The trustees of the Rainbow Lakes Community Club in Parsippany, a voluntary membership club for over 90 years, unilaterally decided in 2017 to require all Rainbow Lake residents to join their club. They sent invoices for dues to all 300 property owners in Rainbow Lakes regardless of whether the owners had chosen to join the club.
For a year they threatened to file liens on the properties of those who did not pay the “mandatory dues”.
In December of 2018 they filed liens on the properties of the owners who did not choose to join their club. They did not file lawsuits and obtain judgments against those owners first as required by law, but instead they told the County Clerk’s office that they had the right to file liens automatically as if they were a condominium association.
Several homeowners dug out their title insurance policies, contacted their title companies, searched their full chains of title and determined that there are no documents recorded anywhere that give any notice to a purchaser in Rainbow about the existence of the club or membership in it.
There is no master deed or declaration of covenants or restrictions in the chains of title.
The trustees of the RLCC say that they have bylaws but those bylaws are not recorded in any public records anywhere.
In 2017 the RLCC trustees told the property owners that they had amended their bylaws to take advantage of the Chapter 106 amendment to PREDFDA. That 2017 amendment to their bylaws is not recorded anywhere.
The RLCC was trying to apply PREDFDA (Planned Real Estate Development Full Disclosure Act) to the residents of Rainbow Lakes. PREDFDA has nothing to do with association fees and dues for lake maintenance. PREDFDA is the law in NJ that controls creation and management of condominium and homeowner associations.
The Chapter 106 amendment to PREDFDA in 2017 was solely intended to provide transparency and access to voting rights for all residents within legally established, validly-created condominium and homeowner associations. It was never intended to create a right to demand membership in clubs that were previously voluntary.
Legislators saw the need and took swift action to correct the obvious misuse and misinterpretation of PREDFDA. Residents in several lake communities were suddenly being bullied.
The legislators stepped in and stopped it. Six different legislative districts played a part in sponsoring these bills. 111 out of 120 legislators voted to approve. It was a pleasure to see that politics played no part in the bills. This was a completely bipartisan action to remedy a series abuse of the law.
S3661/A5043 only releases the obligations and removes the illegal liens for those who were previously non-members. It does not take away any membership status or dues from those people who voluntarily join the club. It is intended to ensure that a voluntary club remains voluntary and that people are not forced to join.