Home Owner Associations Growing In Power While With Little Oversight Or Transparency (The FCCA Controversy In Sugar Land & What It Has Taught Us)

By, Nancy Hentschel

Home Owner Association (HOA) and Property Owner Association (POA) living is advertised to promote sales and to manage the homeowner population, but these “corporations” are specifically designed to disenfranchise most if not all the homeowners in the subdivision.

The HOA corporation is frequently controlled by the developers, builders, or even the vendors of the HOA corporation, such as the HOA management company and HOA attorneys.  These entities seek legislation to give the HOA board (and therefore its agents) ever more control over the property belonging to the homeowners.

This latter group has formed their own trade organization (Community Associations Institute), which not only lobbies for anti-homeowner laws but also uses funds from HOA corporation coffers (their “client”) in order to pay for the lobbying expenses. One should note that these HOA funds were taken from the homeowners under threat of foreclosure (from assessments).  The foreclosure power is used primarily to benefit these vendors, not the homeowners of the HOA.

Even HOAs that are self-managed often unwittingly have board authority usurped by slick talk from CAI member vendors.  The CAI often masquerades as an “educational” organization but it is actually trade-lobby group operating for the benefit of HOA management companies and HOA attorneys. Many of these CAI management companies offer “educational classes” to indoctrinate gullible board members.  Conscientious homeowners that pose a threat to the gravy train often find themselves threatened with “fines” and lawsuits from these CAI vendors either via the proxy of the HOA corporation or direct threats from the CAI vendors themselves.  These vendors routinely work to ensure that the vast majority of the homeowners are disenfranchised from voting, access to records, running for elections, etc.  They seek to cause the HOA corporation to incur debt – in unlimited amounts and have adopted public policies opposing any limitation on assessment increases.  You see, most of these organizations are in the business of creating false debt (to themselves) via the HOA corporation and then using the HOA corporation’s foreclosure power to extort the money from the homeowner.  Not surprisingly, CAI also opposes the applicability of the Fair Debt Collection Practices Act to HOA corporations (and their agents)

Would anyone knowingly buy a home if he knew:

•    That the HOA board would incur debts without his approval – using the owner’s home as collateral?
•    That a trade organization would have total control of the owner’s home, his use of enjoyment of it, and even his ability to sell it
•    That he would need approval for every detail of his home maintenance and improvement
•    That HOAs frequently target for race, religion, and politics by selectively targeting other violations – like a blade of grass between the sidewalk joints, or a garbage can allegedly in view
•    That your assessment payments will be diverted to pay the HOA management company and HOA attorney whatever they demand instead of your assessments?
•    That the board could collect reimbursement of attorney’s fees and other costs incurred by the HOA against homeowners – even when the homeowner wins the case?
•    That the board had been granted all powers and the homeowners have no recourse but litigation – and the statutes that the homeowners are forced to rely upon have been, and continue to be, written by CAI for the benefit of the CAI attorneys and management companies?

Would anyone knowingly buy property burdened by a corporation that offers nothing but a perpetual obligation to pay money demanded by the corporation? The CAI is a parasitic trade organization that exists on the backs of homeowners and whose primary interest is to benefit vendors, e.g. management companies, attorneys, and HOA corporation service-providers. In CAI trade publications, advertisements invite vendors to “Get More $!” – and that “more” comes from homeowners. The CAI created the “structure” of the HOA industry to serve the CAI itself, NOT the homeowners.

The CAI frequently claims, at legislative sessions, that it represents homeowners, yet hires lobbyists to aggressively oppose legislation that would protect owners and their property rights.  The CAI even solicits contributions from HOA corporations (a “Buck a Door”) to finance its massive lobbying efforts to defeat pro-property rights and homeowner-friendly legislation. Homeowners are unknowingly forced to donate to lobbying efforts to defeat legislation that they desperately need.  Not surprisingly, CAI regularly lobbies against open meetings, open records, or open elections for HOA corporations.

First Colony is having a small taste of this disenfranchisement problem right now. A “survey” (done by a FCCA’s board member’s company – Mrs. Walter) was used to sell, manipulate and force the 11 million-dollar idea of ripping out five pools and one park, to install a parking lot and splash pad. A homeowners’ petition has been started that seeks to re-establish what homeowners perceive as their right to control the association they are members of. http://www.ipetitions.com/petition/firstcolonysaveourpoolsandparks

Despite over 1,000 signatures so far, and more coming in everyday, the board is plowing ahead with its vendors’ and board members’ corporate self-interests. The board’s action plan against homeowners opposed to the board’s wasteful project is to marginalize this informed and growing population as, “a small minority of people spreading misinformation and myths.” The FCCA actually fabricated and printed a list of myths, presumably because the homeowners had been too responsible and no myths actually existed before FCCA created the list. At additional homeowner expense, the FCCA has even hired a CAI public relations person to spin information and do damage control; instead of doing what the homeowners are insisting, and indeed what is in the best interests of the homeowners in this community.

The First Colony subdivision, like owners in other HOA-burdened subdivisions is a collection of trapped homeowners who have no choice, but to pay any financial liability that the HOA-corporation burdening their properties desires to push on them. This is true even when it means destroying owners’ property values and use and enjoyment of the property.

Developers and builders set up these HOA serfdoms, and the homeowner’s choice is limited to choosing between HOAs, as there are now so few homes not in HOAs. This is true, despite many homebuyers who desire to live outside HOAs in “unburdened properties,” and therefore inside constitutionally protected communities. The amenities, status, and imagined homeownership of living in an HOA are illusions created for a corporate-controlled system of private government with a private security force that works, in intriguingly “Blackwaterish” ways, directly for the private government. This is clearly not the “American Zone” that many expect in their home ownership.

This strange takeover of homeownership evolved slowly. In 1987, the Inwood North v. Harris, Texas Supreme Court decision gave HOAs the right to foreclose on single-family detached homes. In 1995, CAI attorney Michael Gainer wrote Property Code 204, which was passed with no publicity, in an 11th hour voice vote in the Legislature.  It opened up the reapportionment of assessments loophole that has since resulted in many strong-arm extortion tactics and foreclosure filings.

Because the economy is in a contraction phase, the HOA – forced spending model, has been growing rapidly and even expanding into use by city governments.  Cities are pushing HOAs to assume more of the city’s responsibilities, because it is very difficult for the city to raise taxes, whereas the HOAs can raise assessments indefinitely. In this way, elected city officials, who are often intricately connected to the HOA industry, can look fiscally conservative to the voters, while passing increasing expenses onto privatized HOA governments; Corporate governments that are not required to have open records, open meetings, or fair elections. For this reason, when angry homeowners speak out, and are given violation notices, they need to be aware of what is occurring. HOAs can foreclose for a torn basketball net, on a basketball goal that never existed, especially if the homeowner is NOT loud and visible about the abuse. When HOA vendors retaliate via the HOA corporation, it is no time for homeowners to be silent.  As we have seen in Sugar Land, cities that benefit from HOA spending will not step forward and protect homeowners.

When an HOA can foreclose on a man’s castle for a basketball net that never existed, or for “reapportioning assessments” by HOAs to pay contested fines and fees, which continue to allow foreclosure for trite claims (property Code 209 in 2003), then real property ownership ceases to exist, and homeowners are only under the illusion that they “own” property.

When homeowners sell their homes they often discover, like my neighbor did, that they are forced to pay fines for landscaping that was not approved, even if these projects were done a decade before the current owner ever owned the property. My neighbor paid a $2,000 fine, at his closing table – where he was made aware of the issue for the first time. He also paid transfer fees totaling $750 and other HOA fees just to get out of one HOA and into another.  Selling a home is an HOA vendor’s last opportunity to shakedown a seller before he moves. Most people will not object to this shakedown and stop the closing, because to do so might cost them more than a few extra thousand that the HOA is demanding.  In this way, these are clearly extortion practices.

Even after the developer and builders have turned over their class B voting rights and are no longer involved with the HOA corporation, their vendors and attorney are usually solidly in place. The Meadowcreek community in Fort Bend has struggled for years to get out from under the grip of its law firm, Holloway Jones. In the past, this law firm has “farmed” these homeowner-indentured servants unmercifully. With enormous effort, and years of difficult work, this community was able to fire this CAI legal vendor. Even so, the attorney left threatening to charge the Meadowcreek community tens of thousands of dollars for firing him.

HOA attorneys are a specialized group of attorneys who are trained by the CAI to know how to turn a $50.00 contested fine into a foreclosure process that can yield the attorney upwards of 20 thousand dollars in attorney fees. The reapportionment of assessments and many other tricks, are never made known to homeowners. In this way, homeowners can be led, one at a time, into “executive sessions,” and the foreclosure process, without alerting other homeowners. Isolated in this way, most homeowners are astonished that this process is legal. If the victim of this abuse speaks out, which is quite rare, due to carefully constructed marginalization techniques, others with an air of protective denial will simply say, “There must be more to their story than that!” Unfortunately, the real story about HOAs is much worse.

So how is this possible?  How did the HOA industry turn “servitude” into “membership” and “controlled by” into “belong to” and “corporate interests” into “community associations?” Think back to when you bought your home from the builder and developer.  HOAs prey on people’s natural suspicions of their neighbors as having hidden agendas to paint their home purple or jack up cars in the front yard. Homeowners are sold these fears in exchange for their freedom. This is not a new idea, is it? Depending on the income and social status of the community, these fears are manipulated to fit the buyer. CC&Rs are sold as tools to keep “others” in line, so that they don’t bring down “your” property values (implied personal status), However, CC&Rs are more often selectively used to target and “farm” people for income to the HOA corporation and its vendors, as well as for racial, religious, and political discrimination and manipulation. In addition, let’s face it, there is always the real probability that at least one board member is simply a bully.

Homeowners inadvertently allow this, because neighbors are kept in a constant state of isolated suspicion about each other. When one neighbor feels targeted, he often innocently points to five other homeowners who have the same violation. The HOA’s vendors, or employees, are paid to go after everyone, and are indeed happy to do so. In this way, targeted and confused neighbors, inadvertently support the HOA’s abusive structure by pointing out their neighbors instead of objecting to the structure of the problem. It is also true that one racist bully in your neighborhood will become a powerful favorite of any HOA management company and attorney. He will often even find his way onto the board.

HOAs also commonly target widows who tend to pay off their homes when a spouse dies. Tax records reveal equity and a skilled HOA attorney can tap into this information.  Some of these cases make it to the news, like Wenonah Blevins, Houston, and Captain Mike Clauer, Frisco, but most do not. When people are targeted by an HOA (remember that they are led to think that their HOA is their neighbors), they usually are either shamed into silence or they desire to move away from such disgusting neighbors. Either way, the HOA‘s secrecy remains intact!

Source: http://www.fortbendnow.com/2010/08/04/47120