Texas should stop homeowner association abuse

Houston Chronicle Tuesday, May 08, 2001


The nightmare come to life for Wenonah Blevins, the 82-year-old widow who recently lost her home over an $814.50 bill that she tried to pay, is just the tip of the iceberg. In Harris County over the past five years, court records confirm more than 4,400 foreclosure cases filed by homeowner associations.

The Texas Legislature now has the opportunity to stop this manifestly excessive use of foreclosures. Simultaneously, the Legislature can end the oppressively one-sided laws that force homeowners to pay large attorney fees charged by association lawyers, but deny any attorney fees for homeowners even when homeowners win in court. In most disputes between homeowners and associations, the actual amounts at issue are small, a few hundred dollars or less. However, attorney fees in the court cases rapidly mount to thousands of dollars.

The issues of foreclosures and attorney fees are directly linked. Too many homeowner associations employ attorneys who file foreclosure cases because they know the homeowner cannot afford to bet the house, even when the homeowner has a strong defense. To stop the case, the homeowner must pay the legal fees of the association's lawyer.

That is lawsuit abuse, happening right here in Harris County.

One homeowner, a postal worker, paid her annual assessments but failed to keep a net on her son's old basketball hoop and lost a picket in her fence. Even though she fixed those problems, the association's lawyer sent a bill. Two lawsuits later, she was forced to withdraw many thousands of dollars from her retirement account to pay the lawyers fees or lose her house.

Another homeowner paid her annual assessments, but the homeowner association sued to close her home day care. Substantial law supported her position, but she lost. To save her house, she had to declare bankruptcy when the association's lawyer charged her $19,000 in attorney fees.

In another case, eight homeowners were sued because the association wanted to stop them from protesting against the association. For their defense, the homeowners' legal bills totaled tens of thousands of dollars. Besides seeking to silence the protest, the association made a libel claim (later dropped) for $100,000, plus legal fees.

We're also seeing a new form of abuse. During lawsuits, before the court has made any decision, the association includes attorney fee charges in monthly bills to the homeowner being sued.

On the other hand, many homeowner associations in Harris County (and elsewhere) never, or almost never, file foreclosure cases. They find some other way to solve whatever disputes arise in their communities.

The Legislature is considering several bills, including Houston Sen. Jon Lindsay's proposals to stop foreclosures, and proposals by Houston area Reps. Kevin Bailey, Harold Dutton and Fred Bosse. All improve on Sen. John Carona's much weaker approach, but none alone solve the problem. We need to put the pieces together.

First, take away the homeowner associations' right to foreclose. Businesses, doctors, lawyers and others collect their bills without the right to foreclose, no matter how meritorious or deserving their claim. Associations should not be entitled to special treatment.

Second, reduce lawsuits by requiring, before suing, that members of the association board meet with their neighbor. People talented enough to be on the board of an association are talented enough to resolve most community disputes.

Third, before attorney fees can be charged, require mediation so the homeowner can be heard by someone neutral, outside the association. If the problem is worthy of a lawsuit, surely it's worth mediation first.

Fourth, allow homeowner associations to recover attorney fees only if a court finds the homeowner had no reasonable basis for whatever is challenged, and only fees that are reasonable in amount. Assure balance by allowing homeowners to recover attorney fees if the association had no reasonable basis to sue the homeowner.

Fifth, if litigation truly is needed, homeowner associations can use the same process as other creditors, including small claims court where homeowners do not need attorneys to present a defense. That's much more efficient and cost-effective for everyone.

Homeowner associations that abuse foreclosures are taking on the worst attributes of big-brother government. They should get out of the business of suing their members and making them homeless. We need balance, so that attorney fees serve justice, not harassment. The Legislature must act now to secure our constitutionally protected homesteads.

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