Buying into an HOA is far worse than co-signing a note with strangers
A Personal Opinion of Beanie Adolph
Buying into an HOA is far worse than co-signing a note with strangers. A note has a fixed amount, defined terms, and can be paid off. In an HOA there is a lien that can never be paid off. The homeowner is a guarantor for all debts incurred by the HOA, and his house is security for their spending sprees.
The HOA Industry exists on the backs of homeowners. In 2011, The Texas Legislature passed many HOA reform bills which have become law. Some of these new laws have helped homeowners, but the HOA Industry has been scrambling – testing the possible nuances of every phrase – always seeking ways to circumvent the laws to maintain and, if possible, increase its income by taxing, charging and fining homeowners.
The HOA Industry is a business and in Texas its lobbying arm is Texas Community Association Advocates. TCAA is an organization with stakeholders who are involved in community association living. These stakeholders include community associations, board members, managers, attorneys, developers, builders, title companies, management companies, real estate professionals, realtors, homeowners, and others who provide service to those living in deed restricted communities. Most homeowners do not know they are contributing members of TCAA by virtue of their HOA’s donating to the “$1 a door” drive. TCAA’s fundraising budget for 2011 was $375,000.00 and for 2012 is $200,000.00.
TCAA maintains its mission is to promote meaningful legislation to create an environment that supports the development of well governed, well managed community associations, yet the industry regularly opposes homeowner-friendly bills. Even when a homeowner-friendly bill is passed, the industry searches for loopholes.
Homeowners who live in HOAs should have all of the basic freedoms of those who don’t live in HOAs, but that is not the case. Homeowners in HOAs should have open meetings and open records according to standard open government laws (i.e., Texas Government Codes 551 and 552), yet to obtain records they are subject to special HOA laws with many “conditions” and costs. Financial records are not easy to obtain, and the result is that some exploit this for fraud and embezzlement. Meetings should be open to all, yet “executive sessions” excluding homeowners are the norm for far too many subjects. Homeowners should not be subject to fines imposed arbitrarily by private entities when fines should only be imposed by the judicial section of our government. Exorbitant “fines” of $100 to $1,000 have been recently posted for such “crimes” as parking, signage, or unauthorized changes or construction.
Condos as well as townhomes were overlooked in the 2011 session. There have been so many foreclosures that with insufficient income from assessments, maintenance suffered and some condos were condemned as uninhabitable. Owners who had been paying their assessments then suffered. Another problem was caused by investors who purchased the foreclosed properties and then acted in their own interest to the detriment of the owners still there. There were numerous complaints of condos controlled by a very few. By-laws were changed illegally – not with the required percentage of members.
Since the 2011 laws became effective, homeowners have suffered threats, false reports to state agencies, and many more abuses. There is much work to be done in the 2013 legislative session. All Texas homeowners must unite to reclaim their homeowner rights.