Article Courtesy of
7 On Your Side
Published November 20, 2006
Homeowners' associations enforce neighborhood rules, but are they abusing their power? 7 On Your Side investigated and found some HOAs with lots of authority, and a powerful ally at the State Capitol.
Ken and Malu Hamburger bought their dream home, a place to retire near Driftwood. But the Hamburgers and some of their neighbors say life at La Ventana Ranch has become miserable because of their homeowners' association.
"They started sending out crazy letters to people," Ken Hamburger said.
Violation letters for a trash can left in the driveway, or minor lawn maintenance. One yard notice was sent for a lot that is mostly rocks. Homeowner Bill Davis said the letters went too far.
"I didn't buy a time share at the whim of the management company," he said. "I bought a home."
While the notices were piling up, so were neighbors' questions about where their $49 a month dues were going.
"They were allowing the pools to decay. The roads were getting big cracks in them," claimed Ken Hamburger. "We were paying money, we wanted to know where that money was going."
Davis also claimed, "they refused to identify who the officers and directors were. They refused to provide any other information that they're obligated to provide under the Texas property code."
It took a year for homeowners to finally get complete financial statements.
"They stonewalled us for over a year," claimed Davis.
La Ventana now has a new homeowners' board. The board's new president acknowledges past problems, but said he wants to be more open with residents.
La Ventana is not the only neighborhood where complaints are surfacing. Across the state, a growing number of residents say their homeowners' associations have too much power and too little oversight.
"This is actually a very serious problem around the country," said Jim Harrington with the Texas Civil Rights Project.
Harrington has received numerous complaints of overzealous HOAs.
Sandra Denton represents the Community Associations Institute, a group that regularly lobbies on behalf of HOAs. Denton admitted there are problems, but insisted, such incidents are isolated.
"There are situations in which associations kind of go too far," she said . "They get a little extreme in the rules enforcement."
Denton added that homeowners agreed to the rules when they moved in.
"They made a decision to buy into this community, and as a result, they expect that those rules will be enforced," said Denton.
If you get slapped with a fine you disagree with, you can fight it. But if your HOA hires a lawyer, you have to pay him. Harrington believes that is unfair.
"Not only do they control every part of your life, but they also control all the remedy that you might have," he said.
Plus, if you do not pay your annual dues, homeowners' associations can even take your house and sell it. It is happening more and more. In Houston, the watchdog group
HOAData.org found HOA foreclosure filings quadrupled between 1990 and 2001.
Our investigation continues Tuesday night. Watchdog groups say a law designed to protect you has a major loophole. That law was written by a state senator with lots of connections to the HOA industry. Hear from the senator, and see his industry connections, Tuesday night on Fox 7 News Edge at 9.
Article Courtesy of
7 On Your Side
Published November 21, 2006
Homeowners' associations are coming under increasing scrutiny. But when it comes to more regulations, HOAs have a powerful ally at the state capitol. 7 On Your Side asks one state senator if he's writing loopholes in the law to benefit his own industry.
John Carona is a big fan of homeowners' associations.
"I think it's a great lifestyle and a great concept," he said.
Carona should be. He is CEO of Associa, a company that manages thousands of HOAs across the country. Carona is also a Texas state senator who's authored several bills regulating homeowners' associations. The senator insists there is no conflict of interest.
"My interest in that issue is no different than whether or not an insurance agent serving in this body votes on issues pertaining to the industry of insurance, or whether a pharmacist in this body votes on issues related to prescription drugs," he said.
The Texas Ethics Commission said lawmakers are generally allowed to propose legislation related to their industries.
But the senator's connections do not end there. Carona is also a member of Community Associations Institute. CAI frequently lobbies the legislature, often pushing bills that give HOAs more authority. Campaign finance reports also show, since 1998, Carona has received more than nine thousand dollars in contributions from CAI and its directors. Plus, witness statements show Associa employees have testified for HOA legislation, sometimes only identifying themselves as "private citizens." Carona says they were not testifying as representatives his company.
"They're coming as individual citizens," he insisted. "They're coming in the capacity of individual citizens with a point of view."
The Texas Civil Rights project admitted, Carona has not violated state ethics laws. However, they said his industry ties are a concern -- at a time when some homeowners' associations are criticized for extreme enforcement tactics.
"He ought not be voting on this stuff, or he ought to just be really clear where he's coming from," said Jim Harrington, the group's director.
Sen. Carona HAS written several laws protecting homeowners, including the Property Owners' Protection Act. But that law has a big loophole.
The law says, if your HOA gives you a fine and you do not pay it, they can not sell your house. They can ONLY foreclose if you are behind on DUES. But some HOAs are getting around the law by RE-ASSIGNING payments. Basically, you pay your dues, but instead, the association applies that money to fines. That way, the fine is paid whether you agree with it or not, and the HOA can still threaten to sell your home.
Since the law took effect, at least 17 homeowners' associations managed by Associa have filed documents allowing them to do this.
"The law looks really good. 'Well this is terrific. We're protecting homeowners,'" said Harrington. "But what it doesn't say is, we're leaving the door open so you can come by and do a document like this an essentially take away what you think you have under the law."
Republican Sen. Jeff Wentworth tried, unsuccessfully, to close the loophole last year.
"We thought we'd fixed this problem in 2003, and these techniques that are being used since we passed that law, are designed to get around the spirit of the law we passed," Wentworth said.
Carona said associations need the power to foreclose, and insisted his companies do not profit off his legislation.
"Critics will say a lot of things, but in reality, when homeowners' associations collect fines, for example, those fines are typically going to the financial benefit of the homeowners' association, not the management company," he said.
Driftwood homeowner Bill Davis, who's battled one of the senator's HOAs for two years, is not convinced.
"I would hope that the legislature would consider taking a serious look at some of the activities that Mr. Carona has been involved in," said Davis.
In January, state lawmakers will consider an overhaul of homeowners' association laws. Sen. Carona says he will oppose any effort to ban HOAs from re-applying your payments.