Welcome to New Americ: The NJ Twin Rivers HOA decision is not an isolated finding

The NJ Supreme Court rationale and holding in the Twin Rivers HOA constitutionality question is not an isolated, singular event.1. In another state supreme court case, the 1987 Texas court held that the homestead exemption didn’t apply to homes in homeowners associations:

It is unquestioned that an owner of land may contract with respect to their property as they see fit, provided the contracts do not contravene public policy. Therefore, the developer of the subdivision, as owner of all land subject to the declaration, is entitled to create liens on his land to secure the payment of assessments.

A Declaration of Covenants evidences the intent of the original parties that the covenant run with the land, and the covenant specifically binds the parties, their successors and assigns.

We recognize the harshness of the remedy of foreclosure, particularly when such a small sum is compared with the immeasurable value of a homestead. Under the laws of this state, however, we are bound to enforce the agreements into which the homeowners entered concerning the payment of assessments.

P. 634 – 637.

Justices Mauzy & Gonzalez dissented (p. 637 – 639) (emphasis added) .

I respectfully dissent. The court herein has created a remedy in the name of “public policy” in direct contravention of the Constitution of this State.

A review of the history of the homestead exemption in Texas makes the matter as clear and bright as the Texas sky at night; the public policy of this State has been and is to protect homestead property from creditors’ claims.

TEX. CONST. Art. XVI, § 50 (1845, amended 1973) (emphasis added). “All debts,” as used in the foregoing passage of the Constitution, means precisely that; i.e., homestead property is exempt from forced sale for the payment of all debts except in the three constitutionally enumerated instances. The exceptions are: (1) for the payment of the homestead’s purchase money; (2) for unpaid taxes; and (3) for labor and materials utilized in the improvement of homestead property. The Constitution specifies the types of indebtedness for which there may be a valid lien; liens for any other purpose are invalid.

Applying the exceptions to the instant cause, maintenance assessments do not constitute part of the property’s purchase [**16] money; are not taxes, and are not monies for labor and materials for the construction of improvements on the land. Thus, pursuant to the Constitution, homestead property may not be the subject of a forced sale for sums owing for maintenance assessments.

Inwood v. Harris, 736 S.W.2d 632 (1987).

2. The Restatement Third: Property (Servitudes) § 3.1, Comment(h), the generally accepted common law compilation, states:

The emphasis on constitutional rights in this Comment is not intended to limit the general principle that a servitude that creates a risk of societal harm outweighing the benefits of validating the servitude violates public policy. [This legalese simple says that if the servitude harms more than benefits society it will be invalidated]. The question whether a servitude unreasonably burdens a fundamental constitutional right is determined as a matter of property law, not of constitutional law. [emphasis added].

The obvious conclusion to be made is that CC&Rs are not harmful to the public and do not violate public policy. Those CC&Rs include, among others, the exclusion of homestead exemption protections, the right to foreclose as excessive punishments, lack of due process by an independent tribunal, and the acceptance of ex post facto amendments rendering the original CC&Rs “contract” a worthless piece of paper

Published in: on November 20, 2007 at 9:00 am  Comments (1)  

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  1. […] more information on these cases and equitable servitudes see, Welcome to New America, A Choice for Americans, and the standard common law reference, the Restatement Third, Property […]

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