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A Variety of HOA Bills Moving Through Texas Legislature
A number of bills are making there way through the Texas Legislature that have a chance a passage:
HB 44, HB 232, HB 362, HB 663, HB 2779, HB 2869, SB 101, SB 142, SB 238, SB 472.
For the text of these bills, and an update on their status, click here.
Do not always trust the caption of the bill because the language of a bill may be different than what you expect and is fluid. The filed version rarely passes as is. Sometimes bills are amended dramatically in committee or on the floor. And once the bill leaves one chamber the process starts over. In other words, the House may pass one version of the bill, and then Senate can then pass another version all within one bill number, and vice versa. For example, HB 44 passed the House in a certain form already, and now is awaiting hearing the Senate. The Senate may substitute in another version or amend it on the floor. If it passes the Senate in a different form then the bill must return to the House. The House can either accept the Senate version or can request that the bill go to a conference committee where members of the two chambers attempt to resolve their differences. If the committee reaches an agreement then the conference committee version goes back to each chamber for approval.
Towards the end of the session other members try to add their bills to bills that are still moving so some amendments can easily change the entire bill.
(The list above is not every bill that could involve HOAs or homeowners that is making its way through the process. There could be other bills pending that could be amended as well that might include a provision impacting an HOA.)
HB 2761 on HOA meetings and records up on House floor
On Monday, May 2, 2011, the Texas House of Representatives will consider HB 2761 relating to HOA meetings and records. A copy of the language of the bill being considered is here. The bill makes some improvements possibly, but leaves many loopholes for HOAs to abuse.
For example, the bill allows an owner to inspect HOA records, or the owner’s attorney or accountant. See page 1. It does not authorize a family member, friend or anyone else to inspect the records of the HOA. This language was no accident. HOAs often deny family members from assisting homeowners living in HOAs, and instead forces them to hire a professional to look at the records. Such a rule is ridiculous and this bill protects this abusive practice.
The bill also only requires the HOA to allow a homeowner to inspect records that are “required to be retained by the association”. Page 2. An HOA may have records that a homeowner wishes to see, but it does not have to show them to the homeowner unless the HOA is required to have kept them. Just another loophole.
The homeowner has to request the records by certified mail, and must do so “with sufficient particularity detailing” the books and records to be inspected. This is another barrier. HOAs will merely deny requests because they are not detailed enough. Often homeowners will not know what the HOA has, so it will be impossible to provide a lot of detail. Again, the bill appears to help, but lets HOAs put up roadblocks.
Under the bill, the HOA has 10 business days (two weeks) to respond, but then the HOA can claim it cannot produce the records that fast and then it gets another 30 business days (six weeks). So it can take two months to get records — this is just too long. Keep in mind that many HOA elections and board meetings give homeowners less than six weeks notice. There is simply no way homeowners can discuss a proposal, consider alternatives and gather information before an election, and this bill provides the HOAs cover to do just that.
The bill protects board members that don’t pay HOA taxes specifically. See page 4. It is well documented that some board members do not pay their HOA taxes, and this bill lets them get away with this practice.
The bill equally prevents homeowners living in HOAs from watching what their board does. The bill allows for meetings to be conducted on the phone, and even allows for decisions to be reached without a meeting at all. Page 6.
What little is in the meetings section of the bill does not even apply to builders who are developing the subdivision (called the “development period”). Builders want to control their developments naturally, but the problem is that they can end up controlling these subdivisions many years while they build them out. Homeowners would like some hard date that they know board members that are freely elected are in charge, and that then have to meet in public and make decisions.
Another glaring problem with the meetings section of the bill is that it does not even require the meetings to be held in or near the subdivision. At present some HOAs hold meetings many miles away for whatever reason (probably to deter participation).
This bill has some improvements arguably, but they are few and far between. The lack of open, transparent operations of HOAs is yet another reason homebuyers should steer clear of buying a home in an HOA.
HOAs Refuse to Even Fill Out a Form When Foreclosing
The Texas Legislature is considering a host of legislation to curb clear abuses by HOAs. Of course, HOAs are known to foreclose or threaten foreclosure whenever they like, even for amounts in dispute as little as $150. When homeowners seek to resolve the matter, often the HOAs want thousands because of alleged attorney fees which have been trumped up by their local attorney with a word processor that spills out form lawsuits (story here). The debate on the wisdom of such collection practices continues in Austin while lobbyists are paid with the huge profits that are generated by HOA management companies and their attorneys.
So it should be no surprise that HOAs oppose even filing out a form then they are in the process of foreclosing on Texas homeowners. (Many HOA reform advocates oppose letting HOAs foreclose at all.)
Texas is one of the few states that does not have official statistics on foreclosure activities at all; there are only estimates provided by companies. Of course the process to foreclose already requires papers to be filled out and filed with the county clerk’s office where the property is located. Legislation such as House Bill 3363 merely requires a one page form be given to the clerk at the same time as the foreclosure papers, and the county clerk then forwards the forms to the Texas Department of Housing and Community Affairs. All the major lender associations in Texas support the bill because it is not burdensome and is simply good government. Homeowner advocacy groups support the legislation because it will make sure Texas has official statistics that show when and where residential foreclosures are occurring. The state agency responsible for collecting and compiling the data feels the task of the legislation is appropriate to do as a part of its ongoing functions (and did not claim it would cost any additional resources to complete).
It is appears the only group opposed to the legislation is — you guessed it Homeowners Associations. They do less than one percent of the foreclosures in the state, or so they claim, yet unlike the lenders who do the lion-share of the activity, HOAs are against the bill. The stats the bill intends to collect will not even identify who is doing the foreclosure. What’s the problem? Are HOAs opposed to filling out a form, or are they just afraid of the stats? Or, do they just want to claim they stopped another piece of legislation and send out emails bragging to their members?
Regardless, HOAs are against even reasonable attempts at transparency. While some praise how much HOAs claim to protect property values and provide wonderful services, they hire lobbyists to kill legislation that by all reasonable accounts if helpful to this state. HOAs time and again prove they, and their management companies, attorneys and lobbyists have run amok.
HOA Attorney Fees: An Unconscionable Racket
Here is another clip, here.
Behind on property taxes? The government does not sue over a few hundred bucks, ever. The government does not slap the homeowner with thousands in attorney fees even if they file suit to recover. The government is not quick to sue residential homeowners occupying a home.
Not true with HOAs. They have a vastly different property tax (they like to call them “assessment”) collection scheme designed to make even more money. HOAs have a close relationship with private attorneys that result in homeowners getting fleeced. HOA management companies sign up attorneys eager to sue, and charge homeowners thousands when the amount in dispute is a few hundred dollars. HOAs love the money the attorneys collect and turn a blind eye to the fact that the attorney fees dwarf the amount the homeowner is behind. HOA boards may not even realize their management companies and attorneys intentionally design a system to make more money with installment agreements with extra fees and charges added each month. To make matters worse some HOA attorneys pad their bills by charging attorney time when a legal secretary or paralegal merely changes a few names on form lawsuits these HOA attorneys file regularly in court. These billing practices are likely fraudulent, but some courts often protect attorneys who submit such fee requests because these fee awards can come back in campaign contributions. And disputing HOAs over such practices is very dangerous because if you fight, the HOA attorney just adds more time to his bill. Only homeowners willing to take huge risks fight HOAs. The HOA attorneys know they have the upper hand and they are not bashful about exploiting homeowners across the state.
The public would not stand for this scheme if it were standard property tax collection activities — but hopefully the Texas Legislature will weigh in this year on this issue.
Update of Texas HOA Bills Posted
An update has been posted of most HOA related legislation, here. Please note that clicking the bill numbers will forward you to more information about the bill including its history and text as found on the state’s website.
As you will see, no House Bills have been sent to the House Floor as yet but many have cleared the first committee and are headed to the House Calendars Committee for consideration. Four Senate Bills have passed the Senate and are headed to the House thus far: SB 101 (Van de Putte) relating to foreclosures on military, SB 142 (West) omnibus, SB 238 (West) relating to solar devices, SB 472 (West) relating to voting.
HOA late fees and attorney fees prevent homeowner from catching up
BRETT SHIPP – WFAA
Posted on April 6, 2011 at 10:20 PM
We’ve heard the complaints for years now… complaints about homeowners’ associations that have gained too much power, even foreclosing on homes for non-payment of dues, fees and fines.
But state lawmakers may be about to strip some of that power away.
Glen Greer of Frisco, who visits his chiropractor several times a week, is desperate for relief.
A chronic back ailment has not only limited his mobility, it has hampered his ability to work and pay his bills on time, including $89 in quarterly dues to his homeowners’ association.
Although Greer says he is current on all his association dues, he is being hit with late fees, attorneys fees, fines, and interest totaling more than $700.
“But because I didn’t pay exactly on time, they slammed me with fees and they kept multiplying them and — of course — I just kept paying my dues, assuming my dues were being paid,” Greer said. “Come to find out they are not. I can never catch up.”
When he asked his HOA for financial relief, he received a letter informing him he was being awarded a $30 credit.
But farther down in the same letter, Greer was informed of a $25 “payment plan processing fee” which all but wiped out the credit.
See the complete story and the video here.
Text of Senate Bill 142 Available
Texas Senator Royce West of Dallas accomplished a major victory yesterday for HOA reform with the passage of SB 142 out of the Texas Senate. The bill heads to the Texas House of Representatives for consideration. The text of the engrossed bill is here (which incorporates the amendments).
SB 142 Passes Texas Senate
Senator West passed SB 142 out of the Senate today is is clearly the best chance real HOA reforms will pass the Texas Legislature this session. The the language of the bill will be available soon and posted.
Texas House Committee Lashes Out Against HOAs
A House committee challenged homeowners associations Monday to consider greater concessions, with lawmakers using their harshest tone yet against groups resistant to compromise.
“At least register so we know who the hell you are,” said Rep. Burt Solomons, R-Carrollton, taking aim at association representatives’ resistance to tighter monitoring regulations. “At the end of the day, we can’t seem to get here with these groups.”
Calling associations “at least quasigovernmental,” Rep. Dwayne Bohac, R-Houston, said that “the scales are still tilted to HOA protections.”
And Rep. Helen Giddings, D-DeSoto, bemoaned a decade and a half of lawmaker discussions with little progress.
“This committee is really challenged,” said Giddings, the longest-serving member of the Business and Industry Committee. “The House could name a standing committee just to deal with HOA issues. That’s how many we have. And it seems like we just don’t move on.”
The story continues here … but remember what legislators say in public and how they vote can be different when push comes to shove. While legislators may feel more HOA reform is needed and say so publicly, in the end many legislators have other priorities they are unwilling to sacrifice in order to take a stand against the well-financed HOA lobbyists, lawyers, and more importantly the Texas builders who impose HOAs on subdivisions as a funding source.
Sen. West’s SB 142 clears committee
SB 142, Senator West’s omnibus bill to address HOA abuses in Texas, cleared his committee this afternoon and will head to the Senate floor next week for possible consideration. Few testified in favor or against the bill; most testified “on” it as resource witnesses. The bill makes improvements in many areas for homeowners, but leaves some exemptions, holes and issues for HOAs to abuse. It is certainly something to build on, but undoubtedly the builder and pro HOA groups will continue to work on it to weaken it further. The text of the bill coming out of committee is here.
HOA Reform Coalition 