Foreclosure due to fines loophole in TX property code? (Texas)
I've just returned from a "closed" board meeting. Recently my board
has removed all of the "general" meetings.. You know, the ones that
they are required to provide notice to the home owners of when & where
the meetings take place.
Currently, the only meeting I can attend is the board meeting. I'm
allowed in only due to my HOA's non-profit status. I am not allowed
to speak or ask questions during the meeting.
My HOA is preparing to signficantly up enforcement of the "minor" CC&R
- issues like leaving trash cans on the street. A 2nd violation
results in a $25/day fine for the home owners.
The board indicated that they knew they couldn't foreclose for
non-payment of fines. The management company (which really runs the
enforcement, lien, and forclosure show) let the board know that such
was true, but what they would do to get around that little prohibition
was apply any future assessment to the unpaid fine, leaving a portion
of the assessment unpaid. They would then proceed with forclosure in
regard to the "unpaid" assessment.
Q: Clearly this isn't ethical, but is it legal? Has this sort of
thing been sucessfully challenged in Texas? It looks to be quite a
large loophole to me.
Question: I've just returned from a "closed" board meeting. Recently my board
has removed all of the "general" meetings.. You know, the ones that
they are required to provide notice to the home owners of when & where
the meetings take place.
Answer: Both Virginia and California allow executive sessions during board
meetings which are closed to the membership, however these sessions can
only cover certain topics as specified by law.
In general these are, employment or contract issues, legal matters and
discussions with homeowners about violations.
Question: Currently, the only meeting I can attend is the board meeting. I'm
allowed in only due to my HOA's non-profit status. I am not allowed
to speak or ask questions during the meeting.
Answer: This is common. Typically there is a homeowner forum that occurs prior
to the meeting being convened for homeowners to bring topics to the
boards attention. However, homeowners as members typically can request
to be put on the agenda to address the board on a predetermined subject
if the request is made in advance of the meeting.
It is not uncommon for boards and management companies to be unaware of
how to run meetings.
Question: My HOA is preparing to signficantly up enforcement of the "minor" CC&R
- issues like leaving trash cans on the street. A 2nd violation
results in a $25/day fine for the home owners.
Answer: Virginia law caps fines at $10/day for 90 days.
I have been on boards that have received repeated complaints about trash
cans so I can understand why they would want to do this. It is a common
procedure.
Question: The board indicated that they knew they couldn't foreclose for
non-payment of fines. The management company (which really runs the
enforcement, lien, and forclosure show) let the board know that such
was true, but what they would do to get around that little prohibition
was apply any future assessment to the unpaid fine, leaving a portion
of the assessment unpaid. They would then proceed with forclosure in
regard to the "unpaid" assessment.
Clearly this isn't ethical, but is it legal? Has this sort of
thing been sucessfully challenged in Texas? It looks to be quite a
large loophole to me.
Answer: This is done quite frequently. Homeowners should clearly state that
money paid is to be put towards assessments. Then the board should not
be able to apply it to fines. However, the general advice that should be
given to anyone in that situation is to pay the fines first and then
challenge them. You may be held responsible for interest or late fees on
fines that were unpaid, even if the fines are later overturned.