Realty Times May 9, 2005

Realty Reality: HOAs Have Little Regulation Over Realty Signs
by Bob Hunt

Many homeowner associations (HOAs) have rules regarding real estate signs. Those rules, and their enforcement, draw particular attention in the springtime, when "for sale" and "open house" signs begin to sprout as prolifically as crocus and tulips.

The basic question, of course, is, "Can real estate 'for sale' signs be prohibited?" And the basic answer is, "On private property, 'no'; but such signs can be regulated." Federal law in this area is somewhat vague -- court decisions tend not to spell out many particulars -- but California law is quite specific. The subject matter is dealt with primarily in Civil Code Sections 712 and 713.

An HOA may not prohibit "for sale" signs on private property. It may prohibit such signs on property that belongs to the HOA. It is unclear -- that is, the legislation doesn't speak directly to the issue, and there has been no controlling court case -- whether or not an HOA can prohibit a 'for sale' sign on common area property that is owned by the unit owners, each one owning a fractional percentage.

Although an HOA may not prohibit "for sale" signs within its jurisdiction, it may regulate them. The extent to which this can be done will depend upon the regulations that have been adopted by the local city or county -- whichever jurisdiction controls in the particular area. This is a generally little understood area of the law. The general principle is this: If the local jurisdiction has rules regulating signs, an HOA may not adopt regulations that are more restrictive than those of the jurisdiction. Suppose, for example, that a local jurisdiction has adopted regulations that say that a sign may not be larger than 3' x 5' (15 sq.ft.). If that were the case, an HOA within that jurisdiction could not adopt a rule requiring, for example, that signs could not exceed 2' x 4' (8 sq.ft.).

On the other hand, if the ordinances of a local jurisdiction are silent on a particular subject, then the HOA may adopt rules regarding that topic. Many jurisdictions, for example, do not address the issue of the colors to be used on signs. If they don't -- that is, if they say nothing at all about color -- then the HOA may adopt rules in that regard. An HOA could require that all signs within its confines be white with blue lettering, if the local jurisdiction did not address the issue of sign colors.

What about the information contained on the sign? This is partly covered by the existing civil code sections, and partly covered by the principle that local jurisdiction rule shall prevail. According to the code, a local jurisdiction cannot prevent a for sale sign from containing the name and phone number of the seller or his/her agent. Therefore, no HOA could adopt such a rule. The code, though, does not address the question of price. A local jurisdiction could prohibit that the price of a property be included on the sign, and so could an HOA -- provided there was nothing contrary in the local rules.

Open house signs are another issue. Any jurisdiction can prohibit the placement of signs on public right of way. However, they can't just generally prohibit "open house" signs. Signs cannot be regulated solely on the basis of the sign's content. "Open House" signs can be banned from public rights of way, but the ban must cover all signs. Similarly, an HOA can ban open house signs from being placed in the common area -- presuming it is owned by the HOA -- provided that no other signs are allowed there either.

Moreover, neither a local jurisdiction nor an HOA can ban open house directional signs from being placed on private property. Suppose your condominium is for sale and you want to place an open house sign. If your neighbor(s) will allow directional signs to be placed on their property, that cannot be prevented, even if there is a general ban on open house signs on common area property.

Ultimately, the question of "for sale" signs is a question of free speech. Like most speech, it can be regulated; but the courts are wary of over-regulation in this arena.

Bob Hunt is a CAR director, and is chair of its Legal Affairs Forum. His email address is scbhunt@aol.com.



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