Julia Cox lives in one of the flats at the Albert Pier and her balcony overlooks the waterfront.
After reports of the display a JEP photographer went to the property to take a picture – but saw Mrs Cox taking it down.
Brunel Trust, who manage the property for owners Albert Pier Housing Trust, say that they asked Mrs Cox to remove the decoration because it was in breach of her contract.
A clause states that washing or other items may not be displayed from the balcony.
Mrs Cox has lived in the property for three years and says she decorated her balcony last year when Liverpool reached the Champions League final.
She said: ‘If the Queen was visiting would I be able to put out a flag? I asked if I could leave it for one day and take it down after the final – but the spoil-sports said I had to remove it straight away.
‘I had no problems last year flying flags when we got to the European Cup Final.
I was hoping to do the same for England during the World Cup – but they’ve told me not to bother.’ Liverpool play West Ham today in the FA Cup Final at the Millennium Stadium in Cardiff.
‘I know Liverpool are going to win, anyway – they can’t stop that,’ said Mrs Cox.
