Murphy: Lake communities
can mandate fees

By: Eric Obernauer
NorthJersey.com
USA Today Network - New Jersey

..... Governor Phil Murphy has signed a law that clarifies the terms under which private lake communities and homeowner associations may pursue mandatory assessments on residents who refuse membership.
..... Legislation S908/A2480 states communities may not rely solely on 2017 changes that expanded the legal definition of membership, but may still charge fees if another legal basis exists such as title documents or deeds.
..... The legislation was prompted by allegations that some homeowners associations were abusing their authority to collect fees under a 2017 amendment to the Planned Real Estate Development Full disclosure Act, which said all property owners in a community are automatically members.
..... The act was intended to accord full membership and voting rights for residents of the Radburn Association, a planned community in Fair Lawn whose bylaws had previously excluded some of them form community governance.
.... Some lake communities, of which there are dozens scattered across the state's northwest region in Bergen, Morris, Passaic and Sussex counties, interpreted the law not only entitling all homeowners to membership rights, but also obligating them to the responsibilities even if they declined to join. Armed with the new law, some communities began to demand dues and fees for lake and dam costs and placed lines on property owners who claimed they were never told of their obligations to a lake association when they brought their homes.
..... The recent legislation, which passed the assembly and senate nearly unanimously, was initially vetoed by the governor, who said the interest of homeowners who choose not to pay while enjoying the benefits of membership must be balanced against those who have been faithfully contributing for years. The governor said lake communities must also be able to collect funds to comply with the safe Dam Act and other environmental, health and safety requirements.
.... The legislation was amended to reflect this and is significant for New Jersey's lake association, many incorporated in the 1950s or earlier as summer vacation communities based on voluntary membership. Today [10/07/2020] more than a million New Jersey residents live in a lake or other private community, and many face costs of $1 million or more for the repair of aging dams that created the lakes.
..... A 1979 case involving Upper Greenwood Lake in West Milford established that voluntary association could impose mandatory assessments for the upkeep of their communities on residents who derived even as indirect benefit from living near the lake. Several communities including Lake Lookover in West Milford and Lake Parsippany in Parsippany have relied on that case to collect fees.
.... Other lake communities, however, have encountered resistance and lawsuits form residents who say they receive no benefit and shouldn't have to pay if no clear covenant or deed exists to prove their membership in a community.
..... A lawsuit by Wantage Township resident Kathleen Gorman in Sussex County, dragged on for several years as she fought attempts by the Fiends of Lake Neepaulin to assess her dues for repayment of a dam restoration loan. The case settled in 2014 when the lake association defaulted and Wantage Township, which had co-signed the $1.2 million loan, ended up owing the lake and its debt.
..... The state courts, however, have generally side with lake associations and given them broad latitude to rely on covenants going back decades even if they have not previously enforced them, a precedent that Association in Lake Shawnee in Jefferson, Highland Lakes in Vernon, and more recently Cranberry Lake in Byram have used in their attempt's to levy assessments.
..... Ernest Hofer, president of the New Jersey Coalition of Lake Associations praised the governor for insisting on their right to do so.
..... "governor Murphy continues to acknowledge that the demands on lake communities, including compliance with sate environmental regulations, require that all who benefit form living in these lake communities should pay their fair share to maintain them," he said.
.... North Jersey sponsors of the legislation included state Senator Steve Oroho and assemblyman Hal Wirth, both R-Sussex, and Assemblywoman Holly Schepisi, R-Bergen. Assemblyman Parker Space, R-Sussex, and state Senator Nellie Pou, D-Passaic were co-sponsors.

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