Sign ordinances and restrictions

Can cities and homeowner associations legally prohibit yard signs?

by Ron Walker   Generally, sign ordinances and regulations that completely prohibit real estate yard signs violate the First Amendment of the United States Constitution. The landmark case on this issue is Linmark v. Willingboro, which is a U.S. Supreme Court case decided in 1977. In that case, the town of Willingboro banned real estate yard signs. The town banned yard signs in an effort to achieve a legitimate governmental interest. Specifically, the town adopted the ordinance in the hope of stalling what the town believed might be a flight of white homeowners from a racially integrated community. The United States Supreme Court held that the despite the importance of the goal to achieve stable, integrated housing, the ordinance violated the First Amendment since it did not appear that the ordinance was needed to achieve that goal.

The Supreme Court held that the ban against yard signs restricted the free flow of truthful commercial information. The Supreme Court noted that sellers are just interested in communicating the fact that they are sellers and purchasers are interested in receiving information about available properties. The Supreme held that the argument that other methods of communication were still available to sellers and real estate agents was without significance to the First Amendment. Simply put, the town acted to prevent its residents from obtaining certain information. That information was vital and related to one of the most important decisions that consumers make: where to live and raise their families.

In a later case (Central Hudson Gas & Electric v. Public Service Commission) the Supreme Court set forth a four-part analysis in determining if governmental restrictions violated the commercial free speech protections in the First Amendment. First, the Court must determine if the First Amendment protects the expression (the sign). To come under that protection, the content must concern lawful activity and must not be misleading. Second, the court must ask if the governmental interest in regulating the sign is substantial. If both those questions are answered affirmatively, the court must then determine whether the regulation directly advances the governmental interest asserted and whether the regulation is not more extensive than necessary to serve that interest.

In 1996, the town of Euclid, Ohio adopted an ordinance requiring real estate signs to be placed in the windows of residential structures and not larger than three square feet or four square feet if more than 75 feet from the street. The ordinance was held to be unconstitutional because the ordinance was tantamount to an outright prohibition of real estate signs. The Sixth Circuit affirmed. Interestingly, the city amended the ordinance to apply not only to commercial signs, but to non-commercial signs as well. In this case, the Court noted that the ordinance was content-neutral and that its stated purpose was to guard neighborhood aesthetics. The Court noted that the ordinance was not narrowly tailored to promote aesthetics and effectively banned communication from signs posted on one’s lawn. The Court relied on the U.S. Supreme Court’s prior decisions that bans against residential signs are unconstitutional.

Laws that regulate the time, place, or manner of speech stand on a different footing from laws prohibiting speech altogether. While it appears to be permissible for government regulation to regulate the time, place, and manner of speech to further a legitimate governmental goal, the regulations must promote a legitimate goal and must be narrowly tailored to achieve that goal.

The foregoing applies to ordinances and governmental action. What about restrictions imposed by homeowner associations on real estate signs? Courts are likely to use the same scrutiny if the association performs generally similar functions as a governmental entity or it functions like a governmental entity in its enforcement of the restrictions. Most of the reported cases that upheld an association’s right to limit signs have not addressed the constitutional issue of free speech. In 1948 the U.S. Supreme Court held that judicial enforcement of racial restrictions was a state action and unconstitutional under the Fourteenth Amendment (Shelly v. Kraemer). It seems quite possible that judicial enforcement of private restrictions by a homeowner association may constitute a "state action" which may lead a court to conclude that bans and overly broad restrictions against real estate yard signs violate the First Amendment.

Finally, the issue of what types of restrictions on real estate yard signs are permissible is a subject for further review. It seems safe to say that generally communities may restrict the time, place, and manner of the yard signs if such restrictions reasonably relate to protecting aesthetics or other legitimate interests (for example, safety). Those restrictions may not be unreasonable. It seems likely that reasonable restrictions on the locations of the signs in the yards and the sizes of the signs will be generally tolerated. Whereas, content-based restrictions such as restrictions on colors and limitations on information (prohibiting the name or phone number of the broker) are generally not reasonably related to such purposes.

This article is a review of information assembled by NAR.

Photo © PhotoDisc.

home   current issue    top 10    resources 

discussions   contact us   search

Buyers & sellers, visit www.texasrealestate.com.
REALTORS®, visit www.texasrealtors.com.