Marine’s lawsuit spurs one of new HOA laws in Texas

June 13, 2011, story by MIKE MORRIS, HOUSTON CHRONICLE

(a portion of the story appears below with a link to the complete story)

A Marine Corps veteran sued by his Cypress-area homeowners association over a 20-foot flag pole in his backyard is claiming victory as a bill protecting his display of patriotism awaits Gov. Rick Perry’s signature. [An explanation and text of the bill is here.]

The bill, spurred by the lawsuit against former drill sergeant Mike Merola, is one of several on the governor’s desk that would restrict the powers of homeowners associations. Others would increase transparency, bolster owners’ voting rights and prevent the groups from banning solar panels and small religious displays.

The most important reforms, real estate attorney Richard Weaver said, are those dealing with foreclosure and dues, including one that would introduce a “priority of payments” to ensure that payments from owners who have fallen into arrears would be applied to the past-due amounts first.

“In the past, the HOA might have used homeowner funds to pay attorneys instead of delinquent fees and still try to foreclose,” said Weaver, who has represented both HOAs and homeowners for seven years. “By paying the delinquent fees first, a homeowner may avoid foreclosure.”

HOAs also would be required to provide better notice before sending an owner’s account to a collection agency and before foreclosing, and would be forced to let homeowners pay their annual dues in installments over at least three months.

‘Not enough’

Weaver and real estate lawyer David Kahne, who has represented homeowners in suits against HOAs for more than a decade, said the reforms, though an improvement, are insufficient.

“The reforms that appear likely to pass are clearly not enough. Homeowners need more protection,” Kahne said.

“The Legislature has paid an increasing amount of attention to those homeowner associations that have been abusing their powers,” he continued. “By setting limits on some of those powers, the Legislature is directly protecting homeowners and sending a signal to all associations that they need to be more respectful of the rights of homeowners.”

Real estate attorney Bruce Schimmel, who has represented HOAs and homeowners for three decades, disagreed, saying lawmakers had “gone overboard,” though some proposals would clarify years-old legal questions.

“When the Legislature hampers associations’ collection of their fees and requires them to give additional notices and go to court, it adds layers of procedures that are very costly and very time-consuming and which, ultimately, end up being paid for by the delinquent owner,” Schimmel said.

Sen. Royce West, D-Dallas, whose interest in HOA issues began five years ago when his office was flooded with homeowner complaints, said the bills are sufficient to curb HOA abuses.

“We truly have provided a more democratic process for homeowners to govern” HOAs, West said. “What we have to do is just monitor the implementation of the reforms … to determine whether there were any gaps in what we did.”

For the complete article see:

Posted on June 26, 2011, in Newsroom. Bookmark the permalink. Comments Off on Marine’s lawsuit spurs one of new HOA laws in Texas.

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