Do Your Rules Really Exist?

As in a cooperative or a condominium, membership in a homeowner’s association (HOA) means there are rules, eliminating the risk that a next-door neighbor might decide to paint his home bright magenta or that another neighbor could create a public spectacle with elaborate year-round lawn ornaments. How those rules are applied – and whether they can be applied at all – is the question in Jasinski v. Hudson Pointe Homeowners Association.

Peter and Margaret Jasinski owned a home in the Hudson Pointe Homeowners Association in Queensbury, New York. They had placed a political sign by the road that bordered their home. The HOA objected and fined the Jasinskis for their display, alleging that the sign broke an HOA rule prohibiting the public portrayal of “advertisements and other signs.” When the Jasinskis did not pay, the HOA filed a lien against their home.

But there were complications: the road with the sign was within the HOA, but was technically public property. The land had been transferred to the town many years before so that the town – and not the HOA – would maintain it. When the Jasinskis challenged the ability of the HOA to regulate their display (and thus issue a fine), two crucial questions emerged: did the rule contained in the HOA’s governing documents prohibit a political sign; and did the HOA have the right to enforce its rules on a public road?

The lower court first looked at the language of the rule, which read as follows: “no . . . sign or other advertising device of any nature shall be placed for display to the public view . . . on any lot or other portion of the property (including temporary signs advertising homes for sale or rent . . .).”

Although the lower court concluded that under that language, the HOA did have the authority to ban the Jasinskis’ sign, it also noted that the language was ambiguous (did it apply to all signs or just advertising signs?). The lower court concluded that rules such as this should not be extended beyond their literal meaning. In other words, the court would apply the least restrictive reading because public policy requires a free and unobstructed use of real property. Thus, based on the language of the HOA’s rules, the court determined that the Jasinskis had never surrendered their right to display political signs.

The lower court also concluded that the road on which the sign was displayed had been deeded to the town subject to the rules of the HOA. The court accepted an argument made by the HOA: for practical purposes, when the road was given to the town, the parties must have intended that the road remain subject to the HOA rules. How else, the HOA argued, could homeowners expecting HOA protection be assured that those protections would be in place? The court agreed and ruled in favor of the HOA.

Although the appellate court ultimately agreed the Jasinskis had the right to display the sign, it disagreed almost entirely with the lower court’s reasoning. The road on which the sign was placed was a town road that the HOA gave as a “gift” to the public. Without express language to the contrary, the court held, this type of conveyance requires an “absolute relinquishment to public use by the owner.” Because there was nothing in the deed that explicitly and specifically reserved an interest in the property to the HOA, or made use of the road subject to HOA rules, the HOA relinquished all power to regulate use of the road and thus had no right to dictate whether the Jasinskis or anyone else could place a political sign, or any sign for that matter, on the road.

Takeaway

Although this case ultimately turned on ownership of a road that ran through an HOA, it raises a broader issue that we regularly see in co-ops, condos, and HOAs. Often, the board and management may think that a rule exists, in part, because it has been followed for years. However, when the rule is broken and an apartment owner challenges it, the board may discover that the rule doesn’t actually say what everyone thought it said. Or, in some instances, a rule that has been enforced may never have been actually formally adopted.

This case is yet another example of why boards and management should review their governing documents and rules to make sure the documents say what is intended and, if not, to take steps to bring them up to date so they reflect current building practice (and the current state of the often-changing law). Although it may not be practical to adopt some amendments (if a vote of a super-majority of apartment owners is required to make the change), review of the documents may still be a worthwhile, and informative, exercise.

Valerie Christensen, an associate at Stroock & Stroock & Lavan, assisted in the preparation of this article.

Attorneys
For Plaintiff:
Miller, Schachner & Hafner
For Defendant:
Bond, Schoeneck & King