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The following is an excerpt from a Houston based website dealing with HOA abuses. They make the claim the the management companies and the attorneys associated with them have allot to gain by encouraging conflicts with homeowners. It is interesting to note that the first recorded occurrences of conflict in Shavano Ridge (as documented in the Board minutes and Out on the Ridge) were initiated not by the Board of Directors, but by our current management company. There is a great deal of similarity between this description of problems in Houston and some of the goings on right here in Shavano Ridge.

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Texas Law Makes It Impractical for Home Owners to Defend Themselves Against Unjustified Legal Attack, Thus Creating a Situation Where Homeowner's Associations Can Become Petty Tyrants 

I want to begin by saying, homeowners associations perform a useful service and, when they remain true to their purpose, are justified in filing lawsuits.

Encourages Lawsuits

Most, if not all, homeowners associations sue people and threaten to sue people. It's their stock and trade -- their job. Many have scouts who drive through the community looking for deed restriction infringements. All of these are potential lawsuits.  Some invite people to alert them to these potential lawsuits and even have special anonymous phone lines to collect such leads.  Naturally, with the aid of lawyers they can, and do, find plenty of people and reasons to sue or threaten to sue. All of these associations and their lawyers know the rightness of their position isn't the reason they almost always prevail--it's the economic threat of the lawsuit that is their winning weapon--faced with the economic threat such a one sided lawsuit presents, the homeowner surrenders.

The the State Property Code sows the seeds for, even invites, abuse. They have made it possible for homeowners associations to become unaccountable tyrants who can abuse homeowners essentially at will with no effective checks or balances. The deck is stacked against the homeowner and the stakes are too high to resist.

Already One Sided

This law already required homeowners to pay the association's legal fees when an association wins, while the association doesn't pay the homeowner's legal costs if it loses.

Even before the latest change the association didn't have to pay your legal expenses if it launched an econo-legal attack against you that was proven in court to be unjustified.  But if the association won, you had to pay all their costs of bringing and litigating the suit.  With the latest change they don't even have to win in court.  They don't have to justify the attack.  Now, the homeowner has to pay all their mobilizing costs even if he surrenders without a fight.

Because the Association and the Association's lawyers hope/expect to get the homeowner to pay, they are both motivated to look the other way if the lawyers cross charge other association work to the suit.  The lawyers may even decide to pad their charges since their employer doesn't have to pay.  The expectation that the homeowner will have to pay leads to a lackadaisical/permissive attitude toward threatening or actually bringing a lawsuit.  The homeowner must pay whatever costs they claim or face the threat of having to pay the association lawyers yet more in order to question their charges.

Threat Too Great to Resist

Imagine how likely a homeowner is to try to resist even a very unfair attack with the deck stacked like this.

I use the term "econo-legal" attack because, for the average person, these lawsuits are economic attacks, plain and simple. Such lawsuits typically drag on for years with association lawyers pulsing your lawyer for this or that exercise throughout the years. The legal point at issue rarely has nearly as much effect on the homeowner's life as the cost of litigation in dollars, personal time and emotional stress.

Think about the contrast when a tax financed institution turns it's resources on individual.  It's a David and Goliath encounter.  And, if that weren't one-sided enough, the Legislature has given the giant some Scud missiles.  Simply stated, it's extortion--it's the "offer you dare not refuse."

The people launching these econo-legal attacks, the association directors, have little or nothing at risk themselves.  They don't have to pay anything--even if the attack is proven unjustified and they lose in court. They pay the costs with homeowners' money.  So, they can mount spite lawsuits against members of the community they get crossways with.  Perhaps someone who ran against them for the seat on the association they hold -- the victor getting even with the vanquished.  Say a homeowner protests wasteful or unfair practices of the directors of the association.  They can get mad and fix the protester's wagon, either to get even or to send a signal to others not to challenge them, or both.

No Accountability

The Texas Legislature has said the directors don't even have to be right.  There's no accountability.  If they bring the force of cadres of lawyers down on a hapless homeowner, he faces more than just the economic threat of defending himself.  In addition to his own expenses, he realizes he may have to pay all the legal expenses the association's lawyers claim they have spent to bring the attack.  And, he must pay whatever they claim, or face the threat of having to pay them yet more in order to question it.

Unscrupulous homeowners associations directors can unleash costly legal attacks on whoever they choose and force the people they attack to pay the costs of initiating these attacks without having to show anyone the attacks were justified.

It would be scary enough if the government were doing this, but these associations aren't even the government.  They are corporations formed by and, initially, run by and for, land developers.

An Extra Word About Institutional Lawyers' Fees

If you are unfortunate enough to have to defend yourself against an institution, you are likely to seek and bargain for the least expensive arrangement you can make for your defense.  But, you have NO control over the institution's waste or extravagance.  Institutions are notorious for hiring expensive lawyers.  They can afford them -- the money isn't coming out of their pocket.  Also, if they lose lawsuits they may also lose the next election.  Hence, they want the best lawyers other people's money can buy.  So, if attacked, you are likely to be forced to pay for a team of high priced lawyers to attack you -- lawyers you can't afford to hire for your own defense.

False Hope

The 1998 Texas Senate charged the Committee on State Affairs to look into the abuses of these associations under the current law and recommend remedies.  The Committee held hearings and published a report titled Legal Powers, Duties and Structure of Homeowner' Associations in Texas.  Though the Committee acknowledged the abuses, the changes suggested by the Committee were largely cosmetic.

These associations are valuable tools for land developers and, are a source of income for lawyers--both powerful groups.  Thus, they exert influence (lobby) to retain and even increase association powers.  I understand the change quoted at the beginning of this article was drafted by a group of lawyers who live on fees from these associations.  It therefore seems likely the Committee sidestepped the problems and real change because of pressures from these self-interest groups.  Whatever the reasons, their changes didn't address the real problem, which is threatening homeowners with the associations substantial legal costs if they do not comply immediately with association demands.  

The Committee accurately observed that these homeowners' groups, while treated as private, nonprofit corporations under the law, have become "de facto political subdivisions" with powers to compel membership, and to collect fees comparable to taxes.  Sen. Ken Armbrister, of Victoria, who chaired the interim committee, said "they [are] just a racket in some locations."

In the end the Committee didn't have the will to propose meaningful changes to correct the real dangers and, protect homeowners from the harm the Committee's own hearings revealed is visited on residents when irresponsible individuals get control of these quasi-governmental bodies.  Instead they proposed largely cosmetic changes to create the appearance of acting to correct the problems they uncovered.

Texans Unite

I urge you to write your Texas Legislators and demand they re-balance the economic threat between the individual and the association by making associations responsible for their own legal costs or offering the homeowner binding arbitration paid for by the association.  Also, send a copy of your letter to this senator who wants to see the situation corrected.

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