Friday, July 16, 2004
The Skinny on POAs and HOAs: Is it possible to keep them from swallowing up existing neighborhoods?
The following is an informative selection of articles and resources on Property Owners Associations and Home Owners Associations. A new upscale-gated community comes in next-door and you think that your existing neighborhood will not be affected. Think again!
New Property Owner’s Associations Can Take Over Existing Neighborhoods!
In neighborhoods, which are not protected by HOAs or POAs, existing covenants or deed restrictions are often challenged or violated. When that happens, property owners become easy prey for predatory POA’s or HOA’s looking to increase their income, power, and control by offering to “look out for your neighborhood’s interests.” Once a majority of property owners elect to join an existing POA or HOA all the property owners will not only have to pay yearly assessment fees for any common areas such as parks and private roads, they will also lose their right to judicial recourse. They will live in a neighborhood where their civil and constitutional rights are severely limited – especially in Texas!
According to Harvella Jones, editor of The Texas Homeowner’s Advocate Group, a new POA or HOA in a neighboring community can pull in an area that was not originally part of the POA or HOA. There are neighborhoods in Texas that are currently fighting to keep from being sucked into POA’s or HOA’s. She warns “Watch out for any visits you get from representatives from the HOA trying to trick you into believing they are for your rights. The purpose supposedly is to protect property values, and fund common property but it is really a funding mechanism for cottage industry attorneys.”
Many Texans believe that POAs and HOAs are a modern form of legalized dictatorship. Usually the rules and safeguards of U.S. law and Texas Homestead rights do not apply in POAs or HOAs. San Antonio’s Shavano Ridge Observer warns “Probably few homebuyers realized when they purchased a home in Shavano Ridge that they were signing away many of their Constitutional rights when they signed the CC&Rs”. CC&R’s are covenants, conditions and restrictions that are often buried amid hard to understand legalese. “In the vast majority of homeowner associations the builder writes the “laws” otherwise known as covenants and is the only one with input on how they should be drafted.” In addition, there is no law requiring developers or real-estate agents “to give full and timely disclosures regarding the existence and true nature of the deed restrictions that go along with the property.”
The courts regard POAs and HOAs as "not-for-profit corporations," which are not required to recognize the civil and constitutional rights of its members” – the property owners! The homeowners association is legally viewed as a corporation, and in that way the industry is protected from governmental oversight, while the homeowner remains unprotected from the industry. Current law lets HOAs recover attorney fees when they successfully sue an association member, but it doesn't let homeowners recover fees if the homeowner prevails. HOA and POA homeowner members are not told that the state will not intercede in complaints nor accept complaints resulting in a lack of constitutional due process and equal protection under the law. And there are plenty of complaints in Texas. There were 15,000 court filings by HOAs against property owners in the Houston area alone from 1985 through 2001!
Assessment fees are continuing to rise dramatically as more and more HOAs and POAs retain attorney dominated management firms to run their associations. In addition, assessment fees are rising as management firms team up with insurance companies forcing a variety of increased coverage for common areas. It should be noted that the attorneys retained by the HOAs or POAs DO NOT represent the homeowner members of the associations.
Failure to pay assessment fees can result in heavy fines and eventually a Non-Judicial Foreclosure. A Non-Judicial Foreclosure is how a POA or HOA can easily foreclose on a home without going through any court! Many associations let their boards raise regular assessments up to 20% per year and levy additional special assessments with no membership vote!
The Shavano Ridge Observer (San Antonio) http://home.satx.rr.com/usrw/Unholy%20Triange.htm
The Texas Homeowner’s Advocate Group
A Must Read - Privatopia: Homeowner Associations and the rise of Residential Private Governments
A CID is a Common Interest Development, which includes Property Owners Associations (POAs) and Home Owners Associations (HOAs). One of the most important books written on the subject of CID’s is Privatopia.
“Although millions of Americans have purchased units of CID housing, they have done so without realizing that they were to become part of a collective decision to privatize local government, and without knowing the implications of that decision . . . It is a peculiarly American form of private government in which the property rights of the developer, and later the board of directors, swallow up the rights of the people, and public government is left as a bystander.”
“Covenant enforcement litigation has become a profitable legal specialization for attorneys in states with many CIDs. In many cases, the attorney who advises the board on whether to file suit will handle the litigation and receive substantial hourly fees, raising the question of whether legal advice in these matters is always as disinterested as it should be.”
“Since it was first published in 1994, Privatopia remains the most comprehensive scholarly work on the subject of homeowners associations. The author, Evan McKenzie, was a HOA attorney and is now a professor of political science at Albright University. . . . Dr. Evan McKenzie was one of the first to see the dangers of the new trend of private contractual pseudo-government in common-interest developments.”
To read excerpts from this book go to http://home.satx.rr.com/usrw/Privatopia%20excerpts.htm
The Texas Residential Property Owners Protection Act
Senate Bill 507, the Texas Residential Property Owners Protection Act, authored by Senator John Carona of Dallas and sponsored by Representative Harold Dutton of Houston became effective January 1, 2002. This bill provides property owners (those living in townhomes and single family homes in deed restricted communities) the right to redeem their homes within 180 days after a foreclosure sale by purchasing it back from the buyer for the amount owed in delinquent assessments to the association . . . SB 507 also provides for open meetings of board members, open records for homeowners, and the right of homeowners to request a hearing in front of a committee or the board before incurring attorney fees or fines for deed restriction violations.
Note: Sen. John Carona is the Chairman of the Board for the Largest HOA management Firm in the United States - Principal Management Group. He took a strong stance to get his bill passed without any of the language that would prohibit homeowner associations from foreclosing on delinquent assessments. In effect this watered down bill pleased the HOA Cottage Industry catering to CAI foreclosure lawyers.
“Neighbor Vs. Neighbor” . . .“Fiefdoms bent on control”
Excerpts from an article by Lisa Soru of the San Antonio Current dated 3/4/04
Note: The following excerpts from this article apply to both HOAs and POAs
"HOAs are backed by the Community Associations Institute, a national trade and lobbying group that oversees master-planned communities. Within their subdivisions, HOAs carry the authority of governments but bear little of the accountability. Consequently, these power plays are transforming suburban America - home to 50 million people in 250,000 planned communities - into a lifestyle more Orwellian than Utopian.”
"Homebuyers who purchase in planned communities automatically become HOA members, pay dues, and must abide by the CC&Rs."
". . .critics, including attorney Evan McKenzie, author of Privatopia, contend the CAI has transformed into a lobbying organization for its membership: HOAs, real estate groups, builders, attorneys, and management companies, many of whom profit from the disputes between HOAs and residents."
"The CAI's Legislative Action Committee pushes for laws favorable to its well-moneyed members. In Texas, Connie Heyer is the lead lobbyist, with retired Senator Buster Brown and Association Management Services' Barbara Lowry as part of the lobbying team. In Heyer's report on the 78th legislature, she wrote: "Not one bill that adversely affects homeowners' associations or their members passed. The CAI successfully amended bills or worked toward killing bills that could have been harmful to our industry. "
To read the entire article go to http://home.satx.rr.com/usrw/In%20the%20News.htm
POA/HOA One-party "Contracts" Violate the Homestead Act of the Texas Constitution
According to the The Texas Homeowner's Advocate Group “Commercial, profit-making developers have an unfair advantage--they form one-party "contracts" with "empty" liens on your potential homestead that run with the land before you get an opportunity at closing to create a homestead exemption. You will never supersede a developer's "homestead designation". This practice is done in violation to Article XVI, Section 50, of the Texas Constitution that has never been amended to allow foreclosable "contract liens" on homestead property. The case law Inwood vs. Harris 736, SW2 632 (Tex.1987) has to be repealed and the Property Codes cleansed of all HOA foreclosure language. Also a cap has to be put on attorney fees. Jones Bill No. 1 will repeal Inwood.”
Attorney General of Texas Greg Abbott Opinion Due July 22, 2004
Question: Whether the placement of a one-party foreclosable contractual lien on real property supersedes the homestead rights created by article 16, section 50 of the Texas Constitution. Requested by The Honorable Fred Hill, Chair, Committee on Local Government Ways and Means, Texas House of Representatives, Post Office Box 2910, Austin, Texas 78768-2910
To keep posted on this opinion go to http://www.stoptexashoaforeclosures.com/
Over 50 million Americans now live in homeowner associations, with estimated reserves of over $50 billion.
The American Homeowners Resource Center exists in order to expose the scams and the people behind the scams, so that homeowners can reclaim their property rights and their life savings.
For more information on HOA and POA’s go to American Homeowners Resource Center at http://www.ahrc.com/new/index.php/src/news?ASID=
HOA Lawsuit Registry
The HOA Lawsuit Registry has recently been created to share information to keep homeowners informed of lawsuits all across the United States.
Grand Harbor News
From the Wise County Messenger “County ponders issuing more debt”
Published Sunday, July 12, 2004
“Developers of the Grand Harbor Subdivision, located on a portion of the former Sid Richardson Boy Scout Ranch property on the west side of Lake Bridgeport, will appear to ask for variances in its preliminary plat.Among those variances are reducing lot size width from 150 feet to 100 feet.In return, the county wants the developer to put in a fire protection system that ties into the subdvision’s water supply system.”
See Earlier Commissioner’s Report From the Wise County Messenger “County willing to give in order to get”
Published Thursday, July 1, 2004 “Wise County commissioners offered Monday to do a little trading with the developer of an upscale subdivision on Lake Bridgeport"
"Commissioners told representatives of the proposed Grand Harbor Subdivision they would consider variances sought by the developer in exchange for a fire protection system.
The proposed gated 266-acre subdivision in Precinct 2 would feature one-acre lots. It will have private roads built to county standards, developers said.
Developers want variances to reduce lot widths from 150 feet to 100 feet at streets and sideyard setbacks from 10 feet to 5 feet.
Precinct 2 Commissioner Kevin Burns said he would be willing to consider the variances if the developer would install a fire protection system, including fire hydrants every 500 feet.
That would ensure adequate pressure and capacity, he said.
Fire Marshal Paul Cunningham said it was extremely important that the proposed subdivision have a fire system tied into the development’s private water distribution system.
No action was taken, but Trace Strivey with Baird, Hampton and Brown Inc. of Fort Worth said he believed the developer would be willing to consider the fire protection system. . . .”