Texas – The biggest state in the Union has a dirty little secret.  Your local homeowner association can foreclose on your homestead for less than $300.00 and will do it if it wants to.  Advocates across the state have tried to awaken homeowners for years to the realty of homeowner association foreclosures to no avail.  When we first started educating our legislators about this dirty little secret, we were hopeful that something would be done about it.  Legislators back then in the early 90’s appeared to be willing to work on our behalf.  Here we are in 2006 and we are no closer to the elimination of homeowner association foreclosures than we were in the early 90’s—or are we? 

Just how did HOA’s, POA’s, civic associations, whatever you want to call them, get to take your house when no other debt collector can do that?  What it boils down to is when law firms start pursuing you to collect maintenance fees, they become a debt collector like any other entity trying to collect a debt.  But then something different happens.  ##M:{read more}## Instead of having to wait in line behind other creditors and set up reasonable payment plans, they get to cut in front of other creditors and execute their “contractual lien” already running with your land.  When I say execute, I am not referring to processing the lien and collecting through regular channels; I am talking about the unconstitutional ability to foreclose on your homestead in this state in order to collect.  It also goes by the name extortion. 

Now many, many homeowners think their homesteads are protected under Article 16, Section 50 of the Texas Constitution.  Wrong!  Our homesteads are not protected under the Texas Constitution and here is why.  In 1987, there was a decision made by the Texas Supreme Court against several delinquent homeowners that lived in an HOA by the name of Inwood North Homeowners’ Association.  (Inwood North Homeowners’ Assn. v. Harris 736 S.W.2d 632 (Tex. 1987).  The defendant homeowners never showed up in court (it was a default judgment) but the Texas Supreme Court decided after being petitioned by such attorneys as Marc Markel, Rick Butler, et al that it would grant the homeowner association the right to foreclose on the defendant’s homestead because they did not want to interfere with the contract that had been created between the homeowner and the homeowner association. 

The one big problem with that concept is there was no contract created between the homeowner and the homeowner association.  The developers, having access to the land first, decide when they are creating mandatory associations or master-planned communities to place a lien, called a “contractual lien” on the property that runs with the land and thus predates the buyer’s homesteading his or her property at closing.  In other words, by the time we get to the closing table to sign a document stating we designate our property as protected homestead property, we have already lost our ability to protect our property from foreclosure by a homeowner association because the developer has created these “contractual liens” and placed them on the very ground our house sits on.  Trying to supersede these liens is like trying to say you predate God and created yourself. 

There is no other reason why homeowner associations can foreclose in Texas.  There is no property code that gives homeowner association this right.  The Texas Constitution does not give this right.  The legislation does not give this right.  This right was not voted in by homeowners.  It is solely because of the case law Inwood vs. Harris.   A case in which three judges made the decision to accept a lopsided, one-sided contract as gospel, causing millions of taxpayers and homeowners to lose their right to protect their homestead from homeowner association foreclosures.   Two dissenting judges—Mauzy and Gonzales—were opposed and tried to protect the Constitution.

Some homeowners think it is an awesome idea to have the ability to micro-manage their neighbors.  Many of these homeowners also volunteer to be on the board so they will have the power to oversee the fees that are collected and make decisions on our homes.  When you try to remove the flagrant, abusive board member or members, it is usually not successful.  When you go to your board for books and records, financial records, any kind of information pertaining to your membership in the association, you are oftentimes met with hostility, evasive tactics, non responsive action and abuse which makes it necessary to file a lawsuit to demand action on your request.

Every session since the early 90’s, an advocate or advocates have gone to Austin, Texas, to testify on behalf of bills that would have introduced various oversight for homeowner associations.   The biggest reason why advocates have been unsuccessful in getting good bills passed for homeowners in this state is because of the lobbying of the Community Association Institute (CAI) attorneys.  They are the attorneys who stand to lose the most when we are successful in forever stopping the homeowner association foreclosures.  They created the foreclosure cottage industry and will do anything to make sure it remains alive and well.   During session, a few of their favorite concepts is “do you want a purple house in your community” or “you must keep property values up or you won’t be able to sell your house”.  The technique is what is called “brainwashing”.

You are probably asking yourself what can we do to stop this practice of placing “contractual liens” on the land before we close and save our property?  One of the most important thing we can do is to stop being apathetic.  If we want to not return to slave-master community actuality, we must start going to our board meetings in greater number and becoming aware of what our boards are doing before it becomes critical.  We must stop giving board members on foot, knocking on our doors, our proxies to vote any way they want.  There is an annual meeting generally every year in the communities that have associations and when we do not get notice of the meeting, we must be diligent in finding out why and when there is a meeting and then actually go to the meeting and vote against corrupt board members and punitive amendments. 

We must then start writing, emailing, calling, visiting, faxing and generally communicating with our legislators to let them know we are not pleased with what is going on with our property and constitutional rights.  We must send articles like this to our neighbors, our family members, our business associates, anyone who owns or intends to buy property in this state or any state with master-planned communities and homeowner association activity.  Violation of our property and constitutional rights have spread because we have failed to take action.  We have sat back and allowed others to do our work for us and the workers are few and far between.

Boycotting CAI owned management companies, CAI vendors used in your community and any CAI attorney that is advising your board should not be used.     Homeowners must stop putting food on the table of its predator—the Community Association Institute (CAI) community.   If we stop feeding them, they will perish.  If we remove the foreclosure hammer tool from their toolbox, they will slither away from your community.

Several years ago, in 2001, a lady by the name of Winona Blevins had the misfortune of losing her homestead for nonpayment of maintenance fees.  She was in her early 80’s.  While Mrs. Blevins got her homestead back, all new furniture donated by Mattress Mac and more than $200,000 in settlement, her dilemma did not save the rest of the homeowners in the state of Texas.  While some legislators probably hope we think that is true, it is not.  If you do not pay your maintenance fees to your local homeowner association, you may be foreclosed or for the most part, extorted for exorbitant attorney fees.  This will also happen if you fail to maintain your lawn in a manner the board dictates, remove weeds, paint your exterior in the approved color, or any architectural control deed restriction.  While foreclosing because of deed restrictions other than nonpayment of maintenance fees is slowly becoming a tool for homeowner associations, it is nonetheless happening.  The practice of asking you to do something in a letter you eventually pay for and then when you do not comply, the board will send someone out to perform the “service”, bill you and if not paid, add it to your maintenance fees in order to eventually foreclose if not paid.

One thing I have always noticed through the years is public outcry still works because everyone depends on other people to be successful.  When we really want to stop something, all we have to do is gather as a group and protest.  To destroy the head of this extortion operation, we must destroy the body and stop feeding it.  Now that we know about it, know how we arrived at this stage, we must start communicating with our legislators, our neighbors and generally become an advocate ourselves.  These CAI predators have fed on us long enough.  This is as important as picking the president and in some cases, maybe even more, because what happens in our community, immediately affects us.  It controls our day to day living in a way different from anything else.  The President of the United States has checks and balances.  The President of your local homeowner association does not.  Do not wait until you become the latest victim.  You should be as interested in what your homeowner association is doing as you are in what Brad Pitts and Angelina Jolie are doing.

harvellajones@yahoo.com  The Texas Homestead Hoax© 2004