How to Disband HOA in Texas

Started by RoyH1 • 9 replies • 4483 views

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RoyH1 (Texas)
Posts: 4

Posted:

I am a member of a small HOA, approximatley 23 lots. Individuals own 15 lots and the original developer owns 8. The developer's wife runs the HOA. The HOA has been in force since 2006. There are no common areas and the local county owns and maintains the roads. There are no lights or irrigation for the subdivision. Our HOA dues are approx. $475/year/lot owner. The only thing the HOA provides is seasonal mowing three to four times a year for the empty, un-owned lots (8), which runs about $120/lot/year.

The HOA is ran out of a different city that is 60 miles away. The HOA has NEVER had a BOD meeting, even after all the home/lot owners got together and demanded one to see why our dues were so expensive and what were they doing with our money... They have provided very vague expense statements when requested, usually with a large some of money in the "Misc" category.

We have visited with several lawyers, but none want to take the case because they say their isn't enough money invoved as a whole. So, we continue to pay $475/year and get nothing.

Do you all have any advice? I was told that a HOA has to have annual meetings. Our convenants say they will and must provide written notice 30 days in advance. We have never had one and I was wondering if the state of Texas could state that the HOA isn't actively involved and shut them down.

Thanks...

RoyH1 (Texas)
Posts: 4

Posted:

I should note that this subdivision is outside of any city limits and ETJ's. The lot sizes are 1 acre each.

BrianB (California)
Posts: 2,820

Posted:

without reading your bylaws, it can be hard to make any guesses, but has the HOA been turned over from the developer to the owners yet? It sounds like it hasn't. And sadly, if it hasn't been turned over, you are at the mercy of the developer until it is. I don't know texas law, however, so there might be remedy there, but typically, under developer ownership, there's not a lot an owner can do.

RoyH1 (Texas)
Posts: 4

Posted:

Unfortunately, the developer still has 100% control of th board. The way the Bulawayo are written, he maintains full ownership until he sells 100% of the lots or chooses to turn it over to the homeowners. I was one of the first to buy in the subdivision, and at the time, the developer was very nice and talked about a grandiose entry and also stated their was an HOA, but the dues woul be around $100/year to cover maintenance. I thought nothing about the covenants. Then the economy hit bottom and the lots didn't ll sale and we got a bill for $625 for HOA dues the first year. We dont even have an entrance to maintain, especially not a grandiose one. They have since lowered the dues to $475, but that is ridiculous. When we raised concern about it, they sent nasty letters to my wifes employer trying to get her fired. She oversees subdivisions in our county.

There has to be something legally we can do, since they never hold meetings and run it under his wife's maiden name as a management company.

BrianB (California)
Posts: 2,820

Posted:

I am sorry to say Roy, there may not be much. You signed a contract, and in general, HOA's are a matter of civil, contract law. Again, I don't know Texas, but most states don't spend much time and legislative efforts on HOA law. This is changing, but slowly.

Your only recourse may be to sue, and to do that, you need to find where the contract has been violated, and you have damages.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Roy - bet your "manager" is getting a hefty salary. . .

Is there ANY homeowner representation on the board?

Are you sure there is not a year time-line provision in the turnover? Requiring 100% sale is going to be rough.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Ask for the annual tax return for the HOA. If they dont have one, report them to the IRS. If they are just keeping the income without filing a tax return, they will be in for a surprise.

RoyH1 (Texas)
Posts: 4

Posted:

There is no members on the board. All 15 lot owners have met twice to discuss our situation, but most families don't want to enter into a legal fight due to financial reasons.

I will ask for HOA tax return and see what happens. I would think that if they havent had meetings, then they are not following through with their non-profit corporation requirements and maybe the state could shut down the management company, but then I would assume they would just start another one. The developer and his wife have over forty entities registered with the state of Texas. They obviously know what they are doing. It seems like a big scam at this point.

GlenL (Ohio)
Posts: 5,491

Posted:

Quote:

Posted By RoyH1 on 02/02/2011 10:58 AM
Unfortunately, the developer still has 100% control of th board. The way the Bulawayo are written, he maintains full ownership until he sells 100% of the lots or chooses to turn it over to the homeowners. I was one of the first to buy in the subdivision, and at the time, the developer was very nice and talked about a grandiose entry and also stated their was an HOA, but the dues would be around $100/year to cover maintenance. I thought nothing about the covenants. Then the economy hit bottom and the lots didn't ll sale and we got a bill for $625 for HOA dues the first year. We dont even have an entrance to maintain, especially not a grandiose one. They have since lowered the dues to $475, but that is ridiculous. When we raised concern about it, they sent nasty letters to my wifes employer trying to get her fired. She oversees subdivisions in our county.

There has to be something legally we can do, since they never hold meetings and run it under his wife's maiden name as a management company.

Why is it that no one will take the word of used car salesman and makes them put everything in writing but buy a home costing hundreds of thousands of dollars and they're willing to accept the word of the salesman????????

Studies show that 5 out of 4 people have problems with fractions

JanetB2 (Colorado)
Posts: 4,219

Posted:

First of all I would personally not have purchased in a subdivision where the documents made any statement of giving 100% control to a developer. That being said you may want to insure exactly what your documents state as supposedly in Texas you cannot assess fines and fees not contained in original or properly amended deed restrictions.

Here are the Texas State Statutes:
http://www.statutes.legis.state.tx.us/

You need to read the Non-Profit Corporation information and anything that would pertain to homeowner’s association. The problem I see with these statutes is some areas that describe amending or enforcing would depend on the size of City, County, etc. with regards to which sections apply. For example the following is for: A subdivision located in whole or in part within an unincorporated area of a county if the county has a population of less than 65,000.

Amendment and Enforcement in Certain Subdivisions:
http://www.statutes.legis.state.tx.us/Docs/PR/htm/PR.211.htm#211.001

Check the documents and statutes as to whether or not the developer is to also pay assessments. One item that sticks out in your statements is your HOA assessments supposedly pay for mowing the developer owned lots. This is not HOA owned property; therefore, it could be something the developer is responsible for paying out of his own pocket and not paid for with HOA funds.

Pick your County planning department official’s brains with regards to what is allowed or not allowed by a developer in an association until turnover to homeowners. They approved the subdivision and would know if there are any special fees that are being paid and charged to homeowners, etc.

No matter what a developer puts in the Covenants there may be areas where the State Statutes trump the CCR’s or By-Laws, so educate yourself and down the road if you need to speak with an attorney you know what they are referencing and can ask informed questions. Look for items in the statutes that make statements as noted in bold below:

Sec. 204.003. APPLICATION OF PROVISIONS OF RESTRICTIVE COVENANTS IN CERTAIN CIRCUMSTANCES.
(b) Notwithstanding Subsection (a), for a residential subdivision described by Subsection (c), the provisions of this chapter prevail over an express designation in a document described by Subsection (a) if:

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