HOA not turning over financials and other issues

Started by VanessaD2 • 5 replies • 843 views

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VanessaD2 (Texas)
Posts: 2

Posted:

Hello,

Perhaps someone can lead me in the right direction of how to proceed. We have a place in Texas and it got destroyed in Hurricane Harvey. Our COA has since come out and stated that no insurance on common elements/property and now making owners pay for repairs. According to bylaws it was stated that an insurance was required and a reserve fund would be created. They have neither. So owners started questioning where money is going and we have gotten no response in any financial records. We have sent a certified letter and no response. Now they are saying the only way we can go to their home and view the books is if we pay our dues. We have been paying since we lived there. So question is can a COA legally hide financials, no audit ever, or force us to pay extra dues to see the books? Also, I was under the impression on Property code 209.004 they need a management certificate filed with county and there is none on file, is this a legal COA? The declarant period has ended in 2014 and he won't turn over board either. How can we go about getting new board? Any input is appreciated, as I am to the point in hiring an attorney but its the expense of an attorney for us that will be difficult. Also, the president of board has had a 1.2 million judgement against him in the past for tax fraud we have found out, can he be allowed to serve on board? I am reading it as no according to property code 209.00591, but please if I am wrong let me know.

Thanks!

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It is best if you hire an attorney to do it as a group and not singular. You can all share the expense and thus benefit from the results. HOA's work better as a majority. Your HOA is only funded by the owners for the owners. However, is your COA still owned by the Developer? Then that can be a whole other bag of issues that may need an attorney.

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By VanessaD2 on 05/25/2018 1:42 PM
Hello,

Perhaps someone can lead me in the right direction of how to proceed. We have a place in Texas and it got destroyed in Hurricane Harvey. Our COA has since come out and stated that no insurance on common elements/property and now making owners pay for repairs. According to bylaws it was stated that an insurance was required and a reserve fund would be created. They have neither. So owners started questioning where money is going and we have gotten no response in any financial records. We have sent a certified letter and no response. Now they are saying the only way we can go to their home and view the books is if we pay our dues. We have been paying since we lived there. So question is can a COA legally hide financials, no audit ever, or force us to pay extra dues to see the books? Also, I was under the impression on Property code 209.004 they need a management certificate filed with county and there is none on file, is this a legal COA? The declarant period has ended in 2014 and he won't turn over board either. How can we go about getting new board? Any input is appreciated, as I am to the point in hiring an attorney but its the expense of an attorney for us that will be difficult. Also, the president of board has had a 1.2 million judgement against him in the past for tax fraud we have found out, can he be allowed to serve on board? I am reading it as no according to property code 209.00591, but please if I am wrong let me know.

Thanks!

Is the president a homeowner like yourself, or connected to the developer or builder?

BenA2 (Texas)
Posts: 1,273

Posted:

If you are a Condominium Owner Association (COA), Chapter 209 does not apply to you. It only applies to non-condo HOAs. COAs are covered under Chapter 81 if your declaration was filed before 1994, or Chapter 82 if your declaration was filed in 1994 or later, or if it was filed before 1994 with certain conditions. You have to read the applicability section of each chapter to be sure.

You are entitled under both condo association statutes to view records, including financial records, whether or not you have paid your dues.

While Chapter 209 does state someone convicted of a felony is ineligible to serve on an HOA board, the same does not seem to be true for a COA under Chapters 81 & 82. At least not that I could find. Even if it did apply, it would only be for criminal convictions. $1.2 million judgement implies it was a civil case.

https://statutes.capitol.texas.gov/Docs/PR/htm/PR.81.htm#81
https://statutes.capitol.texas.gov/Docs/PR/htm/PR.82.htm#82

COAs are required to file a management certificate but failing to do so does not mean your association is not legal. The only purpose of the management certificate is to have a record of contact information on file for buyers and title companies.

Your governing documents may have a manner for getting rid of board members but likely the best way is to vote them out.

VanessaD2 (Texas)
Posts: 2

Posted:

Yes, the president of coa is an owner of a unit, and bought the land, the units were already on it as he began to sell them out individually. In his bylaws he refers to sec 209 so I assumed that sec. was for us and just recently he began to say the bylaws do not matter and are basically useless, and changed it to a COA. That was reason I was reading all of property code 209 not the 82, but I will read the 82 and get to know that one as well.

Thank you for all your replies, I am just so lost in this whole mess I am in.

BenA2 (Texas)
Posts: 1,273

Posted:

Quote:

Posted By VanessaD2 on 05/26/2018 12:42 PM
Yes, the president of coa is an owner of a unit, and bought the land, the units were already on it as he began to sell them out individually. In his bylaws he refers to sec 209 so I assumed that sec. was for us and just recently he began to say the bylaws do not matter and are basically useless, and changed it to a COA. That was reason I was reading all of property code 209 not the 82, but I will read the 82 and get to know that one as well.

Thank you for all your replies, I am just so lost in this whole mess I am in.

It can get tricky because you can call an organization a condominium association even if it does not meet the definitions in Chapters 81 & 82, and they both have slightly different definitions. The key is that if it meets the definition of a COA, regardless of what you call it, you fall under Chapters 81 & 82, not 209.

Adding to the confusion, in Texas, a single family home can be a condo and an apartment-like structure is not necessarily a condo.

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