NameW1 (Texas)
Posts: 32
Posts: 32
Posted:
Hello Texas HOA's SUCK. I have been pondering what would make them better. So here are some proposed laws with an explanation of how they will make Texas HOA's suck LESS. Help me improve these proposals! What laws would really work? I will take these to my state lawmakers if/when they are good enough.
1) The primary problem is there is no enforcement other than the local courts. So enforcing any trivial matter means a lawsuit. Lawsuits cost $50-$100k and you might win or lose. So a rogue board knows they probably won't get sued so they ignore the law and do whatever the hell they want. This proposed solution should lower the cost to a few thousand dollars or less for each side to get a ruling. The proposed solution is something like this:
Whenever a disagreement arises between a member and the association, the association shall offer to resolve it by mediation with the cost of mediator shared equally by both parties. Failing mediation, either party may demand to settle the disagreement by binding arbitration instead of litigation. Both parties should agree to a venue. If they agree to a venue they will follow the procedures of that venue. If they cannot agree to a venue, each party should appoint their advocate. The advocates will appoint an arbitrator within 15 days. The advocates will attempt to resolve the disagreement and the arbitrator will decide any differences between the advocates. The decision of the panel of advocates and arbitrator is binding and shall be entered as a judgement in the local county court.
2) In Texas you can easily get runaway boards. For example if the bylaws say that you have to have a quorum to have a vote- and if you don't get a quorum - then the sitting board gets to decide who fills vacancies on the board. I know a board that puts no effort into getting a quorum because they really don't want a vote. So the proposed solution is to force them to work to get a quorum. If the board has a reason to get a quorum, such as having to follow the annoying procedures below, they will put some work into notifying people and getting proxies signed at the first meeting:
If a quorum of members is not present at a meeting of members where the members are invited to vote on new board members, the board must attempt to re-convene a quorum 3 times within 45 days. Failing that, the board may propose a board member to replace any whose term expired - but the appointment must still be ratified by a quorum of members before they can begin serving.
3) Many real estate investors are obsessed with getting tips about people who might sell. Many people on boards engage in this as a form a dirty self dealing. The board has power to foreclose, and board members are easily able to get information about who is likely to be foreclosed on. So they go to these people and convince them to sell pre-foreclosure, or they tip off their friends. This should be illegal. Board members who do this should have to compensate the victims for giving them less than their properties would have won in a foreclosure auction. But it's not illegal!
Other than lawful actions taken by the board, individuals sharing or acting on confidential information about members accounts with their association is punishable by fines of $20,000 per instance and the victim can demand the perpetrator to pay for a study of how much the victim lost and the perpetrator has to pay the victim 3x their loss.
4) Texas property statutes 209 have some great reforms in them, but they don't apply to condos. Make Texas 209 apply to all condos. This paired with #1 above would greatly empower condo owners.
Texas property statutes 209 apply to all condo associations in Texas
6) Finally, most HOA rules are just ridiculous, and not enforced in a reasonable way.
Every association will appoint a rules appeal panel of 5 members. If a member disagrees with a rule for any reason, they can appeal it to the panel of members. If the member loses their appeal they can still use the mediation/arbitration route in #1 above.
1) The primary problem is there is no enforcement other than the local courts. So enforcing any trivial matter means a lawsuit. Lawsuits cost $50-$100k and you might win or lose. So a rogue board knows they probably won't get sued so they ignore the law and do whatever the hell they want. This proposed solution should lower the cost to a few thousand dollars or less for each side to get a ruling. The proposed solution is something like this:
Whenever a disagreement arises between a member and the association, the association shall offer to resolve it by mediation with the cost of mediator shared equally by both parties. Failing mediation, either party may demand to settle the disagreement by binding arbitration instead of litigation. Both parties should agree to a venue. If they agree to a venue they will follow the procedures of that venue. If they cannot agree to a venue, each party should appoint their advocate. The advocates will appoint an arbitrator within 15 days. The advocates will attempt to resolve the disagreement and the arbitrator will decide any differences between the advocates. The decision of the panel of advocates and arbitrator is binding and shall be entered as a judgement in the local county court.
2) In Texas you can easily get runaway boards. For example if the bylaws say that you have to have a quorum to have a vote- and if you don't get a quorum - then the sitting board gets to decide who fills vacancies on the board. I know a board that puts no effort into getting a quorum because they really don't want a vote. So the proposed solution is to force them to work to get a quorum. If the board has a reason to get a quorum, such as having to follow the annoying procedures below, they will put some work into notifying people and getting proxies signed at the first meeting:
If a quorum of members is not present at a meeting of members where the members are invited to vote on new board members, the board must attempt to re-convene a quorum 3 times within 45 days. Failing that, the board may propose a board member to replace any whose term expired - but the appointment must still be ratified by a quorum of members before they can begin serving.
3) Many real estate investors are obsessed with getting tips about people who might sell. Many people on boards engage in this as a form a dirty self dealing. The board has power to foreclose, and board members are easily able to get information about who is likely to be foreclosed on. So they go to these people and convince them to sell pre-foreclosure, or they tip off their friends. This should be illegal. Board members who do this should have to compensate the victims for giving them less than their properties would have won in a foreclosure auction. But it's not illegal!
Other than lawful actions taken by the board, individuals sharing or acting on confidential information about members accounts with their association is punishable by fines of $20,000 per instance and the victim can demand the perpetrator to pay for a study of how much the victim lost and the perpetrator has to pay the victim 3x their loss.
4) Texas property statutes 209 have some great reforms in them, but they don't apply to condos. Make Texas 209 apply to all condos. This paired with #1 above would greatly empower condo owners.
Texas property statutes 209 apply to all condo associations in Texas
6) Finally, most HOA rules are just ridiculous, and not enforced in a reasonable way.
Every association will appoint a rules appeal panel of 5 members. If a member disagrees with a rule for any reason, they can appeal it to the panel of members. If the member loses their appeal they can still use the mediation/arbitration route in #1 above.