Delinquent TX COA Refuses to Resign or Call a Meeting

Started by JonahB1 • 12 replies • 302 views

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JonahB1 (Texas)
Posts: 3

Posted:

Hi everyone,

I purchased and moved into a condominium unit a little over two years ago in Houston, Texas. The property has a little over 300 units. Our three member HOA board has been delinquent in their duties, have not called a meeting in over two years as required by the bylaws, have not been conducting annual financial audits or statements and are non responsive to owner requests or questions. Two of the three owners cannot even be reached as they do not live on site.

A group of property owners including myself have gathered together to meet the 40% quorum threshold but the board refuses to hold a meeting to allow us to elect new board members.

The Texas HOA statute lies out procedures to conduct an independent election certified by the county clerk in cases like this (Texas Property Code Sec. 209.014. - Mandatory Election Required After Failure to Call Regular Meeting) https://codes.findlaw.com/tx/property-code/prop-sect-209-014.html

Unfortunately (and remarkably) this statute does not apply to Condominium HOAs as they have a completely separate act/statute that has no such provisions to overthrow a delinquent board (Sec. 82.001. Uniform Condominium Act) https://statutes.capitol.texas.gov/Docs/PR/htm/PR.82.htm

Has anyone experienced this dilemma with their Texas Condominium HOA and been successful in taking alternative legal action on overthrowing a delinquent board?

Many thanks in advance!

AugustinD
Posts: 1,027

Posted:

JonahB1, this forum has at least a few Texans who have met with some success in compelling their Condominium Association (COA) boards to abide by TPC 81 or TPC 82 (as the case may be) and the COAs' respective Declarations and Bylaws.

What year was your COA established? I want to confirm which Texas COA statute sections apply. As you may be aware, TPC 82 mostly applies to COAs established in 1994 and later.

Whatever you do, tread softly. This forum sees a lot of reports of retaliatory action by COAs/HOAs. So far your board sounds like just the sort of board that would retaliate, against owners who complain, and make the owners' lives miserable. As a matter of reality, such boards simply have a lot more resources, vis-a-vis the typical COA owner, that they can use to get away with this.

JonahB1 (Texas)
Posts: 3

Posted:

The condo was built in 1984. So I guess that means we are governed by 81 which is even more vague.

AugustinD
Posts: 1,027

Posted:

The following bolded sections et cetera of TPC 82 apply to all condos (meaning pre-1994 condos and condos established in 1994 and later):

(c) This section [from TPC 82.002] and the following sections apply to a condominium in this state for which the declaration was recorded before January 1, 1994: Sections 82.005, 82.006, 82.007, 82.053, 82.054, 82.102(a)(1)-(7), (a)(12)-(21), (f), and (g), 82.108, 82.111, 82.113, 82.114, 82.116, 82.118, 82.157, and 82.161. The definitions prescribed by Section 82.003 apply to a condominium in this state for which the declaration was recorded before January 1, 1994, to the extent the definitions do not conflict with the declaration. The sections listed in this subsection apply only with respect to events and circumstances occurring on or after January 1, 1994, and do not invalidate existing provisions of the declaration, bylaws, or plats or plans of a condominium for which the declaration was recorded before January 1, 1994.

(c-1) Section 82.121 applies to a condominium for which the declaration was recorded before January 1, 1994.

(quoting from TPC 82.002)

82.108 Meetings
82.114 Records (implicating 82.1141 as well)
82.161 [how owners can get action through justice court; attorney's fees]

Also parts of Texas's nonprofit corporation act may be relevant.

I suggest your group write a letter to the board like the following:

Dear Board of Directors,

The Bylaws and state law require an annual election. Please schedule an election consistent with the timeline set by the bylaws and state law; invite candidates to run; send the legally required notice for this election; and have the election, with the President (and not the Board) presiding.

If you do not intend to run an election pursuant to these terms, please let us know within ten days.

Sincerely,

names
addresses
email addies
phone numbers

Send the letter registered mail, return receipt requested to the COA's registered agent, as given at the Texas Secretary of State site and on the management certificate on file with the county.

This letter is called a "demand letter" (polite version).

If the board either does not respond, or refuses to run the election, report back.

What you are doing is setting up the board for a court order. The court asks you to ask politely, then escalate the request. Then, as your group is interested, lawyering up to have an attorney indicate the seriousness of the board's (in)action and failure to comply with the Bylaws and state law.

After sending the letter, start identifying individuals willing to serve on the board.

Unless your bylaws prohibit those COA owners who live off the COA grounds from serving on the board, such off-site residency is not relevant.

KerryL1 (California)
Posts: 14,550

Posted:

Is it possible for the Owners themselves to call an election meeting since elections are meetings of Owners?

Where is the property manager in all of this? Have owner complained to that person and that person's management company if there is one?

Since there is a good-sized group that wants to get your COA back on track, if Augustin's letter, which is a good idea, doesn't produce, y'all might chip I our funds to hire a qualified HOA attorney and meet with them for advice about how to proceed.

Meanwhile, let's hope our fine Texas posters chime in.

BillH10 (Texas)
Posts: 1,217

Posted:

Augustin said it all as far as I'm concerned, and I agree with Kerry as well.

Is the property managed by a professional management company? What are they doing about this?

JonahB1 (Texas)
Posts: 3

Posted:

Unfortunately about three years ago the board ended the contract with a large management company and hired an independent person who works solely for our property but is extremely incompetent and is also missing in action just like the board. We surmise that their must be some shady business practices between this “property manager” and the board as they do not keep records nor respond to our requests. Keep in mind this is no small condominium. There are 308 units and they are operating an annual budget of over $1,000,00 but refuse to have any transparency or communicate with the owners who they are supposed to serve.

KerryL1 (California)
Posts: 14,550

Posted:

This sounds really serious. I think you need to gather some resources and hire a good COA attorney to advise your group What steps to take. It'w hard to know what j kind of trouble this board is getting your corporation into. Time to ct.

LaskaS (Texas)
Posts: 1,025

Posted:

wow, bill, I cant believe there have been no meetings. Who is taking in the assessments and paying the bills for the association?

LaskaS (Texas)
Posts: 1,025

Posted:

oops, I meant, Wow Johah

LaskaS (Texas)
Posts: 1,025

Posted:

oops, I meant, Wow Johah

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jonah

I suggest you band together other concerned owners, hire an attorney, and send a demand letter to the association

KerryL1 (California)
Posts: 14,550

Posted:

Nice when you agree with me, JohnC!

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