HOA REFORMERS SAY WEST'S BILL STILL NEEDS TWEAKING
The latest iteration of what has become a perennial effort to reform homeowners’ associations (HOAs) has hit a bit of a speed bump – the would-be reformers themselves... “If it passes the way it is, it’s not good for us,” said Janet Ahmad of the Texas HOA Reform Coalition. “It legitimizes a private government. We don’t need another government in our lives. It’s a funded mandate.” See March 23, 2011 hearing on SB142 Part II

HOA REFORMERS SAY WEST'S BILL STILL NEEDS TWEAKING
West has said bill may be best possible in this political environment

The latest iteration of what has become a perennial effort to reform homeowners’ associations (HOAs) has hit a bit of a speed bump – the would-be reformers themselves.

             

A key stakeholder group is withholding support for CSSB 142 in hopes that an amended version now in the works will be more to their liking. The omnibus bill by Sen. Royce West (D-Dallas) addresses most of their issues but, in their view, does not go far enough.

“If it passes the way it is, it’s not good for us,” said Janet Ahmad of the Texas HOA Reform Coalition. “It legitimizes a private government. We don’t need another government in our lives. It’s a funded mandate.”

HOAs are semi-autonomous entities that charge dues to pay for facilities and maintenance and various fees to enforce deed and covenant restrictions and rules designed to preserve the integrity of subdivisions. Some HOAs are alleged to be dominated by overreaching developers and builders and overzealous property owners whose boards cede authority to management companies and delegate fee and fine collection to attorneys on a contingency basis. 

The reformers accuse them of improperly profiting by pyramiding fees and using their unique power of foreclosure to pressure homeowners into payment with little or no due process. HOA and builder representatives counter that  HOAs reduce infrastructure costs for cities and counties and protect property values. They say that most HOAs are well run, claiming that abuses seldom occur in HOAs where developers and builders are involved.  

Senate Intergovernmental Relations, which West chairs, kicked out his substitute Wednesday. He termed it the best bill possible in the current political climate. 

Among other things, SB 142 would do away with non-judicial foreclosure; diminish the foreclosure threat by prioritizing payments owed such that dues are paid off first; require HOAs to offer payment plans; make records available on request; provide notice of meetings; void provisions that disqualify homeowners from voting or running for HOA boards; and lower the requisite majority to amend HOA constitutions. 

“This will be the session we pass HOA reform,” West vowed at the hearing. He urged the parties not to publicly support it and then work behind closed doors to kill it. 

Coalition members fear that they are not getting adequate protection, however, and that the bill’s language appears to give something and then takes it away. They said they had a “wonderful” meeting Friday with members of West’s staff, who went over their concerns about the 39-page bill line by line.

Among them are two exceptions to the proposed priority of payments schedule. One would be invoked if a homeowner wrote instructions for applying a payment, which the reformers contend could be as innocuous as the memo line on a check. The other would nullify the priorities if a homeowner were in arrears on a payment plan. 

The coalition also wants to remove an exception that void notice requirements for foreclosures or temporary legal actions. 

Bill Davis, a litigant who lives in the La Ventana subdivision in Driftwood, said Thursday evening that he’s been fielding numerous calls from residents of various HOAs who are displeased with the bill. HOA and builder reps indicated Wednesday that they’re not entirely happy with the current product either, but they can live with it. 

“We all have bruises,” testified Susan Wright of the Texas Association of Builders. “That’s probably a sign of a bill that’s fair.” 

Nevertheless, coalition members said Friday that they have been told to expect a fight when the bill gets to the Senate floor, possibly next week. 

By Patrick Graves