Month: October 2019

Appeals Court Deems Association Street a First Amendment Public Forum

Disputes between individuals and HOAs frequently occur on the roads or sidewalks owned by the Association. The rights of way are usually the HOA’s largest budgetary and operational responsibility. The lot owners and their invitees rely upon the roads to access properties. State and local governments benefit financially by shifting the maintenance burden of the roads, sidewalks and drainage features onto an association that assesses dues on lot owners. Despite this public function, many associations or their residents want to use the roads’ “private” status to exclude undesired visitors or limit the roads’ use by lot owners. Representatives of the board may accost visitors as unwelcome. Managers may try to stop owners from communicating with residents on the sidewalks.

The declaration of covenants will contain provisions that define the respective rights of owners and the board with respect to common areas such as right of ways. By deed or “contract,” a lot owner may find that she has rights or duties with respect to these private roads that vary in scope or character from government-owned streets. However, owners are not the only parties that use HOA roads. HOA boards and committees are not the only authorities that regulate use of land in subdivisions. While the answers to most HOA problems are in the governing documents, sometimes broader legal principles apply. When do courts treat HOA roads or common areas as public forums for purposes of free speech analysis under the Bill of Rights? In July 2019, the U.S. Court of Appeals for the Sixth Circuit considered such a case.

5325 Summer Avenue Property Owners Association, Inc. owns Virginia Run Cove, a two-lane asphalt street in Memphis, Tennessee. The public uses Virginia Run Cove to access a gas station, a church, a federal government office, and, since May 1, 2017 a Planned Parenthood Clinic. John Brindley, who does not live or work in this subdivision, decided to stand on this private street near Planned Parenthood’s parking lot to share with others his pro-life, anti-abortion message. In his Complaint, Brindley explained that he wanted to speak with Planned Parenthood patrons about alternatives to abortion without having to shout at a distance. His Complaint states that he wanted to share his views about abortion, as informed by his religious faith, in a nonviolent and non-harassing manner. Planned Parenthood complained to the Memphis police department that Mr. Brindley was trespassing on a private street in front of their business. The police arrived. Based on Planned Parenthood’s explanation that this was private property, they instructed Brindley to relocate. Under fear of arrest, Brindley left.

Mr. Brindley filed suit against the City of Memphis and representatives of its police department for infringing upon his First Amendment rights because Virginia Run Cove functions as a “public forum” for purposes of Free Speech analysis under the Constitution. Mr. Brindley did not name Planned Parenthood or the Association as co-defendants.

The case went up to the Sixth Circuit Court of Appeals after the federal trial-level court denied Mr. Brindley’s motion for a preliminary injunction.

On appeal, the outcome turned on how “public” Virginia Run Cove is for purposes of the First Amendment. Brindley contended that the road was a “traditional public forum,” requiring the court to strictly scrutinize governmental restriction on speech activities. The City of Memphis contended that it was a non-public forum, and the courts ought to defer to the police department’s actions.

Under federal case law, there is a strong presumption that public streets are traditional public forums. Also, the Supreme Court has held that a street does not lose its status as a traditional public forum simply because it is privately owned. If the street looks and functions like a public right of way, it suffices as a traditional public forum regardless as to who may hold ownership of it. The emphasis in this analysis is on how the road, sidewalk, park or other public space functions in the daily commerce and life of the neighborhood

The District Court for the Western District of Tennessee denied Brindley’s Motion for a Preliminary Injunction. The District Court Judge wrote:

When property is privately owned, it is subject to the First Amendment in proportion with the owner’s authorization of public use. “The more an owner, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it.” Marsh, 326 U.S. at 506. Inversely, where a property owner invites the public for a more limited use, reflected in a utilitarian design facilitating only the specific commercial purpose of the invitation, the balance tips in favor of the owner, as the limited invitation results in the retention of some of the property’s private nature. See Lloyd Corp. v. Tanner, 407 U.S. 551, 569 (1972).

Brindley v. City of Memphis, 2:17-cv-02849-SHM-dkv, 2018 U.S. Dist. Lexis 117481 (W. D. Tenn, Jul. 13, 2018)

The district judge denied the motion on the grounds that at the hearing, Brindley failed to carry his burden of establishing that the present or historic uses of Virginia Run Cove made it a “traditional public forum.”

On appeal, the Sixth Circuit Court of Appeals took up the question of how “public” Virginia Run Cove is for purposes of the First Amendment. Brindley contended that the road was a “traditional public forum,” requiring the court to strictly scrutinize governmental restriction on speech activities. The City of Memphis contended that it was a non-public forum, and the courts ought to defer to the police department’s actions.
Under federal case law, there is a strong presumption that public streets are traditional public forums. Also, the Supreme Court has held that a street does not lose its status as a traditional public forum simply because it is privately owned. If the street looks and functions like a public right of way, it suffices as a traditional public forum regardless as to who may hold ownership of it. The emphasis in this analysis is on how the road, sidewalk, park or other public space functions in the daily commerce and life of the neighborhood or community. The Sixth Circuit summarized the judicial opinions regarding whether a private street is a traditional public forum according to a two-part test: (1) is the privately-owned street physically indistinguishable from a public street and (2) does the street function like a public street. If both of these criteria are met, it is a “traditional public forum.” The Sixth Circuit observed that Brindley did not need to prove the past and present history of the use of Virginia Run Cove because consideration of its objective characteristics is sufficient. The appeals court arrived at a different result because it applied the First Amendment with greater generosity than the trial-level court.

The Sixth Circuit reversed the District Court. The appeals court found Virginia Run Cove physically indistinguishable from a public street. There were no signs or visual indicators that it was privately owned. The Court also found that the Cove functioned like public streets in the way it gave cars and pedestrians access to the businesses on that street. The City of Memphis argued that Virginia Run Cove was distinguishable from a public street because its street sign was blue, unlike the green signs used for public streets. The Sixth Circuit found that this open but subtle indicator to be insufficient to make Virginia Run Cove “distinguishable” as a nonpublic forum. This suggests that the “indistinguishable” requirement is not a rigid one.

The Court considered the effect of recorded land instruments. Under the Constitution, courts do not defer to state-law definitions whether the street is a publicly dedicated right of way to decide whether it is a traditional public forum. However, if such a dedication exists, that may be used in support of a free-speech argument. The final plat of the development contained a certification of dedication of the streets for public use.
The Sixth Circuit found that Virginia Run Cove is a “traditional public forum” for First Amendment purposes. The City admitted that under a strict scrutiny standard, they could not identify a compelling governmental interest in excluding demonstrators. The appeals court reversed the denial of the preliminary injunction and remanded the case to the District Court. On October 15, 2019, the District Court entered a consent order enjoining the city of Memphis police from infringing upon Brindley’s constitutionally protected right of self-expression on Virginia Run Cove.

Notice that the HOA was not party to this lawsuit. The complaint and opinion don’t mention HOA involvement. However, this case illustrates how the legal status of HOA common areas affect the rights of visitors and residents. This can be confusing if someone tells a visitor that they must leave because the right of way or common area is “private property.” Bill of Rights protections might not apply. This is further confused by the fact that HOAs often enjoy status as a tax-exempt entity because they perform a public benefit by maintaining roads, playgrounds and other public open spaces that would otherwise fall upon the government. HOA roads, easements and playgrounds are commonly used by persons who don’t reside or work in the community.

When people feel threatened in the HOA or condominium setting, they often call the local police department. While the police may have the authority to detain, arrest or summon someone under certain circumstances, they may not want to get involved in neighbor disputes. Also, the accused will have constitutional protections against governmental officers not ordinarily available in civil disputes. Its often unclear to whom an aggrieved party ought to state their claims in the event of a dispute involving an association.

The growing body of case opinions defining privately owned roads or other open spaces as “traditional public forums” shapes the way that developers and HOA boards treat common areas and rights of way. Desires to have the government take over maintenance of roads for financial reasons runs contrary to restrictions on use for free speech. HOA boards may erect signage viewable to the public that may not be consistent with the terms of recorded instruments regarding the road or other common area. In fact, in some subdivisions, people may make a road or open space appear private when in fact the land instruments show that it is publicly dedicated. The signs may suggest that land is controlled by the HOA as a common area when in fact it is part of lots.

The City of Memphis did not attempt to appeal the adverse decision up to the U.S. Supreme Court. I see nothing to suggest that the Brindley case was incorrectly decided on appeal. This is good news, because every year more and more rights of way and park-like open spaces are developed as common areas of HOAs and condominiums. Citizens ought not to lose recourse to protections for speaking with others on public forums because they are developed as privately-owned land.

Judicial Opinions Discussed:

Brindley v. City of Memphis, 934 F.3d 461 (6th Cir. 2019).

Brindley v. City of Memphis, 2:17-cv-02849, 2018 U.S. Dist. Lexis 117481 (W. D. Tenn, Jul. 13, 2018).

Do I Even Have a HOA?

It’s usually clear to home buyers whether a HOA governs their subdivision. A well-maintained sign adorns the entrance. The community manager emails the buyer’s agent an official-looking disclosure packet. For many other landowners, especially in rural areas, it is not clear at the settlement table whether any HOA is active. Months or years after purchase, the owner may receive mysterious notices in the mail with demands to pay money or correct architectural features. This can come as an unpleasant surprise. The landowner may wonder whether this board or committee is for real or a rogue nonprofit. Does the owner have to obey the assessment or violation notice or can it be discarded as junk mail? The truth may not be revealed in the envelope enclosing the notice. The answer to this question is found by ordering a current title report for the property which will pull up all the declarations, easements, master deeds, amendments, plats, etc. This article focuses on problem solving for owners of lots in subdivisions. Questions about whether various legislative or bureaucratic acts are sound public policy fall outside the scope of today’s blog post.

Virginia courts treat the declaration of covenants as the “contract” to which all the lot owners and HOA are party. Recorded instruments may govern a lot even if the current owner didn’t sign anything, so long as the developer caused the covenants to encumber the subdivision. Courts enforce restrictive covenants where the intention of the parties is clear, and the restrictions are reasonable. In Virginia, restrictive covenants deemed doubtful or ambiguous are construed against the party seeking to enforce them. Without an act of the General Assembly facilitating enforcement, anyone (including the HOA) trying to impose the covenants against anyone else, likely must pursue several months or years of litigation with an uncertain outcome. Years ago, the General Assembly adopted the Property Owners Association Act and the Virginia Condominium Act. This legislation loosens the common law policies against restrictive covenants and provides procedures and powers that make it easier for a statute-qualifying association to collect assessments and enforce restrictions. For this reason, anyone that wants rules for the subdivision to be enforced without prohibitive cost, needs to confirm that the declaration qualifies for the POAA.

Whether the POAA applies matters in reality and is not a merely academic question or legal technicality. Without recourse to the POAA’s arsenal of remedies, the Association may not be able to impose and record fines through an internal hearing process for architectural violations and may be forced to bring a civil suit instead. The POAA allows HOA boards (where the declaration authorizes) to impose rules not stated in the recorded instruments on the community without amending the declaration. Without use of the POAA’s debt collection remedies, the HOA may abandon efforts to obtain assessments from owners because of fees associated with suing unpaying owners. Many abuses of power that cause consumers to complain about HOAs are enabled by these statutes that abrogate protections afforded to landowners under the common law.  

The POAA includes the legal definition for an association or declaration to qualify for the rights and duties it provides. If the POAA doesn’t apply, there may still be a board or committee of some sort, but it will have less power. Without recourse to the POAA, covenants may still be enforceable, just not easily. The POAA “applies to a “Development” subject to a “Declaration.” To qualify under the POAA, the Declaration must contain terms such that the Association possesses both the power to (1) collect a fixed assessment or to make variable assessments and (2) a corresponding duty to maintain the common area. This must be expressly stated in the recorded documents and may not be inferred or implied. This legal test looks to what the recorded instruments say, not how things are actually functioning in the subdivision. For property to qualify as a “common area” under the POAA, it does not necessarily have to be conveyed, leased, or owned by an association. The POAA requires the court to construe how the declaration discusses any common areas.

This may seem like a simple definition that developers can easily fulfill by writing up the documents in accordingly. However, many declarations fail to meet this definition because they may impose on the lot owners the duty to pay assessments but fail to obligate the association to spend them on maintaining the common areas. Many developers may want to limit their maintenance obligations in the community while retaining effective control over the association. By failing to obligate the association to maintain the common areas, a developer may unwittingly put the community outside the POAA. This can be good or bad for a particular lot owner, depending upon how dependent they are on HOA services to enjoy their own lot. It is not always in a lot owner’s best interest for their subdivision to fall outside of regulation by the POAA. The POAA allows for reasonable attorney’s fees to a prevailing party. The lot owner may need to rely upon some other provision of the POAA to make their case. Sometimes, the aggrieved owner is the one who needs to enforce the covenants to vindicate their property rights. For example, if a lot owner needs the HOA to take responsibility for a problem with maintenance or operation of a common area, it may be counterproductive to undercut the boards authority to make repairs.

          An “association” cannot unilaterally confer upon itself the POAA’s privileges simply by recording an instrument stating that it has the authority to assess the lot owners for common area maintenance and obligating the association to perform such maintenance. That would require an amendment. At common law, any amendment requires consent of 100% of the owners subject to the covenants. The POAA has its own “default” amendment provisions. Most declarations include amendment provisions that vary from the 100% common law requirement or the POAA’s 2/3 amendment provisions. Consultation with qualified counsel is necessary to determine what requirements apply. Lot owners must be wary about amendments because if the statute of limitations in the POAA for challenge to an amendment applies, the dissenting lot owner would need to file the challenge within one year of the effective date.  

          Do HOA covenants become unenforceable after lot owners get away with disobeying them for many years?  Under Virginia law, the right to enforce a restrictive covenant may be lost by waiver, abandonment or acquiescence in violations. The party relying on such waiver must show that the previous conduct or violations had affected the architectural scheme and general landscaping of the area to render the enforcement of the restriction of no substantial value to the property owners. This legal standard sets a high bar for asserting such a defense.

In Virginia, there are procedural requirements for sellers to disclose a host of materials to buyers, including the governing documents of any association to which the POAA applies. The seller does this by paying a fee to the association to send the buyer the materials. Then, the buyer has three days to review these materials and exercise a right to cancel the sale if they are not acceptable. However, the current disclosure system does not adequately protect buyers. Three days is insufficient for a buyer to obtain counsel to review and answer questions about the covenants. If there is something deficient about the disclosure process or dissatisfactory about the covenants, the buyer’s only remedy is to cancel the deal timely. Few purchasers ever do this. The practical effect of this disclosure packet system is to protect sellers and associations from subsequent claims of surprise by purchasers. For insurance purposes, the title company will provide the purchaser with a list of covenants, easements and other encumbrances on the title of the land. Few buyers pay attention to this information.

          Virginia law requires associations to register with the Virginia Common Interest Community Board. These registration requirements obligate HOAs and Condominiums to submit annual reports of basic information about the association each year. However, a declaration of covenants may still be enforceable against a lot owner even if the association leadership fails to keep their registration current. Also, HOAs incorporated under the Virginia Nonstock Corporation Act must make submissions and pay fees to the State Corporation Commission each year to keep the corporate status from being cancelled. However, even if a HOA is listed as “automatically terminated” in its official corporate status, this is unlikely to nullify terms of the governing documents. Lot owners should consult with qualified counsel before disregarding HOA notices because they haven’t observed registration formalities with the government.   

          If covenants and easements pop up in the exceptions to a purchaser’s title insurance, it’s likely that lots in the subdivision are encumbered. This is not always a bad thing, when someone needs to be held responsible for maintaining roads and drains. Some people like the amenities that their HOA offers and want the restrictions to be vigorously enforced so that they don’t have to suffer what they consider eyesores. Other landowners are uncomfortable about paying assessments to a HOA who inadequately maintains the common areas and roads and enforces the covenants in an uneven and erratic fashion. Determining whether the subdivision and its association fall within the scope of the POAA, is essential for evaluating whether certain provisions are practically enforceable. Everyone wants peace of mind and a sense of certainty about what debts they are obligated to pay and what they can or cannot do on their land. Determining whether the association enjoys the powers and duties found in the POAA is the first step to achieving that peace of mind or taking the next step to vindicate their rights.   

Selected Legal Authorities:

White v. Boundary Ass’n, Inc., 271 Va. 50 (2006)

Scott v. Walker, 274 Va. 209 (2007)

Anderson v. Lake Arrowhead Civic Ass’n, 253 Va. 264 (1997)

 Dogwood Valley Citizens Ass’n v. Winkelman, 267 Va. 7 (2004)

 Dogwood Valley Citizens Ass’n, Inc. v. Shifflett, 275 Va. 197 (2008)

Shepherd v. Conde, 293 Va. 274 (2017)

Village Gate Homeowners Ass’n v. Hales, 219 Va. 321 (1978)

Property Owners’ Association Act, Va. Code §§ 55.1-1800 through 55.1-1836

photo credit: Editor B Surreal Suburban Subdivision via photopin (license)