SURPRISE: POHOA Board Bans Garage/Yard Sales (and Lemonade Stands)

THE POHOA BOARD ISSUED AN OFFICIAL VIOLATION NOTICE FOLLOWING A YARD SALE IN MAY.

June 21, 2023

We received a USPS First Class Letter on June 8, 2023 claiming that our yard sale was declared to be a “commercial business on your property” citing the CCR Article X Use Restrictions: A) Section 8 Home Occupation; and B) Section 20 Nuisance.

I think it is rather obvious that this would be a surprise, and would be surprising to others. The notice does not cite any part of the governing documents that defines a garage or yard sale as a “commercial business” or “home occupation”, because no such definition or policy exists.

It was also surprising as we have conducted the same type of sale in years prior (including recent years), without any other Board raising the issue formally or informally. And, we observe others having garage and yard sales as well. In fact, as a former Director and Secretary, I know for a fact that no such enforcement has ever occurred at POHOA since its inception in 2003. This certainly raises the issues of inconsistent enforcement and interpretation of the governing documents.

It is also odd that a sale that occurred on 4 separate days (May 13, May 20, May 21, and May 27) didn’t result in the Board or any Director making informal contact by simply walking up to the sale and raising the issue. Nor did they send an email, send a text message, or call us. This is allowed per the new Covenant Enforcement Procedure Policy, so there is “we were forced to send the notice” excuse:

Instead, there appears to have been a series of escalating actions that resulted in the Board deciding to send a letter nearly a week after the final day of the sale – a fact that was known or should have been known by the Board. The notice states that the “cure” of the violation is the cessation of the sale, so it is literally a moot point by June 1. So, why send the letter?

More importantly, it appears that the POHOA Board has regressed to the practices of 2018, whereby individual Board Members suddenly change the policies of POHOA with new interpretations of the documents without going through the actual process of changing a Policy. It is therefore an unlikely coincidence that this has occurred with Walker Flanary serving on the Board – who just narrowly avoided removal (and being banned from serving for 3 years) in January, largely for the turmoil created by his actions from 2018 onward.

WHAT DEFINES A GARAGE OR YARD SALE?

The POHOA Governing Documents do not have any definitions that direct the Board on how to properly differentiate between a Garage Sale or Yard Sale and a “commercial business” or “home occupation”. We are left with the common definition, common understanding, and perhaps relevant local or state code to find such definitions.

A yard sale is about the location of the sale, and the use of tables in that location. An examination of the actual picture of our sale appears to fit this definition:

As you can see, we have some seedlings for sale. Each year, we germinate seeds for a wide variety of heirloom Tomatoes and Peppers that are not available in local stores. Normal practices are to plant more seeds than plants you need because they do not all germinate or survive. The result is extra plants that are unwanted, which, again, is the definition of the type of thing sold at a yard sale.

This past year Deb, my wife, planted 45 varieties of Peppers, and 20+ varieties of Tomatoes. On top of that, we grow 4 varieties of Basil (Sweet, Lemon, Lime, and Thai). She literally talks to every plant daily as they sprout and grow, which if you factor in the labor of the transplanting, watering, and cost of fertilizing, is a very poor “commercial business” model. The plants that are sold recoup some of the cost of our own garden.

But, most gardeners are pretty good traders too. One neighbor (who lives in an adjacent subdivision), traded us some Venison reflecting the ancient hunter-gatherer “economy”. We have regularly traded for canned fruits, jams, jellies, and other veggies. It’s hard to imagine the harm to a community, or as some claim, property values, from neighbors engaged this this type of trading.

The funny thing is that the ONLY people from POHOA that visited our sale were our direct neighbors, and one that is 2 doors down. Yet, we met many more “neighbors” from the adjacent subdivisions outside our HOA, as well as a few from up and down Overland. What the POHOA fails to recognize is that for us, this is the FUN of living in Fort Collins. Some of our oldest and longest friends were met at PLANT SALES. This is how many gardeners meet, talk about the plants they grow, share practices and techniques, recommend things, and in general support one another.

ARE GARAGE/YARD SALES A LEGITIMATE HOME USE AND/OR COMMUNITY BUILDING?

Something that 10 minutes of googling on the subject reveals is that garage and yard sales are a perfectly normal and regular part of life in America. If you own a home, it is a reasonable expectation that from time to time you can sell off things you don’t want. Some think this is all “junk”, but this includes things that have value (think antiques or family heirlooms), as well as homemade or homegrown things – including plants.

But, more than that, it is legitimate community building. There’s even published papers with citations such as this that reflect that reality:

Source: https://www.jstor.org/stable/44127133

“Some neighborhood sales have been organized expressly for the purpose of getting the neighbors to know one another in areas undergoing transition. They provide a positive means to combat a perceived “decline of community” in the United States today, developing both bonding and binding social capital.“

So, after a few weekends of getting together with our neighbors (because we think of POHOA as one part of a much wider Laporte/Fort Collins community) where the day was filled with fun conversation and laughter, we suddenly get a notice about how we’ve violated the rules. We showed this to a few people, who were universally repulsed.

A common comment: “This is EXACTLY why I would never live in an HOA?”

Does the POHOA Board realize that by banning garage sales, it makes our neighborhood and community look ugly and unattractive? Do they realize it turns away prospective home buyers because of their actions?

If, however, the POHOA Board wishes to stand behind this ban, it doesn’t just reflect upon the individuals serving. If homeowners who supported and elected them do not use their voice (and their ability to overrule the board through the CCR Article IX Section 7 process), then they can’t just say it’s “them”. They own the decision equally, and if that is truly a majority opinion, then it absolutely affects the attractiveness of ownership in this HOA.

WHAT DO HOA ATTORNEYS ADVISE ON THE SUBJECT?

It is unknown whether the POHOA Board consulted their new General Counsel, Moeller Graf, prior to sending the notice. However, if you google the subject, the first result is a link to the VF-Law website, which is the last General Counsel POHOA used prior to Moeller Graf.

The author of the article expresses surprise at well when a Board attempts to interpret a garage sale or yard sale as a “commercial business” or “home occupation”. In fact, they say it’s so rare there’s less than 5 examples (out of 12,000+ HOAs in Colorado) that attempt to ban garage/yard sales with an actual policy, and even less who try to elevate “home occupation”, “commercial business”, or “nuisance” clauses by interpretation to declare such sales are a violation.

Source: https://vf-law.com/2012/03/25/garage-sales-and-your-hoa/

“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.“

After contacting several HOA attorneys and HOA Legislative Experts, including the Colorado DORA HOA Information Officer, as well as Larimer County officials, the responses ranged from “What kind of HOA do you live in?!” to “I have seriously never heard of that.” Every single person to a person was surprised any HOA Board would ever send a notice like this. This is not considered normal, and the only law firm that has published an article on the subject in Colorado calls it into serious question.

WHAT ARE THE BOUNDARIES IN COUNTY CODE OR STATE LAW?

The State of Colorado does not appear to have any state-wide regulation that applies to infrequent sales that occur on private property. The boundaries appear to all be set at the local level either by County or Municipal Codes.

Poudre Overlook HOA is physically in Larimer County with a Fort Collins address given to each home. However, the homes are outside of city limits. Therefore, per the Larimer County Land Use Code 20.2.4 Section H Paragraph 3, garage or yard sales (which include homegrown/homemade items like vegetable plant seedlings) are allowed up to 7 calendar days per year. If the City of Fort Collins code were applicable, they allow garage/yard sales up to 5 weekends per year (defined as Friday-Sunday), and for no more than 3 consecutive days.

But, the POHOA Governing Documents are silent on the subject of garage, yard, plant, or any other type of private sale upon a lot. Unless, of course, you wish to interpret Article X Sections 8 & 10 as being applicable to such sales.

Clearly, VF-Law, a law firm we have used and spent over $17k with in 2021-22, takes issue with the approach of changing policy by changing interpretation. If you want to ban garage sales, you should have a written policy that makes it clear to homeowners who might reasonably expect such things are allowed. Same goes for regulating them, which I am not opposed to.

What is clear, however, is that a sale performed on 4 calendar days over 3 weekends would be allowed by both Larimer County and City of Fort Collins municipal code.

INCONSISTENT INTERPRETATIONS AND ENFORCEMENT

After reviewing the written records of POHOA, there is absolutely no record of enforcement of this covenant on anyone. In fact, one of the more interesting points is that the original builder, who is therefore the “Declarant” while in control of the HOA apparatus, actually BUILT A HAIR SALON for one of the original owners into their home!

This licensed retail business, which had retail customers visiting the home regularly, operated for at least 13 years until the owner moved and sold the home. One homeowner discovered in 2020 that this was a violation and noted it to the board. No action was taken by the Board – just 3 years ago.

The implication here is that because the owner is a “good neighbor”, the rules should not be enforced on her. This is in spite of the fact that she operated year around for literally more than a decade – it just happened to be under the radar of her closest neighbor.

A garage or yard sale, by its very definition, is a sale that is visible and outside of the home. But, it’s not an “occupation” or “commercial”. It is temporary and limited in scope. This is for many, common sense. And, if we tolerated this business on Headwater for so many years without a notice of violation or any attempt to use HOA resources to drive the business from that home, why would the current POHOA Board choose to become suddenly hostile to garage/yard sales in 2023?

When rules are so vague that their enforcement changes when Board members change, as VF-Law points out, they should probably clarify the documents with an explicit policy or guidelines. Reviewing the subject, again via Google, you can find many HOAs that, in fact, regulate garage/yard sales with reasonable boundaries.

The problem here is that by changing the interpretation of Article X Section 8 & 20 to suddenly apply to our yard sale, it would be necessary for the Board and POHOA to consistently enforce these clauses in the same manner going forward. This means that the Board has effectively banned Garage/Yard Sales, but also ANY exchange of money visible outside a home, which would include such things as Lemonade Stands which also sell homemade products at a retail price.

It is therefore hard to avoid the appearance of inconsistent or capricious enforcement, which would then call into question any attempts to levy fines or collect them on the basis of this new interpretation – when such obvious violations persisted for 13 or more years, and garage/yard sales have been allowed without any enforcement for nearly 2 decades. Surprising to say the least.

HAS HB22-1139 INVALIDATED THE POHOA “HOME OCCUPATION” RULES?

In 2022, HB22-1139 and HB22-1137 were passed. We now know that due to HB22-1137, The POHOA Board first resisted changing its policies for 10 months, but was ultimately forced to do so because several HOA attorneys refused to allow them to enforce ANY CCR, Rule, or Policy because compliance with HB22-1137 was necessary in advance of any enforcement effort. Similarly, HB22-1139 resulted in a policy change that forbids any HOA from regulating the public right-of-way (streets). Here is that new policy:

According to Paragraph 3 of this Policy, “Notwithstanding any provision to the contrary in the HOA Documents, the HOA shall not:” This potentially means that Article X Use Restrictions Section 8 Home Occupations, which relies upon the concept that either traffic or parking to a “home occupation” is a violation, is no longer a valid provision. If we apply the logic the attorneys gave us regarding HB22-1137, it is possible that the entirety of Section 8 “Home Occupations” is in need of revision.

When this was raised at the meetings on 9/13/22 (when the policy was voted upon), and in March of 2023 (when we passed several other policy changes), Director Flanary remarked that the Board need not address this conflict now apparent in the documents because the board was capable of using good faith “discretion” when enforcing the rules. This violation notice over a yard sale challenges the notion.

It would appear that if no HOA is allowed to regulate the streets in any manner (traffic or parking), the remaining covenant has very little basis for enforcement, if at all. It therefore follows that attempting to enforce the same covenant citing the section that literally talks about parking on the street a YARD SALE is even more questionable.

As for the subject of Section 20 Nuisance then drifts into whether a yard sale is a “commercial business”, which very clearly recites the fact that there exceptions for “home occupations” in Section 8 (which are based upon traffic and parking!). It is unreasonable for any homeowner to have anticipated such pretzel logic applying to a garage or yard sale, and VF-Law makes it clear that such interpretations are extremely rare and unusual. Surprising, in fact.

SO, ARE GARAGE SALES AND LEMONADE STANDS REALLY BANNED?

Yes. If this is going to be enforced on this yard sale, it must be enforced on all yard sales (garage, driveway, or otherwise). It us unknown if the most recent observed garage sale at a different home since June 1 resulted in a notice to that owner.

If the POHOA Board has now declared through this notice of violation that they are interpreted as a “commercial business” and “home occupation” that is generating “customer visits”, then all such sales must be enforced equally and consistently. Unless this notice is rescinded, the effect of the action is to have changed the policy of Poudre Overlook HOA until a future Board (or this Board) take official legal action to publish a new and different interpretation, or until the Board at any time chooses to publish a new Policy which clarifies the difference between a temporary yard sale and an ongoing, actual, commercial business.

We should not have rules that change when we elect new Board members. And, given the fact that this change is apparently related to Director Flanary rejoining the Board, it is relevant to reflect upon his actions in 2018 – where several enforcement actions resulted in general discord, legal threats, litigation, and ultimately the Board reversing several enforcement actions. All of these were documented in the Formal Complaint I submitted in May of 2019, which has still never been reviewed or received an official response.

• Attempted Removal of a 6-foot fence when the owners had pre-approval and it was written into their Sales Contract. Directors Flanary and Denenberg eventually backed down.
• Threatened to fine an owner for an “illegal fence” that was temporary to keep a dog in a backyard while their daughter received cancer treatments. They were forced to move.
• Threatened to fine an owner for having a sign about LOVE (literally) in their yard. The owners put the sign in their window.
• Threatened to fine an owner for their children having 4 ducks because he claimed they were “commercial” animals, not pets. Directors Flanary and Denenberg eventually backed down when a prior Board member admitted he gave verbal approval years prior, and the adjacent neighbors sent letters to the Board saying the ducks were fine.
• Threatened owners with $20k of out-of-pocket expense over shades of gray on roof shingles when the underlying GUIDELINE said “or similar” about the color. This included a $5k fine, and $15k to replace a brand new roof. Directors Flanary and Denenberg even falsely represented the HOA attorney (resulting in his quitting), and falsely claimed to have somehow changed the guideline at some secret meeting.

There is an established pattern of Mr. Flanary leading POHOA into conflict over his interpretations of our governing documents, and proceeding without actual consultation with our general counsel, without research into publicly available legal guidance, and without a thorough review of the governing documents – including whether existing clauses may be invalidated by changes in state law.

When Mr. Flanary was considered for removal of the Board in January of 2023, I raised the possibility that Mr. Flanary had learned from his actions and had changed. This recent approach to enforcement, however, indicates that in reality, nothing may have changed. We shall see if the response sent to the Board results in rescinding of the notice, as had to be done several times in 2018.

THE RESPONSE

In response, we have sent an email to the Board confirming that the issue is moot (the sale ended on May 27, and they knew that), and therefore the violation, if it actually exists, is cured. We have requested that the notice be rescinded, and if not, that we be granted a hearing. Frankly, we have much better things to be doing with our time, but perhaps this is really just payback for having spoken out about the poor maintenance of our backlots. It’s not beyond imagination.