Homeowner’s Association Ban on Political Signs Found Unconstitutional

According to a recent decision by the Supreme Court of New Jersey, a homeowner’s association cannot prohibit residents from posting political signs in the windows of their own homes. In Mazdabrook Commons Homeowner’s Assn. v. Kahn, 2012 N.Y.LEXIS 688 (2012), Wasim Khan, a home owner in the Mazdabrook Commons, ran for Parsippany Town Council and posted two signs in support of his candidacy. The covenants, restrictions, and association’s rules and regulations, however, prohibited the display of any signs on the exterior or interior on any Unit, except for one “For Sale” sign on the interior of the Unit. The Board ordered removal of the signs. Initially, Kahn complied. Following another dispute over his rose vines, Kahn filed a counterclaim against the association claiming violations of his free speech rights under the New Jersey and United States Constitutions.

By relying on Committee for a Better Twin Rivers v. Twin Rivers Homeowners Assn., the trial court found that the sign prohibition did not violate Kahn’s free speech rights. The Appellate Division, on the other hand, reversed that issue and found the sign restriction unconstitutional. The Supreme Court agreed. It was held that the sign policy violates the free speech clause of the state constitution. The Court found that in New Jersey, an individual’s affirmative right to speak freely is protected both from abridgment by government and also from unreasonably restrictive and oppressive conduct by private entities.


Posted in Uncategorized | Comments Off

Short Sales May Have Tax Consequences

            A “short sale” occurs when a mortgage lender allows a Seller to sell their property for less than the balance owed on any outstanding mortgage(s). Most lenders waive their right to pursue the short fall and cancel or forgive the debt owed by the Seller.  Lenders then report the difference between the balance owed on the mortgage(s) and the current market value of the property to the IRS by issuing the property owner a 1099 at the end of the year. 

           As a result of the enactment of the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven or cancelled debt may be excluded from Seller’s income if the forgiven debt was used to buy, build, or substantially improve the Seller’s principal residence.  Debt forgiven that does not qualify for relief under this Act includes second homes, rental property, business property, credit cards, or car loans. For more information, see http://www.irs.gov/individuals/article/0,,id=179414,00.html.  The Mortgage Forgiveness Debt Relief Act of 2007 also expires on December 31, 2012.  If your short sale does not close by the end of this year, you may be responsible to include the forgiven debt as income on your taxes.

** You should also contact your tax advisor or accountant to determine whether your principal residence debt is excludable as income. **

Posted in Uncategorized | Comments Off

The Attorney Review Clause

In New Jersey, all realtor-prepared contracts for the sale of residential real estate, containing one to four dwelling units and most leases, must contain an attorney review clause.  The attorney review clause, approved by the Supreme Court of New Jersey, states as follows:

1.       Attorney Review:

The Buyer or the Seller may choose to have an attorney study this contract.  If an attorney is consulted, the attorney must complete his or her review of the contract within a three-day period.  This contract will be legally binding at the end of this three-day period unless an attorney for the Buyer or the Seller reviews and disapproves of the contract.

2.       Counting the Time:

You can count the three days from the date of delivery of the signed contract to the Buyer and Seller.  You do not count Saturdays, Sundays or legal holidays.  The Buyer and the Seller may agree in writing to extend the three-day period for attorney review.

3.       Notice of Disapproval:

If an attorney for the Buyer or the Seller reviews and disapproves of this contract, the attorney must notify the Broker(s) and the other party named in this contract within the three-day period.  Otherwise, this contract will be legally binding as written.  The attorney must send the notice of disapproval to the Broker(s) by certified mail, by telegram, or by delivering it personally.  The telegram or certified letter will be effective upon sending.  The personal delivery will be effective upon delivery to the Broker’s office.  The attorney should also inform the Broker(s) of any suggested revision) in the contract that would make it satisfactory.

This clause makes the contract subject to review by an attorney for a Buyer or a Seller within 3 business days.  The parties may also agree in writing to extend the time for attorney review.  The contract becomes legally binding and final unless the contracting party’s attorney cancels or disapproves it during the attorney review period.  Buyers and Sellers are often under the impression that a document signed is not a contract of sale but rather a “binder” or “memorandum,” by which the parties demonstrate their good faith and intention to sign an actual contract in the future.  The parties often do not realize their signature constitutes a contract, unless it is cancelled pursuant to the attorney review clause.

Once the notice of disapproval is delivered, the contract becomes void and the parties have no further obligation to each other.  Typically, however, the notice of disapproval contains suggested changes/additions to the Contract which would make the Contract acceptable to that party.  The contract will become binding again if the other party agrees to the suggested changes.


** The attorney review clause is only applicable to real estate broker prepared contracts.  It does not have to be included in a contract that is prepared by an attorney. **

Posted in Uncategorized | Comments Off

About Janet C. Navarro

Janet C. Navarro, Esq. is a solo practitioner who grew up in Morris County, New Jersey. She primarily handles residential and commercial real estate transactions for individuals, businesses and estates. Prior to opening her own law practice in 2009, Janet spent over ten years representing individuals, small businesses, Fortune 500 companies Continue reading

Posted in Uncategorized | Comments Off

Why choose the Law office of Janet C Navarro?

Ms. Navarro has been representing individuals and small businesses in real estate transactions and litigation matters for the past fifteen years. Only an experienced attorney can anticipate problems before they arise and come up with cost-effective legal solutions that work for you.

DEDICATED Continue reading

Posted in General | Comments Off