Bexar County Jury Awards HOA $208K from former President and Lawyer

San Antonio HOA Lawyer Trey Wilson wrote:

A jury has spoken in the somewhat protracted dispute between the Ventura s HOA and various owners of properties in that northeast Bexar County subdivision. The former HOA President and its former attorney were hit with a whopping $280K verdict on December 21, 2012.

Watch the videos from WOAI TV below.

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

Texas Legislature Passes 18 HOA Reform Bills in the Waning Moments of 82nd Legislative Session

Last night the fat lady sang, and we're "done" for 2011. Even if the Governor calls a Special Session, POA laws won't be on the agenda again (assuming no horrorific gut-wrenching headlines) until the 83rd Legislature meets in January 2013. That gives us a year and a half to figure out the many new POA laws that are going into effect between now and year end, and identify any fixes that may be needed.

WHAT PASSED?

18 POA Reform Bills have been sent to Governor Perry for the last step in the law-making process.

The 18 bills, together, constitute 30 independent law changes (by my count). If you have been watching specific POA Bills by number, here are the statewide POA-specific bills that passed: HB 8, HB 362, HB 1127, HB 1228, HB 1278, HB 1737, HB 1821, HB 2761, HB 2779, HB 3391, SB 101, SB 472, SB 498. These are the "bracketed" POA-specific bills that passed: HB 232, HB 364, HB 1071, HB 2702, HB 2869.

Whether you like the law changes or not, they are game-changers. A new day is dawning.

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GOVERNOR'S ROLE

After the Legislature finishes with a bill, it goes to Governor Perry, who has three options. He can sign the bill. He can veto the bill (all or nothing - no line item veto). Or, he can ignore the bill in which case it becomes law by its own terms. The Guv's options expire on June 19th.

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EFFECTIVE DATES

Most of the POA bills have specific dates on which they become effective - either September 1, 2011, or January 1, 2012. A few bills were written to become effective "immediately". When is that? If the Governor signs the bill, the date he signs is the date it becomes effective. If the Governor doesn't sign or veto, it becomes effective at the end of the veto period - on June 20th.

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GETTING OUT THE WORD

"THE MEDIA" in Texas (and some of the anti-HOA blogs) has been duped into thinking that no meaningful HOA reforms were passed this Session. You've seen the headlines. We've got to correct that false impression, else the word will not filter down to the thousands of Texas POAs that are not connected to each other or to a reliable source of information about law changes.

Many of the POAs in Texas are small and self-managed. They plod along decade after decade in reliance on their POA documents and "the way we've always done it." Same is true of POA managers and POA lawyers who work with only one or a few POAs ~ they may be clueless about what's happening in Austin. They mean no harm, they just don't know any better. Hopefully the managers and lawyers who handle large numbers of POAs are in-the-know.

In order for the new reforms to work, everyone connected with Texas POAs needs to know about the law changes. For that, we need THE MEDIA. The same MEDIA that pummels POAs when they act badly now needs to beat the drum for the law changes so POAs can get on the right page. It's not fair for THE MEDIA to hide behind a log waiting to catch a POA violating a new law, when THE MEDIA doesn't do its part to reach the POAs with news of these sweeping law changes.

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WHERE TO FIND THE NEW LAWS

It may take months (many months) for publications of the Texas Property Code to be "amended and restated" with the Session changes. The State's own website announces that its online statutes and codes won't be updated until 2012. And it may be Fall 2011 before West Publishing produces its paper versions of the updated statutes and codes. CAUTION. If you put your hands on a paper version of the Texas Property Code, you can be pretty sure it's out of date regarding POA laws.

What to do in the interim? From the Legislature's FAQs . . ."Before the statutes are updated, use Texas Legislature Online to search, by subject, for enrolled bills and read summaries of the enrolled bills. Use the Index to Sections Affected tool to determine whether statute sections of interest to you were amended by any bills passed."

My recommendation, go to Texas Legislature Online, click on "Legislation", then on "Bill Look-Up." Enter the Bill Number ) from the attached chart, making sure the website is set for the 82(R) Legislature - 82nd Regular Session. (That's the default now, but may change if Gov. Perry calls a Special Session.) For "Information Type" select "Text." On the Text page, select the "Enrolled" version . . . the one at the bottom. You'll have a choice of Adobe, Word, and HTML versions.

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HOW TO LEARN ABOUT THE NEW LAWS

It's going to be a scramble. Texas attorneys need time to get up to speed on the law changes so we can discuss the changes with our clients. Although some POA managers and directors are very knowledgeable about the new laws (and the old laws), attorneys licensed in Texas are the go-to resource for the effect of law changes. That's our job.

POAs with the wherewithal would be wise to schedule meetings with their lawyers, whose calendars may fill quickly during the transition period. Some large management companies may sponsor educational programs for their members. Some large management companies may do the same for their clients. Be on the lookout for programs and attend as many as you can. There may be more than one way to interpret and implement the new laws.

This post courtesy of Sharon Reuler.

Trey Wilson Completes Arbitration Against Regency Park HOA

Our firm recently completed an evidentiary arbitration proceeding wherein we defended residents of San Antonio's Regency Park subdivision against claims made by that community's Homeowners Association. The dispute began in 2006 when our clients first request permission from the RPHOA's Architectural Committee to construct a swimming pool. The RPHOA and its ACC failed to respond for several months, but later engaged in a course of majing absurd demands of our clients.

By October 2007, the HOA still had not made a final decision, despite our clients submitting multiple applications, hiring a landscape designer and a professional enginerr-- all at the HOA's request. When the HOA failed to respond to our clients' final submission, they obtained "presumed approval" according to the terms of the applicable restrictions. Thereafter, our clients commenced construction of their pool. The HOA then filed suit and obtained a TRO preventing further construction.

Shortly after the TRO was issued, the HOA approved the swimming pool design, and construction was completed. The Association, however, sought to collect its attorneys fees associated with the TRO. The homeowners hired RLWPC on the eve opf trial over the attorneys' fees issues, and successfully had the lawsuit abataed and referred to arbitration as provided in the restrictive covenants.

A lengthy arbitration session was conducted by the Honorable Juan Gallardo -- a former district judge. Judge Gallardo's arbitration award is expected in the very near future.

Deed Restrictions -- They Aren't Always Forever !

Many, many homwoners who are disgruntled with a neighbor or with their own HOA underestimate the importance of closely reading applicable deed restrictions (CC&R's). I'm always amazed at the number of people seeking legal representation against their HOA, but who don't even have a copy of their CCRs or Association By-laws.

That's right. That small type-face, fuzzy, packet you were given at the closing upon your home is importance. Too many times, homeowners either glance over the restrictions just once at closing, or never bother to look at them at all. They then get filed away, or thrown away, with little thought. This is a mistake, though,m because the restrictions can carry tremendous implications for property values, neighnborhood regulation, and assessing the authority of your HOA Board.

In some cases, we have determined that particular CCRs have expired, or that some mandatory condition required to give them continuing force has never occured. In those instances, the restrictions are usually legal nullities that cannot be enforced. When serving as lawyers representing owners against their HOA, a discovery that the CCRs are non-enforceable is a powerful weapon that almost always carries the day. However, the absence of restrictions/covenants cuts both ways, and can carry several negative implications for all property owners in a given development.

Determining the Effectiveness of CCRs:

Covenants/Restrictions are placed upon subdivisions by the original developers who plat them. Those developers then go about selling individual lots to future residents, or selling the enitire development to a homebuilder who then builds homes upon the lots and re-sells them, individually. In either instance, the developer is often long-gone before the subdivision is fully built-out and occupied. Ususally, he's gone-on to develop his next subdivision.

The restrictions enacted by the developer often have expiration dates 20 to 30 years after they are adopted. Those CCRs may also contain procedures to transfer control of the subdivision to a Homeowner's Association (HOA). In those instances, the HOA becomes the "enforcer" of the CCRs. However, unless there is some action taken to extend them, the CCRs still expire.

In other cases, an HOA is never formed, is improperly formed, or is formed before power to enforce the restrictions is properly transferred away from the developer (or his successor). Each of these situations may result in an inability to enforce restrictions.

Good and Bad:

Like all institutions, HOAs have good and bad aspects. Homeowners seem to enjoy the stewardship of HOAs who clean community pools, keep gates in good working order, erect Christmas lights, and prevent cell phone towers from being erected in enighborhoods. But, when the HOA spirals out of control on issues like yard watering, car bumper stickers, backyard swingsets and the like, they can be downright nasty.

In the end, well thought-out, equally-enforced restrictions probably benefit all owners of lots within a given subdivision because they promote uniformity, land-use integrity, and the common interest in preserving home values.

If faced with a dilemna regarding enforceability of CCRS, one should start with a good reading/review of the restrictions, including any expiration dates. When in doubt, contact a lawyer with experience in HOA law, including interpretating and litigating restrictions. A strong HOA lawyer can be an invaluable asset in understanding your rights and responsibilities within the context of community living and community associations.

New York Attorney General's Open Letter About Homeowners Associations -- Though Not Controlling In Texas, Interesting Nonetheless

HOW TO HANDLE PROBLEMS WITH YOUR HOMEOWNERS ASSOCIATION

Members of homeowners associations who are unhappy with how their association is acting (or not acting) often do not know what they can do. This paper is designed to tell such homeowners about some of their rights. In most cases there is no government agency that can help unhappy owners who are having problems with their homeowners association (HOA). The Attorney General's office regulates only the offer and sale of real estate securities (which includes interests in HOAs). It generally does not become involved in owners’ problems with boards of directors after the sponsor is no longer in control of the board. However, this office may be able to help you if the sponsor of the HOA is not keeping the commitments which it
made in the offering plan.

As you may know, a homeowners association is an organization established to govern a private community. Typically it owns and manages some common property for owners of private houses or condominium units. By buying a lot and/or home, an owner automatically becomes a member of the HOA of which it is a part. Before offering to sell memberships, a sponsor must file an offering plan with the Attorney General if sales of individual homes, lots or condo units are involved, unless it is exempted by law or regulation.

Most HOAs are corporations established under the Not-for-Profit Corporation
Law. An HOA is similar to other corporations -- it is governed by a board of directors elected by the members and a set of rules called by-laws. Books and records of financial transactions must be kept, taxes paid, and certain services provided to members. Usually the board has an annual budget prepared to estimate expenses, and then assesses each member a share of the costs.

HOAs vary greatly in the services which they provide. The developer establishes the scope of the association initially by setting out the services and expenses
in the association's budget. The declaration provides the means by which the association can enforce the members' obligations and the by-laws set forth the procedures for running the association. Generally, the developer controls the association at first and relinquishes control to the individual owners some years later.

The primary purpose of the association is to protect and preserve the value of the privately and commonly used property. In furtherance of that goal there may be
restrictions concerning pets; requirements as to fence height; or limitations on the number of cars allowed in the driveways. These rules often conflict with the desires of an individual owner but exist for the general good of the entire community. In addition, the association may have the responsibility to repair and maintain portions of the community, such as roads, roofs, and recreation facilities.
The individual owner in a homeowners association has the opportunity to become involved and participate in the on-going affairs of the community, and the
responsibility to assure that the association's actions conform to the by-laws and
declaration.

Typical Problems

Perhaps your HOA seems dormant -- you never receive notice of meetings, nor are you given financial statements which explain how the assessments you pay are being spent. Perhaps repairs are neglected and snow not removed as quickly as you
expect. Or a nuisance created by your neighbor is allowed to continue. Maybe one owner is allowed to build a deck and another is refused permission to do the same thing. These problems may arise while the association is still under the developer's
control. Be aware that the HOA is an independent body whose functions must not be
merged with the corporate functions of the developer. The developer creates and controls the association initially, but has a duty to protect the investment of the members and to respond to the needs of the association with a sense of fairness and good faith. From the time of the first closing with a member, the developer must abide by the terms of the offering plan, the by-laws of the association and the declaration in the same way that a later independent board must.

Get the Facts

The way to begin dealing with your problems with the board is to understand what rights you have. There are two kinds of research to do.

A. Check the documents for your HOA -- the declaration, certificate of incorporation, and by-laws. Copies of these document should be available from the board of directors or developer; a copy of the declaration and by-laws is in your offering plan.

These documents should include information on:
. what the HOA is responsible for
. how the declaration can be amended (including percentage required)
. how members of the board of directors are elected
. how members of the board can be removed
. the powers and duties of the board of directors
. how annual owner meetings are called
. how special meetings are called
. what remedies exist when a homeowner defaults on his or her obligations including maintenance charges.

B. Look at the Not-for-Profit Corporation Law, the New York State law which
governs the establishment of most homeowners associations. The decisions made by
courts in cases involving the law are the case law which interprets the statute.
The Not-for-Profit Corporation Law (NPCL) is published as volume 37 of McKinney's Consolidated Laws of New York Annotated ("McKinney's") which can be found in law libraries, many lawyers' offices, and in certain public libraries. Included in volume 37 are brief descriptions of case decisions. Important provisions of the NPCL and the sections in which they are found, include the following:

An HOA may have different classes of members. NPCL §601.

By-laws may be adopted, amended or repealed by the members with the appropriate vote, as provided in the by-laws. NPCL §602.

A meeting of the members is to be held annually. NPCL §603.

Members may call special meetings, as authorized in the certificate of
incorporation or by-laws, or if at least 10 percent of the members wish to do
so. NPCL §603.

Directors may be elected at a special meeting. NPCL §604.

Proxies (authorizing another member to vote for you) are permitted subject
to provision in the by laws or certificate of incorporation. NPCL §609.

Members may request that elections be supervised by an inspector. NPCL §610.
The right to vote may be limited by the certificate of incorporation or by-laws.
(For example, there may be no right to vote until the developer gives up
control.) NPCL §612.

Action may be taken on written consent of members without a meeting.
NPCL §614.

Members may demand to see the corporate books and records of accounts, minutes of meetings, and a list of members. NPCL §621.

A derivative action may be brought by five percent or more of the members of the corporation. NPCL §623.

Directors may be removed with or without cause, as determined by the certificate of incorporation and by-laws. NPCL §706.

Unless restricted by the certificate of incorporation or by-laws the board of
directors may take action without holding a meeting if all members of the
board consent in writing to the action. NPCL §708.

Certain actions by a director or officer constitute a conflict of interest, and
may be void or voidable if no disclosure was made. NPCL §715.

Directors and officers must act in good faith and with reasonable diligence,
care and skill. NPCL §717.

Directors and officers may be sued for misconduct. NPCL §720.

Resolving the Problem: First Approach

If the board of directors is not complying with its own certificate of incorporation, declaration or by-laws, you should point this out, in a tactful way, expressing the expectation that the matter will be corrected. Sometimes this is all that is needed to solve a problem. If a simple oral request to an officer of the board fails, you can write a letter. It should be factual, brief and not hostile. Keep copies of any letters that you send, and notes of telephone conversations (the date, time, who called whom, and the gist of the discussion) in case the matter is not quickly resolved. An attempt to influence the board is always more persuasive if it is presented by a significant number of members. If your problem is one that others are affected by, it is worth organizing the other members. If you do, and the attempt to change the situation is not successful, the organized group can always seek to elect new directors at the next annual meeting.

Retaining a Lawyer

If your efforts to resolve your problems with the board fail, you may want to
retain a private lawyer. The Attorney General's office cannot recommend private lawyers. However, a few points may be helpful.

. It is a good idea to select someone with experience in handling HOA problems. You
could begin looking for an attorney by talking with members in your or other HOAs and with attorneys in other specialty areas. If this fails, you may wish to contact a local Bar Association for referrals.

. Some lawyers will not charge for a single initial consultation or will charge only a minimal fee.

. Most lawyers will attempt to resolve any matter through negotiation before considering litigation, as litigation is costly and usually lengthy. Litigating against the board of an HOA, people with whom one lives, can also be very unpleasant.

In Conclusion

If serious problems arise, which the board is not addressing, such as a bank's
threatening to foreclose on a mortgage on the Association’s common property or a
developer's failing to pay common charges on unsold houses or lots, it is important to act swiftly. Often such problems can be resolved, relatively simply, if members organize and act right away. Remember that members of HOA boards are usually other owners who are serving without pay. They generally want to resolve problems and keep peace in the community.

Good luck!

Attorney General of the State of New York

San Antonio HOA Sells Disabled Couple's Home

From WOAI.com

Every day is a struggle for Dan and Elaine Lambert. Dan has a traumatic brain injury and is partially paralyzed. He was struck by a train while working for the railroad. Since the accident, he's had two strokes and four heart attacks. Elaine says she went for six or seven weeks with open sores on her legs. She suffers from a disease that causes painful sores and swelling in her legs and has bouts of severe depression.

With their belongings already packed after getting an eviction notice from the new owner, Dan and Elaine each take some of the blame. The couple says the HOA dues were simply not a priority as they dealt with getting through their illnesses. They say certified letters from the HOA's attorney went unopened or thrown out because they thought it was junk mail.

Still, they think the HOA has gone too far. "There's no way in hell this association should do this to retired people or disabled people," Dan told us.

Homeowners' association usually don't do sell homes of those who owe them money. Instead, if you don't pay your dues, the association slaps a lien on your house. That way you have to pay up before you can sell it.

Instead filing a lien and leaving it at that, the Heritage Hills HOA took the unusual step of foreclosing and selling the house. The Lambert's home sold at a public auction on the steps of the Bexar County Courthouse. The house valued at $156,000 sold for only $2,200. That is the amount the Lamberts owed after late fees, attorneys fees and interest were added.

Tom Newton is the HOA attorney who sold the Lambert's home. "I'm not kicking anybody out of their house," he explained to the Trouble Shooters. "What I'm doing is holding them to the obligation they accepted when they bought the property."

Trouble Shooter Brian Collister asked Newton, "[Do] you feel comfortable kicking a disabled family out of their home for a few hundred dollars in HOA fees?"

Newton replied, "I feel comfortable in taking those steps necessary to enforce my client's legal rights, and if that means that ultimately somebody may go through this foreclosure process, it's unfortunate, but it is a consequence of their own making." During all of this, no one with the HOA or its attorney ever picked up the phone and called or came to the Lambert's home. They never simply knocked on the door and tried to talk to them about why they were not paying their fees.

Collister asked Newton about this; "Don't you think if you're going to take their home away from them you should at least go talk to them face to face?"

"No, I don't," Newton answered, "I don't, and I'll tell you there are some people out there who have whatever sort of issues they have. They become violent when you approach them about their shortcomings or failure to abide by their obligations, and I think it is a dangerous situation."

The Lambert's say they're not dangerous or violent. They're just surprised that a homeowners association can go so far because they owe so little. The HOA says it sent the Lamberts certified letters during the three years they did not pay their dues, and they had plenty of opportunities to pay up and keep their house.

Wednesday, the Lamberts sit down with the HOA and the investment company that bought the house. They're going to try and come up with a way where the Lamberts can keep their home. We'll let you know what happens.