Important Updates- Must Read

When the Cranberry Lake Community Club (CLCC) first announced that they will begin mandating membership in 2019, it was based solely on being in compliance with Chapter 106 of the Planned Real Estate Development and Full Disclosure Act. The new chapter, concerned with elections in common interest associations, states that all unit owners, who pay an assessment by virtue of their individual property deed, are members of the property association that holds the common property on behalf of such individual owners. See below 6/27/18 letter from Mary Seage that announced mandatory membership requirements.. Now, after the Chapter 106 clarification bill S908 has been signed into law, the CLCC Executive Board has deceitfully attempted to modify the justification for their decision to compel mandatory membership in their social club.

The fact of the matter is that without a legitimate “master deed” and the proper formation documents, the CLCC is NOT a PRED association subject to any PREDFDA regulations. By pointing to an unenforceable sales restriction --- unenforceable because of a 1948 Supreme Court decision holding that sales restrictions like the one here were used to enforce illegitimate racial and ethnic restrictions and are thus void ---, found in SOME of the property deeds does not make the Club into a common interest property association. If you happen to have such sales restriction in your deed chain, please note that such restriction expires if the CLCC were to dissolve. No property association created to hold and maintain common property on behalf of individual property owners contemplates dissolution.

An actual example of a PRED “master deed” and formation documents governing a once "voluntary" lake community are provided below. These documents relate to Lake Parsippany Property Owners Association. When comparing this to the alleged 1927 Calkins “master deed”, and the document incorporating the CLCC, and the deeds that they hold for property that they own at Cranberry Lake, there are stark differences. For example, the formation documents governing the property association clearly define the properties within the planned community and clearly define the association's responsibilities for maintaining the properties that are owned and held in common by the association. Individual unit owners also have easement rights, not sales restrictions, to use the private lake for swimming, boating and fishing. These same planned common interest community criteria are lacking in the alleged Calkins “master deed”, the CLCC formation documents, and all our individual deeds. All of us, including the CLCC have the right to use the Lake in the same manner as the grantor. That is because at the time development began in our community, the Lake was owned by the State "in trust" for the public for swimming, boating and fishing recreational activities.

In some, but not all of the deeds issued by the Cranberry Lake Development Company (CLDC), absent from most deeds post 1970, include an unenforceable sales restriction that is improperly being used by the CLCC to solely define themselves as a PRED association.

" k. Whereas, the party of the second part have induced the party of the first part to sell and convey the aforesaid premises, with the promise on the part of the second part to the party of the first part, that the party of the second part will not sell, rent or lease the aforesaid premises or any building thereon, except to a member of the Cranberry Lake Community Club or build ..."

Verified in a book written by Richard Rothstein and published in 2017, Color of Law, during the twentieth century many subdivision developers created a community association before putting the homes up for sale and made membership a condition of purchase to control who could buy property in the development. In the 1920’s, at the same time the land around Cranberry Lake was being subdivided, this tactic gained national prominence.

Additionally, in 1937 the CLCC amended its Certificate of Incorporation to modify its membership criteria as follows:

Membership shall be limited to persons who have been elected to membership and who control property at Cranberry Lake either through (a) ownership or (b) lease . . . Or persons who are about to purchase lands at Cranberry Lake and who agree to sell or lease such holding only to persons accepted by the Club as members. . .

This modification along with the deed sales restriction confirms that the CLDC and the CLCC were attempting to use club membership as a screening process to control the type person who could purchase property within the Cranberry Lake Community. Today this practice goes against public policy, therefore the deed restriction language currently being used by the CLCC is unenforceable and more importantly DOES NOT supersede any of the key requirements that define a PRED association.

Remember, the CLCC did not develop nor ever own Cranberry Lake or any portion. Currently, they are a holdover tenant of land owned by the DEP, which pursuant to their lease they must maintain. Cranberry Lake is a state resource and the CLCC is a private social club, nothing more and nothing less.

Therefore, placement of any liens on homes by the CLCC for unpaid assessments would be in violation of the law; such liens would be null and void, and private owners who are the victims of such unlawful liens would be able to petition the New Jersey Superior Court to recover any legal fees associated with defending their property titles. That right to collect legal fees for invalid liens was enacted as part of the recent amendment to Chapter 106 that is now law.

To: All Residents of the Cranberry Lake Community

From: Homeowners at Cranberry State Lake United &

Renee Steinhagen Esq., NJ Appleseed PILC

Re: Governor Murphy’s 8/13/20 S908/A2480 Conditional Veto &

Facts About PRED’s/Chapter 106/Fair Share Assessment

Date: August 20, 2020

THE GOVERNOR’s 8/13/20 CONDITIONAL VETO

The Governor's conditional veto of S908/A2480 rewrites the legislation in the same manner as his conditional veto last year. The language of the Governor's bill thus continues to protect property owners at Cranberry Lake from misguided attempts by the Cranberry Lake Community Club to compel membership in the Club. The language of the conditional veto makes clear that the 2017 election provisions in the Planned Real Estate Development and Full Disclosure Act (PREDFDA) were not intended to apply to voluntary lake associations, unless the chain of title governing privately held property lots indicates that such lots were intended to be part of a common interest community; and, where the property association that typically owns the lake, clubhouse, roads, parkland and/or other facilities existing in the community, was organized to own, hold and manage that "common" property on behalf of all the property owners who purchased lots within a clearly defined area (typically, set forth in a Master Deed or other Indenture). The conditional veto simply eliminates language that the Assembly added during the legislative process that would have required common interest property associations that historically never assessed all lots within their jurisdiction, but permitted payments made to the association by lot owners and others voluntary, go to court prior to imposing such assessments.

FACTS ABOUT PRED’s AND CHAPTER 106

The lots that were sold and the various homes that were developed on such lots around Cranberry Lake were NOT developed as part of a Planned Real Estate Development (PRED), and therefore, PREDFDA and thus, the Chapter 106 amendments to that law do not apply. Because lot owners are not given access to property and/or facilities owned and managed by the Cranberry Lake Community Club on their behalf pursuant to their individual property deeds, they are not required to pay an assessment to such Club. Only the payment of such an assessment could, but does not necessarily, give rise to the obligation of the Club to give lot owners membership rights including the right to vote and serve on the board of the Club. (See Renee Steinhagen, NJ Appleseed PILC 3/2 letter to Mary Seage, CLCC President within the HCSLU website “Letters” section drop down.) Only a common interest property association that is a PRED must comply with PREDFDA's membership and election rules.

Property deeds at Cranberry Lake do NOT contain easements to use property commonly held and managed by the Cranberry Lake Community Club on behalf of all lot owners, as was the case at Lake Parsippany, nor entitle lot owners to shares of commonly held property as was the situation at one time at Ramapo Lakes. The Cranberry Lake Community Club acquired land on which to build its clubhouse pursuant to a deed that reads in no significant way differently than the deeds governing most homeowners' lots. The Club, like all homeowners, were given the same rights to use the lake as the grantor, and, at some time, it entered into a lease with the State to use a certain portion of the lake exclusively for its members.

Typically, in a PRED, individual owners are required to pay an assessment for each lot owned. That assessment can be based on the value of the property owned, the size of the lot or other metric, but it is calculated to be a proportion of the monies needed by the property association to maintain the commonly held property. This means that if you own two properties or units you pay two assessments for each property. Membership in the property association flows from payment of the assessment. Additional facility charges can be charged for use of a clubhouse or gym that is not covered by the assessment, and associations can permit outsiders to use such "extra" facilities for a fee if they choose. Furthermore, only property owners within the PRED can vote or run for the Executive Board and its officers. If one owns two properties, one can have two votes, but there are regulations that prohibit an owner of many units from getting more than one seat on the Board.

FACTS ABOUT FAIR SHARE ASSESSMENT

The lots at Cranberry Lake do not constitute a PRED, but their owners are also not responsible to pay a fair share assessment to the Cranberry Lake Community Club under common law. This is the case, because no property owner living around the lake has an easement to use property held by the Club in their deed. Furthermore, in 1987, the Club sued all the individual property owners at the Lake alleging that they had to pay a fair share assessment to support the Club's obligations to maintain a portion of the Lake pursuant to its lease with the State, and other properties that over the years the Club has purchased from Mr. Roland Price or Mr. Robert Dennis or has simply taken possession thereof (without paying property taxes or securing necessary permits, as is the case with some docks. NOTATION: With this benefit of having multiple docks SHOULD come the BURDEN of paying taxes just like all dock owners in Byram.) This case, Docket No. SUX- C-2262-87 was dismissed with prejudice so the same claims between the same parties cannot be relitigated under the doctrine of res judicata. (A case “dismissed with prejudice” is over and done with, once and for all, and can’t be brought back to court. Res Judicata means the matter has been adjudicated by a competent court and may not be pursued further by the same parties.). Another example, in a 3/22/20 complaint served to LPPOA for a Motion for Reconsideration of a prior ruling, it states in the court decision “ [a] Motion for Reconsideration is not an opportunity for a second bite at the apple. It is not a mechanism for unhappy litigants once more to air their position and re-litigate issues already decided.”

Fair Share Assessments include all unit or lot owners within a lake community and the assessments are appropriated based on each property owned and leased, i.e if a person owns/leases ten properties then the person pays ten full assessments for all ten properties.

If there is NO covenant within a deed to use common property held by a property association, such as a lake, there is NO benefit to the property owner, therefore there can be NO burden to maintain that property.

Conceptually, a fair share assessment can be placed on a property owner even if the association holding the common property is not a PRED. However, in many cases, the association holding the common property was created and established as part of a planned community.

In the words of Mr. Roland Price, who inherited the property that was not sold by the Cranberry Lake Development Company and Susan Calkins, the Cranberry Lake Community Club was never intended to be a common interest property association. The Cranberry Lake Development Company subdivided the property its principle owner purchased from one landowner in 1926, and the clubhouse was built several years later to organize recreational activities for its members, It appears that the Club also took on the task of trying to control who could purchase property at the lake and, in the early years, to lobby the State to make improvements to the Lake.