Homeowners Associations Are Out of Control in Texas

Texas is one of the fastest growing states in the nation. All around the major cities there are new housing developments whose builders eventually finish their work and leave behind a covenant which property owners sign on to which usually includes membership in a Homeowners Association, which charges some sort of small membership fee for certain basic services which it provides. Residents can vote on the board of the association and it has the power to make and enforce the provisions of the covenant and any additional rules which it passes for its members.

These HOAs are essentially micro-governments with very broad powers and with little accountability to anyone outside of the dominant voting faction in their neighborhood. Residents who are out of step with their neighbors or who run into problems with the rules of their neighborhood have few recourses if the HOA board decides to single them out for persecution, and punishment usually comes in the form of fines which may eventually lead to a lien being placed against the property and even seizure of the property.

You may argue that this is a consensual relationship and that homeowners knew they were signing a covenant and joining a HOA when they bought their property, but few of these homeowners are aware of the trouble they may be getting into and the kind of small-scale dictators they may be dealing with in a HOA — people with too much time on their hands and whose lives revolve around how tall your grass is and whether you have the right kind of flowers planted along your driveway. Sometimes it is government on the smallest scale which is susceptible to the greatest corruption and abuse of power, and HOAs seem to be breeding grounds for cliques and oppression of non-conformists by a narrow-minded majority.

Two recent examples here in Texas have made it very clear that something needs to be done to rein in the petty abuse of power which is being exercised far too often by Homeowners Associations in the many new neighborhoods which have grown up around our major cities.

In ultraliberal Travis County Andrew Clements has become the target of persecution from the board of the Falcon Pointe subdivision because of his politically incorrect career choice. No, he's not skinning animals in the front yard or building his own nuclear reactor. He's running an Internet business where no customers come to his house and nothing he does is visible to his neighbors. Yet he has been threatened by his Homeowners Association and prohibited from earning a living as he chooses, despite the fact that there were no rules prohibiting home businesses in the neighborhood at the time he bought his home.

Clements' great transgression is that his business of choice — his method of earning a living in these lean times — is to sell firearms to hunters and law enforcement. It's a perfectly legal business. He has the right permits from the federal government. He has broken no state or federal laws and his business is protected by both the Second and Fourth Amendments to the Constitution. But none of that seems to protect him from the Falcon Point HOA which has passed a rule specifically prohibiting residents from buying and selling firearms in the neighborhood, a rule written specifically to target just one homehowner, Andrew Clements.

Clements' case is a classic example of a tyrannical majority persecuting a minority for actions which they find unacceptable, but which are by no definition criminal. Sadly it's not the only example of a HOA abusing its power and violating a resident's rights. Even more disturbing is the case of Captain Michael Clauer who returned from deployment in Iraq to find that his paid-off $300,000 home had been foreclosed on and sold at auction for $3500 by the company hired to manage his neighborhood by his Homeowners Association.

While Captain Clauer was in Iraq his wife Mae became depressed and didn't pay attention to responsibilities like opening mail and paying bills. She never saw notices from the HOA about outstanding fees or the lien on the property and ultimately the foreclosure which they lead to. Ultimately the $300,000 home, which was a gift from her parents, was foreclosed on and sold for barely a 100th of its value to cover $800 in fees and fines. This despite the protections of the Constitution, Texas law, and the Servicemembers Civil Relief Act which is supposed to protect the jobs and property of soldiers on deployment.

The Clauers' situation would be grossly unfair under the normal circumstances, which apply to hundreds of HOA foreclosures in the state every year, but it is doubly outrageous when the victim is a soldier who was fighting for his country during the proceedings.

Ironically, Texas is known for having one of the strongest Homestead laws in the country, as well as new laws making eminent domain seizures by government more difficult. But none of this blocks property foreclosure by a Homeowners Association under a 1987 court ruling which declared that no matter how small the amount owed and despite all protections under state and federal law, including the Constitution, HOA's may foreclose on property for outstanding fees.

The problem in both of these examples is that private contract law is viewed as paramount in most situations. In most ways this is a very good thing, but it does open the door to abuse when a citizen enters into an agreement which he cannot comply with for unforseen reasons as in the Clauer case or when the administration of the rules he signed onto is biased or the rules are changed as in the Clements case.

In other similar situations states have stepped in to regulate the behavior of groups exercising this sort of power or industry organizations have been formed to self-regulate and prevent abuse. In Texas the Texas Apartment Association is a good example of a similar industry where self-regulation has successfully curbed abuse and protected the rights of both tenants and landlords. Clearly something similar needs to happen to limit the power of Homeowners Associations.

I abhor excessive government regulation, but Homeowners Associations need to play by the same rules as everyone else and be held accountable for their actions. They should respect the rights of their residents and not engage in unfair and abusive practices. They certainly shouldn't pass rules to selectively punish unpopular but entirely legal activity or seize valuable property over small amounts in outstanding fees. The rights of citizens to own property and to do whatever they want in the privacy of their own home are more important than any rights held by a contractual association. That is why they are recognized and guaranteed in the Bill of Rights. Home buyers cannot give up or sign away those Constitutional rights when they buy a house.

This situation is out of control and it threatens too many of our citizens who may have sunk their life savings into a home and cannot afford to lose it and may not be able to sell it in a weak market. If Homeowners Associations do not act to self-regulate on a state or even nationwide basis, then the government may have an obligation to step in and set some rules and impose limits on the powers of HOAs. This is a civil rights issue as serious as any we have seen in the last two generations and something must be done to protect property owners from HOA abuse and unreasonable foreclosure.

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