A Commercial Activity? When to Take a Hard Line and When to Let it Slide (Oregon Law)

March 25, 2012 | By: Chris Tingey

As the weather starts to turn from winter to spring, a great transformation happens in this part of the country: people begin to come out of their homes and start spending more time outdoors.  With the increase in yard work, outdoor recreational activities, and leisurely strolls through the neighborhood, a great American past-time begins to sprout alongside the daffodils and tulips: garage sales.  We have all seen the garage sale signs affixed to light poles, scrawled on sandwich boards, and tacked to boxes set on the side of the road, all of which are designed to drive traffic to those homes trying to accomplish their spring cleaning through a money-making exercise.  (While hidden treasures may sometimes await us, my personal experience lends more credence to the term “garbage sale” rather than “garage sale.”)

Recently, however, I was approached by a homeowners association seeking to banish these shabby showcases of suburban salesmanship.  The justification for doing so was the detrimental effect on property values.  The authority for doing so was “commercial activities” prohibition in the association’s governing documents.  In short, the board contended that, because commercial activities are prohibited in the community, garage sales must be banned.

I must confess I was surprised by the request.  Very few sets of HOA or condominium CC&Rs or bylaws—I can count the ones I have seen on one hand—expressly prohibit garage sales in a community.  But, fewer still are the association boards that take the next step and attempt to ban garage sales based on an interpretation and application of existing language in the governing documents without seeking to amend the governing documents to add an express garage sale ban.

Legally, depending on the specific language being relied upon in the CC&Rs or bylaws, a ban based on the existing language in CC&Rs or bylaws can be done.  Many “commercial activity,” “business activity,” “traffic,” or other governing document clauses can be interpreted to include garage sales within their ambit, depending on the specific language used in the CC&R or bylaw.  Such action, however, must be determined on a case-by-case basis because each association’s governing documents are unique.  Beyond the legality, though, is it worth the political cost?

The job of an association’s board of directors is simple: to protect and preserve property values in the community.  This is addressed and accomplished in many ways, but it is clear that the policies a board adopts to accomplish this task have a significant effect on the feel and “neighborliness” of the community.  Property values are not all wrapped up in clean, well-manicured yards; tidy, well-kept building exteriors; community centers, clubhouses, and pools; and green-spaces, views, and solitude… Non-aesthetic elements such as the feel or sense of community of a neighborhood can have a very real effect on property values.  Therefore, when deciding if and how to regulate garage sales in a community, the board of directors should consider the political ramifications of any regulations.  The greater weight may lie with allowing community commerce to continue.

In conclusion, absent a specific provision in an association’s governing documents that bans garage sales, association boards of directors must consider both legal and political issues when establishing a “No Garage Sales” policy within their communities.  Can it legally be done?  If so, politically, should it be done?

The association referenced above ultimately chose to revoke a rule that banned garage sales in the community.  The board decided that the potential traffic and other issues with garage sales were outweighed by the benefits such sales brought to the owners in the community.  In doing so, the board concluded that while it might legally have the authority to ban garage sales, politically it was not worth it.