Sunday, May 23, 2010 - Homeowner faces fines over 'for sale' sign in yard - Homeowner faces fines over 'for sale' sign in yardA Rio Rancho homeowner is facing hundreds of dollars in fines for putting up a "For Sale" sign in his own front yard. Geoffrey Padilla, who lives in Diamond Ridge, said his homeowners association fined him $400 over the past few months. He said the the association handbook bans signs and billboards, including "For Sale" and "For Rent" signs. Padilla said the policy went into effect several weeks after he bought his home, so he thinks the fines should be waived. He also said he thinks the policy is unfair because the subdivision's developer, D.R. Horton Homes, posted similar signs throughout the neighborhood. Padilla claims the builder encouraged the homeowners association to enforce the policy because it doesn't want competition from homeowners.
From Fred Pilot--and keep in mind that municipalities can't ban all signs under the Supreme Court decision of Ladue v. Gilleo, but even Ladue didn't ban "for sale" signs. That was covered by the earlier decision of Linmark Associates v. Willingboro. This is one of those "get away with violating constitutional rights if you are a pseudo-private corporation" kind of things.


HOA Office of Property Value Protection and Preservation said...

Why of course. Putting up a for sale sign in a depressed real estate market can only drive down property values. And we all know HOAs are established to preserve property values. Case closed. The sign must go.

Anonymous said...

This is also the fallacy of "enforcing restrictive covenants" without regard to the substance of the restriction. In Texas and undoubtedly elsewhere, the developers often provide that only they can prop up for sale signs.

Actually, it is usually cast as a prohibition for all and then a savings clause that prevents the clause from being applicable to developer or developer affiliates. You see, the restriction is NOT there to "preserve property values" for anyone except the developer, period.

Don Nordeen said...

This may be an abuse by the board. Any sign restriction should be in the CC&Rs, or the CC&Rs should grant the board the authority to issue rules and regulations (handbook) to restricts signs.

But any authority to the association would still have to pass the "reasonableness" test.

But the serious problem here is that relief is probably only possible through the courts — a higher cost that paying the fine.

Anonymous said...

Arizona passed a law a few years ago to prohibit HOA boards and their agents from engaging in this practice.

In this case, the prohibition was designed to limit competition for the builder. There really isn't any valid reason for this restriction - even after the builder is gone. Homeowners' ability to market their property will be severely burdened if they cannot even put signage on their own lot to indicate that the property is for sale.

Perhaps one solution to addressing the HOA industry trade groups that feed off of creating these disputes is to force the real estate professionals to engage the HOA trade group - after all, the existence of the HOA harms property values and marketability of the property.

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