Homeowners fight HOA foreclosures



Article Courtesy of WFAA-TV

Published February 9, 2005

Every year, thousands of Texans buy homes in neighborhoods where they are required to join a homeowners' association.

What many don't know is some of those associations are so powerful, they can seize a home without so much as a single hearing in court.

Unpaid taxes and mortgages usually land a house on the sheriff's auction block, but not one particular home in Carrollton. Attorney Ben Chapelle is selling a house that's being seized and sold by the homeowners' association of a development called The Country Place, because the home's owner owes $3,000 in dues and late fees.

Just like that, a $140,000 home sold for $10,000. The owner didn't even know until News 8 told him.

"There's no way," the owner said. "There's just no way someone could sell my house from underneath me ... there's just no way."

The owner, Bob, is a plumber. He was too embarrassed to reveal his entire name, his face or the outside of his house. He learned the hard way that in Texas all an association has to do to foreclose is file a lien and send proper notice.

Bob didn't understand the legal language of his contract.

"We thought they were gonna try to take our TV or our stereo ... maybe take some of my tools or something," he said.

He also didn't understand that documents thousands of Texans sign at closing allow homeowners' associations to take the house for unpaid dues.

"There's a whole stack of papers here," he said. "How am I supposed to know that any one is more dangerous than the other?"

Meg Rohrt's company Alternative Management handles management duties for home and condominium owner's associations. She said they need to have the right to foreclose, because they have serious responsibilities.

"The worst words in this business are 'but I thought'," said Rohrt. "You have utilities, insurance, landscaping, the pool, reserves to pay for painting, roof replacement ... everyone has to do their fair share."

Rohrt said she advises associations to work with people who fall behind on their dues. But, some complain the associations are inflexible.

In East Dallas, Quenton Chambers faces hundreds in disputed fines on his deceased mother's condominium.

Rebecca Lopez owed no mortgage on her White Rock Lake condo, but it was seized and sold while she was trying to make a partial payment on her maintenance fees.

Lopez recalled, "I had a three-year-old kid at the time crying to me, saying, 'Mommy, where is our house, why can't we move back into our house?'"

In Houston's suburbs, homeowners have been fighting their associations over these issues for nearly a decade. The courts have ruled the foreclosures are legal, but advocates argue they're unconstitutional.

"The Constitution has only five exceptions to the foreclosures: your mortgage money, your vendor's lien, that type of thing," said Harvella Jones of Stop Texas HOA Foreclosures, which she formed after she lost her home in 1999.

The Texas Legislature passed a law several years ago that may save Bob's home. It gives him 120 days to pay off the bills and get his home back.

"Somebody told me the other day that homeowners' associations have more power than God," Bob said. "I believe them now."

To curtail that power, the Homeowners Advocate Group has a new bill pending in the State Legislature to let buyers deny their homeowners' associations the right to foreclose. The group believes the battle to pass it is mainly uphill, however; similar bills in the past have met stiff opposition.