, it would be rare indeed for any community association to provide most of the public functions provided by a municipality.

Accordingly, there is no state action in the operations of community associations, and therefore, no application of the Constitution’s protection of free speech, free expression or free association to the operations of community associations. Community associations are controlled by the contractual relationship between the Association and its members created by the declaration, articles of incorporation, bylaws and rules and regulations. The New Jersey Supreme Court said “The mutual benefit and reciprocal nature of those rules and regulations, and their enforcement, is essential to the fundamental nature of the communal living arrangement that Twin Rivers residents enjoy.” The same can be said of Colorado community associations.