Texas Supreme Court Posts New Rules Regarding Foreclosure of HOA Liens

San Antonio HOA Lawyer Trey Wilson wrote:

Today, the Texas Supreme Court posted the final version of its revisions to Texas Rules of Civil Procedure 735 and 736, governing the foreclosure of certain liens, including HOA assessment liens. The Court's full Order is posted here.

The Texas Legislature directed the Supreme Court to enact new rules relating to judicial foreclosures, when it adopted HB 1228 (82nd Leg., R.S.). That Legislation was one of numerous HOA reform bills adopted last session by Texas lawmakers.

The original analysis of the bill provided the following summary of its purpose.

Currently, a property owners' association may foreclose on real property for the property owner's failure to pay association assessments. In many instances, the foreclosed property is encumbered with a first lien that is not disposed of when the foreclosure sale occurs because there is no requirement to notify the lienholder of the foreclosure or the sale. H.B. 1228 sets out provisions relating to notice and providing the lienholder with an opportunity to cure a delinquency before a foreclosure sale.

Stay tuned to this blog for a future post summarizing the new rules and their practical effect.

Notably, the new Rules apply to foreclosures commenced on or after January 1, 2012.

New homeowner association laws in Texas designed to curb abuses

This article from the Ft. Worth Star Telegram contains an excellent summary of new HOA laws going to effect on January 1, 2012.

New homeowner association laws in Texas designed to curb abuses

Sometimes Fences Anger Neighbors... Especially Litigious Ones!

San Antonio HOA Attorney Trey Wilson wrote:

My client, the Zuehl Airport Flying Community Owners Association, was featured in the following article, which appeared in today's San Antonio Express News:

FENCE BESIDE AIRSTRIP AT ROOT Of DISPUTE
Guadalupe County officials accused of RICO violations.
By Zeke MacCormack, zeke@express-news.net

ZUEHL — A fence erected in 2008 beside a rural airfield here in southwest Guadalupe County has spurred a rash of lawsuits, the latest of which accuses dozens of county officials of engaging in organized crime and seeks $31 million in damages.

The defendants deny the allegations made by New Braunfels resident David Goad, whose prior self-drafted court pleadings led to his being declared a vexatious litigant.

Goad claims the fence installed by the property owners association illegally blocks access from the lot to subdivision roads, taxiways and the 3,000-foot airstrip. The fence runs along the edge of a portion of Windsock Lane that is largely undeveloped. The association says the Goad parcel lies outside the platted subdivision, so they can bar access to roads and the airstrip.

Goad's suit also asserts that association members conspired with county officials to deprive Goad of his rights, and to have him and witnesses he called at prior hearings arrested.

Read more in the Express News

83 Year Old Accused of Attacking fellow resident at homeowners meeting in Vero Beach, FLA

By Lamaur Stancil, TC Palm

VERO BEACH — A Vista Royale resident attacked a man speaking during a homeowners meeting Monday, according to an incident report released Thursday by the Indian River County Sheriff's Office.

Arthur C. O'Neill, 83, of the first block of Woodland Drive, Vero Beach, was given a notice to appear for a battery charge. More than 150 people were at the Vista Royale clubhouse, in the 400 block of Woodland, when O'Neill tackled and punched resident Jim Preas at the podium, according to the report.

Preas, 78, said he was discussing a warehouse issue and Robert's Rules of Order when O'Neill charged him at 9:20 a.m. Five people told deputies O'Neill's attack was unprovoked. Preas, a former homeowners board member, said O'Neill has acted unruly at previous meetings.

Preas was not hospitalized, but was still recovering Thursday from the attack, he said.

Deputies said O'Neill denied striking Preas at the meeting, according to the report. O'Neill's wife told deputies her husband suffers from Alzheimer's disease, according to the report.

Two Time Winners of Town's Christmas Lights Display Are Fined by HOA

WELLINGTON, COLORADO — Davin Armstrong is facing his own version of the Grinch this year: a homeowners association that wants to snuff out his Christmas decorations.

Armstrong, 35, and his wife, Amber Hersh, 34, have won the town of Wellington’s Christmas lights display two years in a row, but in June, his Buffalo Creek subdivision HOA passed a rule limiting the amount of permissible lawn ornaments to three, he said.

The HOA is now threatening to fine the family $25 every two weeks until they take the lights down, he said. His display, which has become a neighborhood favorite, exceeds the rule by more than 20.

Read the rest of the story in The Coloradoan.


Note the civic-minded nature of the Armstrong's display -- their home is a drop-off site for the Big Country 97.9 Quarter Million Can Crusade and Lights for Life, an initiative that recycles old and broken holiday string lights to benefit children with cancer.

Gestapo Poop Patrol? Some HOAs Use DNA Evidence to Track Culprits in Dog Turd Abandonment

San Antonio HOA Lawyer Trey Wilson wrote:

Now we've seen it all... Some HOAs are actually using DNA evidence to catch those horrible wretches who inflict one of society's greatest ills upon us all -- dog poop!

A recent trend has community associations nationwide requiring Owners in restricted communities to register their canines' feces so that it can be entered into the PooPrints "crime database" hosted by BioPet Vet Lab in Knoxville, Tennessee. Those "prints" can later be used to match offensive droppings that a dog's owner leaves behind in a restricted community.

According to its website: PooPrints

is the responsible pet waste solution for managed communities and for the environment. Most pet owners are “super scoopers,” but there will always be a few poopers out there. PooPrints works by storing pet DNA profiles for all of the dogs in the community. If waste is found on the ground, the profile can be matched and the management has solved the “who did it” problem.

To get started, a community manager will order a "PooPrints DNA Collection Kit" for each dog on the property. The cost for said kit is ostensibly passed-on to dog owners whose pets are being "profiled." The PooPrints site further claims that "[a]fter the unique database has been created with all dogs on the property, it provides an incentive for all the pet owners to scoop after their dogs." That "incentive" is most likely a fine, if a determination is made that an offensive pile belongs to your dog.

As expected, there are critics of the program -- many on privacy grounds, and others because a dog need-not be an offender before being mandated to submit a "sample." So far to my knowledge, nobody has tested the program's legality (if this isn't an unreasonable search and seizure, there may be no such thing).

Nobody disputes the fact that there are health concerns associated with dog poop. That's not to mention its generally annoying qualities -- especially if those qualities end-up on your shoes. Nevertheless, in my humble opinion this idea fits in the "get a life" category! And I write as the owner of two enormous Labrador Retrievers, and the person charged with picking-up their sizable "offerings"

That being said, I do see that there may be franchise opportunities here in San Antonio....

Commercial Tenants Should Review Restrictions Before Signing Lease

San Antonio HOA Lawyer Trey Wilson wrote:

Restrictive covenants and Property Owners Associations that enforce them are generally associated with residential communities. However, many commercial developments, including strip centers and office complexes have a condominium ownership arrangement. Even where a multi-unit commercial development is owned by a single individual or entity, there usually exist shared "common areas," available for non-exclusive use by all tenants. Frequently, these commercial developments are governed by Restrictive Covenants (or a "Declaration") which limit the types and scope of activities permitted by Owners and Tenants in the development.

Properly-recorded Restrictive Covenants usually "run-with the land" and are applicable even where a Tenant has not been provided a copy. Commercial tenants sometimes enter into leases that expressly authorize them to conduct activities or engage in practices that are prohibited by the applicable covenants. While this situation sometimes arises as the result of unscrupulous acts by a Landlord, most often, the Lessor, himself, is unaware of the language of the Declaration -- especially if the landlord is simply an investor who has never occupied the property. Imagine the surprise of the Tenant who receives notification from the POA or a neighbor that their use of the leased premises is unauthorized and/or expressly prohibited by the Declaration!

To avoid this situation, commercial interests should insist on receiving and reading a copy of all applicable Restrictions PRIOR TO entering a lease, or investing in the build-out of a commercial property. The provisions of a lease will almost NEVER trump valid Restrictive Covenants, and ignorance of the contents of the Covenants is no excuse. To be sure that the intended use is not prohibited, a wise commercial tenant will contact an experienced lawyer to review the terms of the commercial lease, and to identify any prospective problems with applicable restrictions.

Fourth Court Waters-Down Homeowner's Victory Against HOA

BOTH SIDES SWALLOW THE LION'S SHARE OF THEIR OWN ATTORNEYS' FEES

On December 7, 2011, the Fourth Court of Appeals in San Antonio released its opinion, on rehearing, in a case where a Bexar County jury punished a local HOA and its attorney for pushing too aggressively in its efforts to collect past due assessments. The case received extensive media coverage when the verdict was first rendered in June, 2010.

The suit, Hidden Forest Homeowners Association, Inc. vs. James Hern was originally tried to a jury before Judge Martha Tanner. Following trial, the jury returned a mixed verdict requiring Hern to pay around $946 in past due assessments, plus the HOA's attorneys' fees of $728.00. **Notably, the Association had asked the jury to award attorneys' fees in the amount of $25,000.00** The jury also found that the Hidden Forest HOA engaged in unreasonable collection practices, and violated its own restrictions by attempting to foreclose on Hern's home and take an individual judgment against him. The jury awarded Hern $11,000.00, denied Hidden Forest's request for judicial foreclosure, and ordered the HOA to remove its assessment lien placed on Hern's home.

The HOA filed an appeal seeking to set aside the award to Hern, and the measly award of attorneys' fees to the Association (which approximate less than 5% of the amount sought by the HOA). Upon analyzing the verdict, the appeals court found that the HOA did not breach its covenants, or engage in unreasonable collection practices. Accordingly, Hern's verdict for damages was reversed.

With regard to the collection efforts, the Court did add this proviso:

Although we do not condone Hidden Forest’s refusal to accept Hern’s prepayment and subsequent settlement offers, we cannot say that its collection efforts were harassing or outrageous. Hidden Forest did not repeatedly call Hern or send letters to his home or business.

The Court refused to side with the HOA in its claims that the jury's award of only $728.00 was against the great weight of the evidence, and should be increased to $25,000.00. Despite the fact that the HOA's attorney testified that he personally spent 75 hours on the case (at $250/hr) , his associate spent over twelve hours on the case (at $200/hr), and his legal assistant spent almost 26 hours(at $125/hr), the Fourth Court found that:

the jury was aware of the simplistic nature of Hidden Forest’s case, which merely sought to recover assessments that Hern admitted he had not paid. The amount Hidden Forest sought in attorney’s fees was more than 26 times the amount it recovered due to Hern’s failure to pay assessments. The jury could have rationally determined that 3.78 hours was a reasonable amount of time to expend in legal services for this case (dividing $728 awarded in attorney’s fees by Newton’s hourly rate of $250).

A full copy of the Fourth Court's opinion can be found here.

In the end, it appears that the HOA spent a bunch of time and money to collect an amount that the homeowner was willing to pay all along. Spending attorneys' fees chasing attorneys' fees is never a good ida, especially in the arena of HOA litigation. Not surprisingly, though, local media reports that both sides are claiming victory in this dispute.

How is an Annulment different from Divorce in Texas?

A divorce legally terminates a marriage. While you are no longer married, the marriage was legally valid at the time.

An annulment dissolves a voidable marriage by declaration that it was legally invalid. From a legal perspective, after an annulment, it is as if the marriage never existed.

There is also a difference between a “voidable” marriage and “void” marriage. A voidable marriage is valid and recognized until it is annulled and declared legally invalid. On the other hand, a void marriage was never valid or recognized. For example, a marriage is voidable and can be annulled if one of the parties was under the influence of alcohol or narcotics at the time of the marriage. However, this marriage will be valid unless an annulment is sought. A marriage is void if, for example, one of the parties is currently married to a third party at the time of the marriage. This marriage is invalid and will not be legally recognized.

Texas law allows an annulment only in very specific circumstances and only if the party seeking the annulment can prove certain necessary facts.

Because seeking an annulment is asking the court to declare that the marriage was void and never existed, seeking an annulment rather than a divorce can affect the processes people typically associate with a divorce such as the division of property, and all potentially affected aspects should be carefully considered.

The articles following later this month will discuss the specific grounds for an annulment in Texas.
References: Texas Family Code 6.101 – 6.206

Article by Sarah F. Berry, Attorney

11 Ridiculous Laws Still on the Books

From Reader's Digest

See a slideshow of 11 ridiculous, antiquated or downright strange laws still in effect today.

Happy Reading!

Waivers and Releases for Liens and Payment Bond Claims

During the 82^nd Legislative Session, House Bill 1456 was passed which provides statutory forms for waiver and release of mechanic’s liens and payment bond claims. Four statutory forms were created: (a) Conditional Waiver and Release on Progress Payment; (b) Unconditional Waiver and Release on Progress Payment; (c) Conditional Waiver and Release on Final Payment; and (d) Unconditional Waiver and Release on Final Payment.

The new law is effective for contracts entered into on or after January 1, 2012. In order for a waiver and release to be effective, the form of lien waiver and release must be in substantial compliance with the statutory forms.

The new law is set out in Subchapter L added to Chapter 53 of the Texas Property Code entitled “Waiver and Release of Lien or Payment Bond Claim.” The text of the new law can be found here.

Article by Sarah F. Berry

Colored Christmas Lights Draw Fine - Video from CNN

WOMAN BATTLES FOR COLORED CHRISTMAS LIGHTS
A woman was fined $400 by her HOA for putting up colored Christmas lights last year, and she's at it again. Watch the video on CNN.

Mistrial Declared in Criminal Trial of Dallas County Constable Derick Evans

A jury had been chosen and opening statements had been given by Marquette Wolf as Special Prosecutor and the defense for Dallas County Constable Derick Evans and on Tuesday, the trial had witnesses on the stand in the criminal trial where Constable Evans faced charges of engaging in organized crime.

There were some problems: one juror was late, another called in with an emergency and had to be replaced with an alternate, and witness Jim Foster, former Dallas County Judge, couldn't respond to his subpoena to appear and testify because he's in the hospital having just had serious lung surgery.

But nothing was as big a problem as what happened to cause the trial court to declare a mistrial in the case.  Seems that after the prosecution put on its case and Evans presented his defense, the jury was sent back to deliberate and got stuck.

Judge Tracy Holmes got a note from the jury room that the twelve jurors were "hopelessly deadlocked," and then another one, and then a third.  Deadlocked, Deadlocked, Deadlocked.  Stubborn folk on both sides of guilty versus innocent.  (The Dallas Morning News reports they were 7 to 5, guilty vs. innocent.)

So Judge Holmes declared a mistrial and Constable Evans went back to work and the prosecution told the media that they're not giving up.  Another trial is being scheduled for April 2012.

What Did Dallas County Constable Derick Evans Allegedly Do?  

Formally, Constable Evans has been accused of participating in organized crime.  Sounds very TV Law and Order, doesn't it, until you learn that he's purportedly run a raffle to get funds to run his election campaign and allegedly pressured his deputies and staff to buy and promote the $50 raffle tickets.  Under Texas law, only certain groups (like churches) are legally allowed to run raffles to raise money.  Now, it's sounding less like TV's Law and Order isn't it?

And, here's a big question -- what about the media reports about other local campaign raffles, are they going to get prosecuted as well?

Can I Seek Custody of Someone Else’s Children?

Blended or complex households may involve raising step-children or even the children of friends and other non-relatives, often for a variety of practical economic and social reasons. But typically a non-relative does not have the legal right (called “standing”) to seek a court order for custody or to be appointed as that child’s conservator.

However, the Texas Legislature has recognized that, under certain circumstances, a non-relative can have enough involvement in a child’s life to be entitled to seek rights typically reserved for that child’s parents or other relatives.

Specifically, a person who has “actual care, control and possession” of a child for at least six months can file a petition to seek to be appointed as that child’s conservator, even when the child is not related by blood or marriage. The petition must be filed within 90 days of the child leaving the applicant’s actual care, control and possession. In this situation, “actual control” means that the applicant had power or authority to guide and manage the child.

So, for example, if the child of a friend has lived with you during the past year while attending school with your own children, and that friend is unable to return to care for the child (due to death, illness, financial misfortune, or other circumstances), you would have standing to file a petition asking the court to appoint you as the child’s managing conservator. Often, this arrangement can be temporary and does not involve terminating the rights of the child’s actual parents, but provides you with legal rights and authority (as described in the court’s order) related to the child’s care, possession and upbringing.

Article by Cindy Veidt.

Disaster Remediation Contracts

The 82^nd Texas Legislature passed House Bill 1711 to regulate “Disaster Remediation Contracts” which became effective on September 1, 2011. House Bill 1711 is now Chapter 57 of the Texas Business & Commerce Code and regulates contracts for “the removal, cleaning, sanitizing, demolition, reconstruction, or other treatment of improvements to real property because of damage or destruction to that property caused by a natural disaster.”

A disaster declaration is made by the governor and a recent example would include the wildfires throughout Texas. Other examples would include hurricanes and tropical storms that devastated the Gulf Coast.

The new legislation requires a written contract that includes specific terms and disclosures. Failure to comply is a “Deceptive Trade Practice” under Chapter 17, Texas Business & Commerce Code and can result in a wide range of penalties.

There are a few exceptions to the applicability of the new legislation. Notably, the new statutory requirements do not apply to “local” contractors which are contractors that maintained a physical business address in the county in which the property is located or a county adjacent to the county in which the property is located for at least one year preceding the date of the contract.

If you are soliciting contracts in areas under a disaster declaration, you should review your contracts to ensure that the new required terms and disclosures are included.

Article by Sarah F. Berry, Attorney