AAR Helps Arizona Property Owners Maintain the Right to Use “For Sale” Signs

Posted on September 6, 2013 by Scott Drucker

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The Arizona Association of REALTORS® (AAR) is committed to supporting statutes and legislation that promote Arizona’s housing market, which is vital to the economy of this state. It is this commitment that led AAR to file an amicus curiae brief in support of a homeowner’s right to utilize an industry standard “For Sale” sign regardless of restrictions imposed by a community association.

A.R.S. §§ 33-441 and 33-1808(F) render unenforceable any covenant, restriction or condition prohibiting the indoor or outdoor display of a “For Sale” sign and sign rider by a property owner on that person’s property. For various reasons, these statutes have been the frequent target of legal challenges, often by community associations seeking to enforce the community’s covenants, conditions and restrictions (CC&Rs). The most recent challenge was advanced by PC Village Association, Inc., a community association that governs the Pine Canyon subdivision in Flagstaff, Arizona.

Robert and Cecilia Hawk are the owners of real property located in Pine Canyon and, on August 16 and August 17, 2011, the Hawks posted on their Pine Canyon property a “For Sale” sign. On both instances, PC Village removed the “For Sale” sign claiming it violated its CC&Rs.  It is these facts that give rise to the case of Hawk v. PC Village Association, Inc. and an Arizona Court of Appeals Opinion dated September 3.

Understandably, Mr. and Mrs. Hawk desired to reach as many prospective buyers as possible and recognized that perhaps the most valuable and cost effective manner to communicate that their home was available for purchase was through the use of a simple “For Sale” sign. Claiming that “For Sale” signs are visually unappealing, PC Village argued that: (1) the pertinent statutes did not supersede its CC&Rs because the statues were enacted years after PC Village’s CC&Rs were recorded and amended to prohibit property owners in Pine Canyon from displaying any kind of sign visible from neighboring property; and (2) the statutes are unconstitutional because they substantially impair the community association’s contractual rights. If successful, the position asserted by PC Village would have adversely impacted a homeowner’s ability to sell a property for the highest price, as well as a buyer’s ability to secure information as to which properties are available for purchase.

Following oral argument, the Arizona Court of Appeals rejected the position advanced by PC Village, finding that the community association “failed to demonstrate a substantial impairment.”  The Court’s rationale was based in part on the fact that planned communities and homeowners associations are creatures of statute, their powers being largely defined by legislation. In such a highly regulated industry, the Court determined that PC Village had no reasonable expectation to conclude that its CC&Rs would remain unaffected by future legislation or government directive.

In passing A.R.S. §§ 33-441 and 33-1808(F), the Arizona legislature intended to protect the rights of homeowners by permitting a vital form of commercial speech that assists property owners in selling their homes, likely their greatest capital asset. AAR is therefore pleased that the Arizona Court of Appeals upheld these statutes as constitutional, holding that A.R.S. § 33-441 “plainly invalidates” CC&Rs such as those of Pine Canyon that seek to prohibit “For Sale” signs.

AAR would like to thank attorney Tevis Reich for his dedicated representation of Robert and Cecilia Hawk, along with attorney Richard V. Mack who assisted in the preparation of AAR’s amicus curiae brief.

About the Author:

Scott Drucker

Scott M. Drucker, Esq. is general counsel to the Arizona Association of REALTORS® (AAR). He serves as the primary legal advisor to the association. Scott oversees AAR’s Risk Management Committee, which includes professional standards administration for 20 of the state’s local REALTOR® associations, and the development of standard real estate forms. Please note that this post is of a general nature and may not be updated or revised for accuracy as statutes and case law change following the date of first publication. Further, this post reflects only the opinion of the author, is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.

 

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