Lake Parsippany debates mandatory assessments
Precedents in Morris as lake communities cope with declining membership
William Westhoven
@WWesthoven
PARSIPPANY - Lake Parsippany residents are immersed in a debate over proposed mandatory lake-maintenance payments that some other Morris County private-lake associations in recent years have imposed on property owners in their communities.
While many angry residents continue to stew over the $115 bill they received in the mail earlier this month, residents and directors of other recreational lakes in Morris County and the so-called "Lakeland Hills" region of northwest New Jersey are keeping an close eye on the kind of court case and public debate they may find themselves experiencing in the near future.
Several Lake Parsippany residents recently obtained a temporary injunction on the Lake Parsippany Property Owners Association's vote last year to approve mandatory annual assessments of $115 to about 2,200 residential properties sharing deeded rights to the use of the 168-acre lake.
One day after their complaint was filed in Morris County Superior Court on Jan, 9, the plaintiffs joined other concerned residents at an LPPOA meeting that was shut down by township police when the crowd of about 400 people exceeded the legal capacity of the school gymnasium.
"It was a largely hostile crowd," said Lake Parsippany resident Michael Tschappat, who attended the meeting. "Members of the LPPOA began to make a presentation about the need get this assessment, and were frequently interrupted by people yelling at them."
A case-management meeting, possibly by teleconference, is scheduled for Wednesday before Judge Robert J. Brennan in Morris County Superior Court.
"What this case is about right now is property rights, and the right to own property free of unexpected encumbrances," said Brian M. Rader, attorney for the resident plaintiffs. "When you look at the way the LPPOA has operated over the past several decades, they've done a lot to deviate from the original plan that was set for Lake Parsippany in the 1930s. And people who would come into the community over the years would not recognize it as a common-interest community."
"I've lived in Lake Parsippany for 23 years and had no idea I was under the jurisdiction of the LPPOA until I got the mailing," Tschappat said.
"A lot of people had no idea they could do that," said Mary Purzycki, another Lake Parsippany resident listed as one of 15 resident plaintiffs who obtained the injunction in Morris County Superior Court.
Rader successfully argued in court that the LPPOA's decision in 1990 to allow non-residents to purchase memberships broke the "material covenant" originally granting lake easement rights to the lot owners when the community was established more than 80 years ago.
Moreover, "as a nonmember lot owner, (his clients) never really had the right to use the lake for boating, bathing or fishing," he said "And in fact, when they are looking to charge this easement assessment, they're still not even letting them swim."
Declining membership
The LPPOA cited declining membership over the past five years and a financial projection that it may not be able to meet its financial obligations in the future.
"This year, of the 2,000-plus homes within the borders of Lake Parsippany, we have 300 memberships; 143 are are from out of the borders of the lake, making the 2015 total 443 (members)," the LPPOA Board of Directors wrote in an Aug. 3, 2015 letter to residents. "In reviewing our annual finances, the board has projected that the possibility exists that we may be unable to support the lake from our operating budget within the next 6 to 10 years. Sadly, our Neighbor Glacier Hills Pool is experiencing similar circumstances."
Other Morris County lake and swimming associations have taken similar steps to offset declining voluntary memberships by voting to assess minimum maintenance assessments to deeded association members, including Lake Intervale in Parsippany and Lake Arrowhead in Denville.
"We were told that Rainbow Lakes (Parsippany) is beginning an investigation as well," the directors wrote. "The basic premise is that in order to reap the benefit (of the lake, which includes increased property values), you need to help with the burden. The concept is often referred to as Fair Share."
"If you look at these lake associations, the majority were formed where the people who lived there had certain rights to use the lake and join the club, but there may not have been a requirement that it was mandatory to join the association," said Eileen McCarthy Born of the Dolan and Dolan law firm.
Born clarified that while she generally represents the LPPOA, and was authorized to speak on its behalf, Dolan and Dolan is not representing it in this case, which is covered by an insurance carrier.
"There has been a development of case law, the first involving Upper Greenwood Lake in West Milford, and the other involving Lake Lookover (also in West Milford), that in essence say with the benefit of an easement ought to come the burden," Born said. "So even if you choose not to belong to the association, you have a certain benefit that's associated with living in this community. And with the benefit ought to come the burden of maintaining those facilities."
Total cost of a full membership in 2016 was $469, $161.40 less than this year's membership, theoretically reduced by the mandatory easements coming in.
Rader challenged the assertion that the LPPOA would be unable to balance its operating budget in 6 to 10 years.
"Whether they are in imminent need of money is something that has yet to be determined," he said, "There was really no indication the lake was in need of money now. That's something we'll investigate further during discovery or mediation."
"I've lived here through the good times and the bad, through water-quality problems and financial difficulties," said Purzycki, a 45-year resident and LPPOA member. "There have always been those problems. They arise, they go away. The lake always survived."
Rader also expressed concern about the long-term consequences of upholding the current level of LPPOA authority if the judge does not decide in the favor of his clients.
"I work with a lot of common-interest communities, and some increase (assessments) every year," he said. "They also have the ability to special-assess for a variety of reasons, and that's something we're trying to avoid."
Purzycki acknowledged the vote to impose the mandatory assessments was passed overwhelmingly on Oct. 19 by a vote of 101-16, but noted that only paid members were allowed to vote. That restriction is consistent with similar practices in other communities regarding changes to bylaws and constitutional matters.
According to Purzycki, of the 472 paid LPPOA members in 2016, 202 resided outside of the easement region subject to the assessments.
I'm not faulting the board that's there now. The treasurer I think did his best," Purzycki said. "But the people who went to investigate this assessment fee were so gung-ho, and they were not transparent in what they did. And they did not take into consideration that if you're a property-owner's association, you have to represent the whole entity of the community, not just a little fractional group."
Born said the judge already has referred the matter to mediation.
Meanwhile, the LPPOA has posted a note atop its website informing residents that the organization is still authorized to continue collecting the assessment payments, and that the court did not grant the plaintiff's request that assessments already paid be returned.
The $115 assessments are due by Jan. 31. Actual membership, which includes access to the lake and lake facilities including guarded beaches, is an additional $192.60, bringing the total annual cost to $307.60.
"Whether or not their will be late-payment charges and attorney fees will depend on the outcome of the case," the LPPOA posted.
Correction: An earlier version of this story incorrectly stated that non-residents with paid memberships were allowed to vote.
Staff Writer William Westhoven: 973-917-9242; wwesthoven@GannettNJ.com.