UPDATED 4/21/09:
Thanks to Cole Spainhour for providing more information this raw data from Harris County on HOA Foreclosures. Over 10% of the foreclosures in Harris County were on homes valued at $100,000 or less!
So what happens when your HOA tells you to move your "non luxury" truck out of the driveway and into the garage - but you refuse?
Foreclosure.
That's right - The same thing that's happening right now to folks who can't pay their mortgage.
The HOA could literally take your house from you - and there's little you can do about it.
Sounds ridiculous, right? Until I looked into the problem today in response to a client's question. My client had received a letter from a HOA lawyer, demanding payment of HOA dues to the tune of $3,000 or the HOA would foreclose. My initial reaction was to tell the HOA to 'jump into the lake' - but before I did so, I actually cracked open the law books to see what is out there.
The Texas Supreme Court held several years ago that HOA's can foreclose upon private property for non payment or non adherance to HOA covenants - normally the 'fine print' in your deed restrictions contained in or with your deed to your home. Inwood N. Homeowners’ Ass’n, Inc. v. Harris, 736 S.W.2d 632 ( 1987). These HOA covenants form a contractual lien upon your home, which trump your Texas Homestead. This was somewhat expanded by the Texas Attorney General who, in opinion, stated: "A property owner may encumber real property with a covenant running with the land, which, depending on the particular instruments and circumstances involved, may be enforced by foreclosure without violating subsequent purchasers’ constitutional and statutory homestead rights." AG Opinon here.
In plain english, the HOA wins and you don't.
Naturally, the HOA's power has now gone to its logical extreme: The Dallas Morning News recently reported that HOAs are foreclosing for non-payment of dues and for parking a F-150 in the driveway - as the vehicle "was not a luxury vehicle." DMN story here.
Luckily, your political heros in Austin are on the move to restore balance to the force. Rep. Burt Solomons has championed the cause, seeking amendment of the Texas Constitution to forbid this practice. And predictably, he's getting resistance from... the HOAs.
Which boils down to the fundamental question: If your neighbor won't move his junky '84 Caprice off the blocks in the front yard, and the HOA has threatened and threatened, what right should you as the neighbor (and assumably a member of the HOA) have against the redneck next door?
Me thinks a deal is a deal - which is surprisingly different than my normal political leaning. Normally, I'm all for private property and screw "the man." Here, the man is the HOA; but the problem comes into enforceability - what else can the HOA do to make someone live by the words they agreed to?
Neighbors have to play by the rules, or live somewhere else. That's what you signed up for when you moved in - that's what the fine print states in your Deed, etc. If you don't like it, don't sign the deed. I'm not crazy about HOA's having the power to kick people out of their homes for ticky-tack reasons, but at the same time, a deal is a deal.
When a homeowner signs on the bottom line, the homeowner agrees to all the parts of the documents - not just the ones which benefit him.
Is that picture of Cole's house? Isn't Cole really just a tool for the man?
ReplyDeleteAll my private property and screws,the man. Here,the man is a framework agreement,but the problem into an executable What the Framework Agreement can do to make people live,they agree?
ReplyDeleteHOA Legal Opinion