The display on Drover Court has become something of a neighborhood tradition in the past few years.
Drover Court residents received letters in late November warning they could face fines and even possible jail time if the lights were not taken down by Wednesday. County officials say the regulations are aimed to make sure home displays do not hamper emergency vehicles.
Jennifer Worthington, who lives nearby, told the Los Angeles Times she lives nearby and throws a party every December so her friends can view the lights.
"It's ridiculous," she said. "Leave our lights alone."
Christy Gruner, like some other Drover Court residents, told the Times the rules seem a bit over the top.
"Like, really? It's just lights, people," she said. "Like, really?"
County Supervisor Pat Bates, who represents the Wagon Wheel area, a planned community outside Rancho Santa Margarita, told the Times Tuesday she believes she has found a work-around.
It would require a contractor to apply to the county for a permit for the display, which would then be inspected to make sure lines of lights strung between houses and across streets meet height requirements.
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