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State of New Jersey v. Panther Valley Property Owners Association

307 N.J. Super. 319, 704 A.2d 1010 (App. Div. 1998)

CONDOMINIUMS; HOMEOWNERS ASSOCIATIONS; FINES—Once a condominium association or a private homeowners association cedes jurisdiction of its internal roads to municipal or state authorities, it can no longer enforce violations of the motor vehicle code or impose fines for such violations.

Roads within a gated residential community were maintained by the community’s property owners association. The association filed a request that the municipality or state law enforcement officer assume jurisdiction over the county’s roads. The request was approved by the municipality and by the state Commissioner of Transportation. Thereafter, the association continued to enforce its own speeding and reckless driving laws and impose fines on community residents. The county prosecutor filed a complaint and an order to show cause intended to enjoin the association from enforcing its own such driving rules. The trial judge granted summary judgment, concluding that once authority was ceded to the state, the association had no power to impose fines. The judge also determined that the New Jersey Condominium Act, which prohibits an association from imposing such fines when the state assumes jurisdiction, applied because the community contained some condominiums. On appeal, the association claimed that the county prosecutor had no standing to challenge its bylaws and that the association, as a “private homeowner’s association” was not subject to the Condominium Act. It also argued that, as a private property owner, it retained coextensive powers to enforce its own traffic regulations on its own roads pursuant to N.J.S. 39:5A-3, which states that any request for state enforcement does not prevent the owner from “requiring other, different or additional conditions…or otherwise regulating such use.”

In rejecting the association’s claims and affirming the lower court decision, the Appellate Division held that the county prosecutor had standing to seek both relief on the ability of the association to fine residents for motor vehicle violations and to seek judicial clarification on the validity of private enforcement of speed limits after such enforcement had been ceded to the state. The Court also found substantial public interest in determining the ability of the association to assess motor vehicle fines. Regarding the association’s claim of coextensive jurisdiction, the Court found that the plain meaning of N.J.S. 39:5A-3 mandates a finding against the association. Its analysis was that the “otherwise regulating” language of the statute appears in the same context as the words: “other,” “different,” and “additional” and that “otherwise regulating” is “associated with words connoting acts or conditions that are ‘different’ from or ‘additional’ to,” those already imposed by the state. Therefore, “its inclusion indicates that it carries the same meaning.” Accordingly, “otherwise regulating such use’ necessarily means that the association retains authority only to impose conditions as to matters not set forth” in the state statutes. In other words, while the association may install speed bumps, it is not “otherwise” regulating road use when it fines residents for exceeding speed limits or driving recklessly. The Appellate Division found that the Condominium Act did not apply because the association, as owner of the roads, was not a condominium association. However, it extrapolated that the Condominium Act prohibition against an association imposing its own speeding and reckless driving fines was “a tacit expression by the legislature that any private homeowners associations…have no business assessing fines for motor vehicle violations once they cede enforcement jurisdiction to a public agency.” The Court went on to state that its interpretation was consistent with a legislative intent to have uniform traffic regulations, and cited a statute which provides that no municipality shall pass an ordinance which alters or nullifies traffic regulations unless it is a specified exception.


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