Maintenance Fee Records TEXAS

Years ago we always had monthly and yearly statements at meetings to show income and outgo of funds.
Now this Board does not give us detail. We had a very misleading statement at our annual meeting. We pretty well know Board members are wiping out (not paying) fees owed by purchasing property for themselves and giving credits, which there is no document that allows this. They say we are not allowed to see property owners payments, so we cannot prove it. They say there is a privacy law. Any suggestions?

I should have told you, all the above has been attempted. We spent $30,000 on two different lawyers. There was nothing in it for the lawyers, and they just gave us excuses. So done with that.
They don't give you what you ask for even though the state says they have to. No legal government source will help POA's unless you can prove wrong doing. They will redact names on deposit slips. Several of us have been on the Board, we no longer want to be (they now have a few that do nothing and the two corrupt ones rule). Why would a tax record help? Again, no one can make them do anything, even do minutes or audits, on and on.

So, the state can write the rules, and we have Deed Restrictions, and the By-Laws, but they do what they want. This is a very poor run down sub-division and very little interest, but just a few of us.

So, I was hoping there might be someone else out there that has run into this miserable situation and did something we have not tried. The Attorney General or local DA won't help, nothing. Of course we know of all the above things to do, we have done them!!

It seems to me, after years of trying, they have won.

Texas does not have an ombudsman.

Is this a self-managed HOA or do you have a management company?

Did the issue ever go to court?

When involving attorneys in these issues, you (unfortunately) need to know almost as much as the attorney. This is done by research, reading and understanding applicable statutes and your governing documents. One also needs to be prepared to go the distance (i.e. the courts).

Sometimes, a simple letter from an attorney will have a Board do what is required of them. Sometimes, it won't.

Knowing your rights and the Association requirements under the law, once the issue gets in front of a judge, it's likely the court will rule based on those laws. Where a statute is open for interpretation, it's more likely that the court will rule for the Association (not always but don't hold your breath).

This is why you need to know almost as much as the attorney. To see if the issue is worth pursuing through the courts.


It's unfortunate when a Board refuses to comply with applicable statutes.

Keep in mind, not complying with Statutes or governing documents has different consequences for the Board members then not complying with a court order.


Well, we do live in a Nation where one is considered innocent unless proven otherwise.

This is why documentation (use of certified mail, e-mails and other written communications)


Darn privacy laws.


Well, to be blunt, that is part of the problem - no longer wanting to be on the Board.

I've been on my Board for 6 years. Honestly, I don't want to continue serving either. However, with the only other people who are stepping forward having been on the Board when I had my issue, I continue to serve (for the sole purpose of preventing a similar situation you are in).

Therefore, I understand the desire to no longer serve. However, you see what you have if you don't serve.

The "corrupt ones rule" because others allow it by not serving or by not speaking up when they are serving.
Decisions are made by majority vote. Therefore, 2 individuals on a 5 person board can not rule unless at least one other doesn't object.

Granted, if the situation is reversed, and the two individuals are there to try and keep the corrupt from making the decisions, it's difficult and frustrating. However, even in that situation you need to stay because you can point out where something is against statutes. You will be in a position to know the whole story so the word can get out (if needed). You may even win a few decisions. It won't happen overnight. However, if one is willing to stick it out, it can happen.


You said that they were purchasing properties. Hence, tax/property records would be helpful to show any purchases.

Additionally, property tax records can provide the mailing addresses of non-resident members so proxies, if allowed, could be obtained. At the very least, mailings to non-resident members will make them aware of the issues.


That is one of the truest statements made on this forum.

Nobody can make another comply with the statutes. They can only impose consequences for failing to comply with the statutes. To be honest, unless the statutes are criminal, the consequences are minimal.

Therefore, the only real thing that can be done is to remove those individuals from the positions they are in and replace them with those individuals who will comply with statutes.


Membership apathy allows this to happen.

Apathy in the form of not showing up to vote and not willing (or no longer wanting) to serve will only allow those who are willing (be they good or bad) to make the decisions that will impact you and the other members of the Association.

The good news is that a few can make the difference. It won't happen overnight (heck, as was pointed out, it took me three years), but it can happen if the few are willing to do the work. Keeping in mind that removing a few individuals or the entire Board is only the beginning. I thought I knew the issues of our Association. Once I was elected to the Board, the real education began.


Not knowing what you have and have not tried, I can't say. However, I can tell you what I did.

I chose to change things internally. I believed that the best way to do this was to make the membership aware of the issues (as those who make informed decisions normally make the right decisions). To this end I attended every Board meeting then wrote a newsletter letting the members know what was going on. This was expensive for the printing and time consuming but what I chose to do. I only reported the facts. Gave thanks were it was warranted and never attacked an individual, as decisions were made by the Board. Where said decisions were in violation of law or governing documents, I cited those laws and documents and provided sources so those facts could be independently verified.

During election time, I knocked on doors, explained the issues and gathered proxies. It still took three years before changes occurred (and it should be noted that I wasn't elected to the Board until the fourth year).

I volunteered to serve in various positions and various tasks. This helped demonstrate that I wanted to be part of the solution not simply a voice making complaints.

Slowly, things changed. During that time, I was even able to gather enough support to make an amendment to the Bylaws (even though I couldn't get changes on the Board). Slowly, things changed.

Keep in mind that, sometimes those who are willing to do the work, may not be the best one's to explain the issues. During those three years I was given many labels by the Board. Some members may even still use those labels when discussing me or my actions. Those are some of the consequences when one chooses to take a stand and make changes.


As you have found out, there is no Federal or State agency that oversees Associations. OK there are some States, like VA and FL, that have ombudsman offices. However, that office has little authority over the Association because they are not part of the judicial branch.

Keep in mind that there are criminal laws and civil laws. The State (Attorney General, DA, etc.) enforce criminal laws. Civil laws are enforced by the individuals involved and that is done among themselves or through the courts. Since contracts, hoa/coa laws and corporate laws are considered civil laws, there is typically limited governmental authorities to "oversee" or enforce those laws.

Sure the State corporation commission may fine for not filing the annual report on time. The IRS will certainly go after the Association for failing to file taxes. The District Attorney will prosecute if criminal laws are broken (example embezzlement). However if the Association doesn't comply with the Bylaws or a civil law, it's up to the membership to hold the Board accountable. The easiest way would be to recall the board or not reelect those same individuals. The more expensive option is to go through the court system.

This is why it's imperative that the members remain active in the development and actually take an interest in how the Association is governed. If apathy sets in (and, unfortunately it does), it becomes that much more difficult to change things when issues are discovered.

How can members be involved? First and foremost, attend the annual meetings and cast ballots. Members should also attend board meetings from time to time to see how the board is running things. If time permits, volunteer for committees, special projects or to sit on the Board and become part of the decision process.

Heck, in my Association of 130 lots, we had 17 lots attend the last annual meeting (and 5 of those were the board). I don't understand why the majority (over 80%) would allow 17 to make decisions that will affect their life and property.

Sometimes, simply pointing that fact out can stir others to at least attend the annual meeting.


Well, did they win or did the few give up too soon?

I understand being tired of the fight.
I even understand retreating to gather a stronger force.
However, if you give up fighting completely, they will have won.

Personally, I had an issue with my Association in my first year of ownership. I took the attitude of "you leave me alone, I'll leave you alone," which worked for several years. Then when a new issue arose (almost 15 years later) I took the actions I explained above.

Unfortunately, I allowed myself to have the earlier attitude. It was unfortunate because issues that could have been fixed easily earlier on, had grown into taking a lot more time, energy and expense to resolve. Things like not having a reserve study done until 2010 (our first one) even though statutes require one every 5 years (and our Association is over 30 years old). This kept our Reserves so low, the Board was looking at special assessments. Because there was no record keeping policy, we now have incomplete records (as many years of minutes were lost or discarded).

Fortunately, I did become involved and these things have, if not been corrected - they were stabilized. The Association is now on the right track but it hasn't been on this track for long. Therefore, I continue to serve even though I don't want to.

As has been pointed out, there are many on this site with similar stories.
Most, if not all, of the posters on this site have had issues with their associations and the easiest fix was to gather support and make the changes internally. Everyone is knowledgeable with their Associations. Hopefully what worked in that Association will work in yours.

Hope this helps,

Tim

KarenG7 (Texas)

1 - Director remuneration by fees waiver ?

Denying individual unit payment records, may be defensible privacy protection. If some sort of extra-legal Directoral remuneration - even theft - is occurring, maybe you - ? and auditors if any ? - would find no record of waiver amidst possibly voodoo financial recording anyway.

2 Remuneration by personal use purchases ?

Maybe everyone's honest in Arizona, but a Mesa Arizona woman's fight to expose (unauthorized) Directoral remuneration ( ? theft ? ) went viral in 2013.

A cellphone video shows her AGM questions being denounced by cronies ( the Wagon-Circling Effect ) and records her protests at being allegedly physically assaulted out of camera range by another crony even as she is speaking to the meeting. No accident that her hubby had been denied entrance.

Her Arizona group's focus had been on receipts of paid purchases that include diapers, booze & building materials half-way across the continent where is sited the President's New Jersey condo.

The video'd scene of toxic retaliation next triggered ABC's local affiliate to chase the President 60 Minutes style through a parking lot.

The dissenter recounts having to move out of the community. A judge is said to refuse to apply some form of an administratorship but orders access to withheld purchases & payments.

July 29/14 update : 3 former Board members resigned or were forced out with rearguard immunity agreements or waivers.

3 This makes some ( ? )sort of case for any Director remuneration - if at all - being totally upfront, time limited and with some sort of periodic HIGH threshold vote or by-law. Whistle-blowers or boat rockers better have very tough skin.

The video : June 5 2013 http://www.abc15.com/news/let-joe-know/mesa-hoa-out-of-control-homeowners-accuse-board-of-misspending-funds “Mesa HOA out of control? Homeowners accuse board of misspending funds”

Just wanted to comment here so I can find this later.

Thank you Sharon. I intend to offer more in this thread hopefully soon. I do believe Austin is a big culprit of what they write in law but I am surprised because you would think most of them probably live in communities with HOAs and would know how tough it is to control their rules. Things really ran totally out of control when they allowed the ones not paying their maintenance fees to be on the Board. I will get back here to update. But sure do like hearing what is going on in other places too.