4.05 Signs and Flags
A. Signs168
Condominiums often prohibit posting signs on units or common areas. Once control of the condominium is transferred to apartment purchasers, the adoption of such restrictions may inhibit the project developer's remaining marketing efforts. For example in Crest Builders, Inc. v. Willow Falls Improvement Ass'n,169 the association amended the declaration, effectively terminating the right of the developer to locate advertising signs on the property. The declaration had provided:
no signs, posters, or advertisements of any kind or description shall be erected, maintained or displayed on any of the Existing Property or any part thereof, visible to public view. The provisions hereof shall not apply to the Developer.
It was amended by unit owners to eliminate the final sentence. The developer sought injunctive relief. At issue was not the reasonableness of the restriction, but whether the developer had a protectable interest or "vested" right in its sales program. The court found the declaration had been validly amended and the developer had no vested interest in the original declaration that protected the sales program.170 The reasonableness and constitutionality of a sign restriction were not addressed.
While municipal sign ordinances have usually been upheld,171 restrictions on for sale signs have been struck down as violating the Free Speech clause of the First Amendment.172 Additionally, a United States Supreme Court decision in 2015 held that strict scrutiny should apply to a local sign ordinance regulating content.173 There has been speculation that the ruling may impeded the ability to regulate signs.174
Courts have generally held that sign restrictions in condominiums or community associations do not constitute impermissible infringement of free speech and that neither recording the restrictions nor enforcing them in state courts constitutes sufficient state action to render the private contracts unconstitutional.175 For example in Quail Creek Property
Owners Ass'n, Inc. v. Hunter,176 a subdivision was governed by a covenant stating:
No signs, freestanding or otherwise installed, shall be erected on any lot or structure by an owner except one sign ... containing the owner's name and address. This prohibition shall not apply to model homes or homes under construction .
Alleging the covenant unreasonably restricted First Amendment rights by prohibiting for sale signs, one homeowner sued the association. The trial court decided the covenant "impaired the flow of truthful and legitimate commercial information" and held it was unconstitutional. The appellate court reversed. The critical issue, said the court, was whether there was sufficient state action in enforcement to make the constitutional proscription applicable to the covenant. In neither the recording of the protective covenants in the public records nor the possibility of their enforcement in state courts, did the court find the required state action.
B. Flags
Condominiums sometimes restrict the display of flags, however, the ability to enforce such a restriction against display of the United States flag is limited by a federal law. The federal Freedom to Display the American Flag Act of 2005177 forbids condominium associations178 from adopting or enforcing any policy — or entering into any agreement — that would restrict or prevent a member179 of the association from displaying the flag of the United States180 on residential property to which the member has a separate ownership interest or a right to exclusive possession or use. The Act allows reasonable restrictions on the time, place, or manner of displaying the flag that are necessary to protect a substantial interest of a condominium association.181
Some courts have found that the federal law lacks an important component: it does not provide an enforcement mechanism or specifically establish a private right of action for individuals to bring suit. These courts have dismissed claims under the federal law.182
Before Congress enacted its flag protection legislation, South Carolina already had a law on the right to fly the American flag.183 It says in pertinent part that: a "homeowner"184 may display one portable, removable United States flag in a respectful manner,185 and no homeowners association document 186 or restrictive covenant in a deed "... may preclude the display of one portable, removable United States flag ... [h]owever, the flag must be displayed in a respectful manner... consistent with federal law."187 "Homeowners' association" has the same meaning as found in another statute which says that a homeowners association is "... an organization which is organized and operated to provide for the acquisition, construction, management, and maintenance of property."188 The South Carolina Attorney General has said that the state's statute is "considerably less broad" than the federal one, but it guarantees a homeowner the right to display one portable...
