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New Jersey Supreme Court Invalidates Homeowner Association Ban on Political Signs

Mazdabrook Commons Homeowners’ Assn. v. Khan, 210 NJ 482, 46 A3d 507 (2012) involved the constitutionality of plaintiff homeowners association covenants, which generally banned political signs. Plaintiff ran for town council and posted two political signs – one in his window and another inside his door (which could be seen through the glass outside door). Plaintiff ordered their removal as its rules banned all but “For Sale” signs. In Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Assn., 192 NJ 344, 929 A2d 1060 (2007), the New Jersey Supreme Court had upheld restrictions limiting signs in windows and in common flower beds adjacent to homes, which was in contrast to the near-complete ban on all expressive activity in this instance. The Appellate Division nevertheless struck the ban in this case and the Association appealed.

Plaintiff Association is made up of 194 members who own townhouses and elect a Board of Trustees which operates the nonprofit corporation that manages homeowner affairs. There are no public streets in the development; however, it is not gated. Prospective homeowner-members are informed of its rules before buying their townhouses and the rules specifically prohibit posting of signs (again except for “for sale” signs), among other things. Under the rules, the Trustees have the authority (but without specific standards) to waive the posting regulations. Plaintiffs sued defendant over the ban, as well as over an unrelated matter, and prevailed on both at trial. Defendant appealed the sign issue and prevailed in the Appellate Division, a majority of which found the rule unconstitutional because it favored commercial speech over political speech, was not content-neutral, and foreclosed a significant type of communication.

The Supreme Court began its analysis by noting that New Jersey had a strong state constitutional provision on free speech, which was even broader than the First Amendment of the Federal Constitution and was not limited to restrictions on governmental action – the prohibition applies to private entities such as shopping centers, for example. Private property areas where the public was invited could be the subject of regulations if those regulations were reasonable time, place and manner restrictions. In Twin Rivers, the limitation to one window and one flower bed sign was upheld in a private development where outsiders were not invited into its residential areas and the regulations were not unreasonable and constituted minor restrictions.

The Court said that if the speaker is both an owner and Association member, that fact favors a balancing test. For while the Association has an interest in enforcing its common restrictions and there is no invitation to the public to use its streets, Defendant is not an outsider seeking to enter a development to express views. In this case Defendant is an owner and resident and case law does not favor absolute speech restrictions in those circumstances. The Court then turned to the purpose of the speech at issue, finding it to be political speech, which lies at the core of free speech guarantees. In this case, Defendant seeks to advance his own political candidacy in a circumstance where residential signs are a long-standing method of communication. See, City of Ladue v. Gilleo, 512 US 43 (1994), describing such signs as an “unusually cheap and convenient form of communication,” due to their location in relationship to the owner. Defendant also has a free speech right which cannot be impaired by a near-complete ban on political signs, especially those which only minimally affect association property or common areas and are thus a relatively minor interference with private property. The Association could adopt reasonable time, place and manner restrictions, such as sign size and number, rather than a total ban, as the Declaration allows the Board of Trustees to waive the ban (and thus to set standards for signs). There are alternative means by which defendant can put his political message across, but these alternatives cannot replace the “venerable,” “unique” and “important” role of a residential, political sign. The Court specifically eschewed resting its decision on content-based regulations (i.e., allowing “For Sale” signs but not political signs), as even banning “For Sale” signs would not result in a set of constitutional regulations. The Court also noted that the Association failed to preserve its waiver argument and, even if the challenge to content-based regulations had been properly raised, Defendant was not asked to waive his free speech rights when he purchased his townhouse. The Court again noted the Trustee’s ability to grant exceptions, though without standards. In any event, there was no knowing and intelligent waiver of any rights by Defendant. The Court concluded:

“We also note that tens if not hundreds of thousands of New Jersey residents live in developed communities like Mazdabrook. The proliferation of residential communities with standard agreements that restrict free speech would violate the fundamental free speech values espoused in our Constitution – the “highest source of public policy” in New Jersey. * * * For that reason, we cannot accept that a complete waiver of free speech rights in one’s home could be possible in this context. Instead, as discussed earlier, the exercise of those rights can be subject to reasonable time, place, and manner restrictions.

* * *

To the extent that Mazdabrook or the dissent relies on a restrictive covenants analysis, the Association’s sign policy likewise fails.* * * When courts evaluate whether a covenant burdening land is enforceable, they must determine whether the covenant is reasonable. * * * Among other factors that inform that decision is “[w]hether the covenant interferes with the public interest. * * *

This Court explained in Twin Rivers that “restrictive covenants that unreasonably restrict speech – a right most substantial in our constitutional scheme – may be declared unenforceable as a matter of public policy.” * * * Because the restriction in question is unreasonable and violates the State’s Constitution, the covenant that memorializes it is unenforceable.”

The Appellate Division decision finding the sign regulations unconstitutional as applied was thus affirmed.

There was a dissent that stressed the paucity of evidence at the trial level on the free speech issue, which rather focused on an issue that was not appealed. Defendant did not testify he was misled or confused by the closing documents which dealt with the sign regulations, nor did he seek a hearing on the Order to remove his sign, as was his right. The dissent found the 2007 decision in the Twin Rivers case to be controlling and would uphold the regulations, noting that Defendant agreed to the same when he purchased this property.

This case contains an important discussion of sign restrictions in “communities” where the homeowners association effectively serves as the City Council.

Mazdabrook Commons Homeowners’ Assn. v. Khan, 210 NJ 482, 46 A3d 507 (2012)/

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