Re: • Homeowner Alleges that Texas Senator John Corona is involved in a homeowner association foreclosure scam - Maintenance dues homeowners pay to his management company will be used for fines so he can foreclose on homes - July 16, 2007 - By Amy McCorkle - Rockwall, Texas

Amy:

Fox 7 News in Austin did a story on Senator Carona's management company practices November 20 and 21, 2006.

In Austin, he engages in the same game via Alliance Association Management - another Associa company. Although everyone references Texas Property Code 209, no one seems to be publicizing the fact that Sen Carona WAS THE AUTHOR of that bill. Please note that Senator Carona authored the bill you refer to.

He is intimately familiar with the bill and it was "gamed" from day one to protect the practices of his management companies. He convinces HOA Boards to adopt these resolutions (which primarily benefit the management company).

Although the Patton Boggs attorney seems to suggest that it was the HOA Board that was responsible for this policy, all one needs to do is look at the county clerk's office wherever Sen Carona's Associa companies operate.

You will just as (Fox 7 News did) a significant number of HOAs that Carona's companies manage have coincidentally adopted the same resolution!

I doubt that Sen Carona really wants to get pulled into a discovery battle. You would certainly be entitled to discovery and you could demand copies of the "fining resolutions" adopted by every Texas HOA that his Associa companies manage.

The defense to this practice is the Fair Debt Collection Practices Act which at present has not been found to apply to HOAs in Texas. The FDCPA protects homeowners from this scam in many other states.

Folks should know that CAI actually has Public Policies promoting elimination of the application of the FDCPA to HOAs.

Community Associations Institute (CAI) does not advertise this racket which amounts to little more than extortion. Instead they try to eliminate the homeowner's defense to this extortive racket.>

If the HOA assigns its "right to collect" to Carona's organization, then all his agents have to decide is how much to take from each homeowner. As it stands now, they can threaten homeowners with accusations of violations with impunity. No court, no judicial determination. The accused has no recourse. His management contracts also usually require the HOA members to indemnify his management companies. Yet another liability saddled on the homeowners against their will. Guess who pays the tab if the homeowner sues the management company to defend against these collection efforts.

You may also find that his management agreement requires payment to the management company of a percentage (10%) of any insurance claim payment exceeding $1,000,000. This fee is in addition to all other compensation fees. This fee is in addition to any deductibles the HOA pays. Since when did insurance pay 111% of the amount required to repair or replace? Either the HOA or the insurance company is likely to get the short end of this stick. Oh yeah, the HOA is paying its insurance premiums to Association Policyholders - another Sen Carona company. Guess it's the members getting the short end of the stick again.

As of the date of this comment, Sen Carona's Associa has updated standard templates for the "community websites" for HOAs his companies manage. Outrageously, the websites all proclaim that these HOA meetings are "open to the public" and that "all members can participate in various committees". This is probably in direct response to demands from homeowners for legislation to mandate open meetings and open records in Texas HOAs. These statements on his website are simply not true and are apparently designed to mislead prospective purchasers.

Aside from highlighting Senator Carona's self-serving legislation and his business practices of preying upon homeowners in these HOAs, there must be a push to impose liabilities on these management companies.

In addition to any other actions, homeowners must seek a determination that the FDCPA applies in HOA contexts and that the HOA and its agents have a fiduciary obligation to the members.

Texas Homeowner
Austin area, Texas
Posted Nov 20 2007 6:29PM PST