Dear Candy:

I know you’re not a huge fan of HOAs so I think I know what your answer will be to this question, but can you post this question on your blog?
I live in a medium size condo complex.  It’s pretty well managed.  I recently learned that our Board gave our property manager (who does not  office on the property and is here infrequently) a 25k bonus.   They also are generous with bonuses to the 2 maintenance guys including buying a truck for one of them.  Is this typical? A 25k bonus seems really outrageous to me?  I don’t think there was any mention of this in any of the board meeting minutes. It seems like they were keeping this fairly quiet.   One of our CPA residents noticed it on the balance sheet.  Shouldn’t the residents be able to vote on something like this?  Thanks!

Wowsers. Something’s rotten in Denmark, don’t you think?

Folks, please. Texas is one of thirty-ish states that allow for judicial foreclosures by HOAs, though the rules and redemption periods differ. (The redemption period is the amount of time that a homeowner has to pay up all the dues and fees after the HOA has officially taken title to the home, some states are more generous than others — in Texas you have 180 days, in Florida just 10. And we wonder why there are so many foreclosed homes in Florida.)

But the more I read and write about this, as much as I hate Gestapo-like HOAs, I think it’s probably not a bad law and not enforcing dues could result in sick HOAs, which bring down the property values of the entire complexes.

David Rejebian, please pick yourself up off the floor.

Here’s why: if an HOA has serious delinquency problems, they cannot maintain the property as it should be maintained, and new buyers may have trouble getting mortgages when appraisers hand out lower values. If HOA’s fall behind on their bills, they may have to create special assessments which further burdens the other homeowners.

Should they be a bit more reasonable? Maybe. Certainly glad we have 180 redemption days in Texas. But I guess there will always be a point where you have to draw a line in the sand and say, that’s it. At the very least, perhaps we should make a better effort to educate people when they buy a property within a homeowner’s association. Unfortunately, they don’t all read DallasDirt.

Thoughts?

You remember Capt. (and Mrs.) Clauer who owned their Frisco home free and clear, it was a gift from his family,  and his wife sort of went into a funk and didn’t open the mail and missed two payments to the HOA?  The HOA went ahead and foreclosed on the home. Turns out this is the same aggressive HOA (update: management company) that forced some folks to (BLASPHEME!) chop down their bluebonnets a few months ago. Well, it seems this HOA has now hired publicist and media consultant David Margulies, who used to work for Channel 8 as a news reporter, to spruce up their image. And Margulies says  the dues were in arrears BEFORE Capt. Clauer shipped out.

I don’t know what to tell you. Senator John Carona doesn’t think we need to change this law because if you don’t pay your share of the HOA dues you impose a burden on others in the development. And you are notified at closing of your obligations. Should we make an exception because this gentleman is fighting for his country?  Should all soldiers and military personnel be the exception, or how about excepting doctors who are taking a 21% hit in Medicare reimbursement as well?  How about nurses? Anyone affected by the oil spill… ladies with blue hair… real estate reporters whose names start with C…

Question: are the home association dues now paying Margulies’ salary?

The HOA foreclosed on the Clauer home because their monthly home association dues of $800 were late. Oh but it gets better:  the company that manages the HOA then proceeded to sell the house without notifying them.

Unabashedly pulling from the story on HousingWatch because I am too angry to write:

“Even more shockingly, Select Management, which oversees the Heritage Lakes housing development, sold the Clauers’ home to a bidder for just $3,500. That purchaser, in turn, flipped it to another owner. And here’s the clincher: The Clauers owned their $300,000 home free and clear.“

This happened because as we all know, in Texas when you don’t pay your home association dues, the HOA has a legal right to foreclose on your property.

Apparently the couple is still living in the home while trying to figure out what happened to the sales proceeds. May Clauer, Michael’s wife, says she fell into a deep depression while he was overseas and she was home caring for their two children. She stopped opening the mail. (I can relate to that one!) She stopped paying the bills. Wonder who made the mortgage payment?

Stay tuned for more on this one, including what some of our illustrious legislators think about it.

“We’re not going to be bringing in a lot of kids out into the neighborhood, and getting them all riled up and setting them loose on one another,” he said. “That is not appropriate.”

But what I want to know is: did someone take away all the kid’s keys?

I am squelching a huge urge here to say I told you so — CCR’s are great for historical districts and as much as they help keep the standards of a neighborhood high, I’m on board. But when they are interpreted and abused to implement the whims of ego-centric Napoleans, they hurt property values and the community, in my humble opinion.

But now agents are worried that if Toll Brothers swoops in and saves the day buying up Bagwell’s foreclosed properties, are we going to end up with (pardon the pun) cookie cutter, “looks like everyone else’” Mc Mansions?

Here’s a link to Bagwell’s Tarrant County foreclosure documents provided by a kind DallasDirt reader.

I think I’d rather have an ordinary, plain vanilla McMansion that I had the freedom to dress up rather than have Gestapo man monitoring the color stain on my eaves and what type of grass I’m planting.

Agree or no?

Baring no bones here: I hate most homeowner associations and think they are breeding grounds for psychologically disturbed, obsessive-compulsive cripples with huge Napoleonic complexes (if male, you know what that means!) who have a lot of money, time and flaunt better toys than most of us. Please note that under Texas law, Mr. Bagwell’s HOA has the right to foreclose on homeowners who fail to pay their HOA dues. That said, this article is fascinating because people actually bought into these developments and knew what they were getting into — or at least they should have received a copy of the HOA rules prior to closing.

So my question is: why did they buy?

Here’s the deal: it’s a buyer’s market, folks. You don’t have to play in the sandbox with these types if you don’t want to — plenty of other fish in the sea.

And appraisers tell me strict HOA rules and strife negatively affect property values — agree or disagree?

Because of my perverse fascination with everything real estate, I’ve sent out some emails to friends who live in Colleyville for further dirt. If you live there, do tell.

“Dear Candy: For the past 4 years I’ve tried to get a washer/ dryer installed in my condo.   The rules and regs state that permission must be granted from the 1st floor owner. The 1st floor owner gave me permission on the condition her renters were ok with it.  The renters were adamant that they will NOT allow entry into the unit for any reason and have said “this issue is closed.”  The renters do NOT live in the condo nor have they EVER lived in the condo.  Eight years ago they moved from their Preston Hollow home into a condo on Turtle Creek and use this condo for storage ONLY.   From my perspective, these renters are renting this unit against our rules and regs which states the condos can only be used for “residential purposes”. Nobody is residing in this condo.
The Board and management company have continually “tabled” this issue but recently I have put pressure on them to help me get a washer dryer.  I have requested that they look at and revise the washer dryer policy — which was last updated in 1995. The Board has lied to me on several occasions. Most recently  they told me that they had a “special board meeting” and voted against changing the washer dryer policy.  When I pressed them for a copy of the minutes, they changed their story and said they didn’t vote on it but the HOA attorney recommended that the policy not be changed.  They also said that they can’t prove that the renters don’t live there at least periodically.  However, everyone on the Board knows these people don’t live here.  How can  a renter be allowed to prevent an owner from updating their home and investment?
The condos I live in are on Royal Ln between the tollway and Preston (right by the fire station).  This condo complex attracts seniors for some reason  – because of this the first floor units definitely sell a lot better than the 2nd floor units.  2nd floor units are hard enough to sell here but without a washer dryer it’s just that much harder.  Seniors want the 1st floor units and younger people want the 2nd floor units but no younger person wants to live without a washer/dryer!   It’s 2010 — who wants to live in a place without a washer dryer??
The Board has made no attempt to find a compromise.  The main thing I hear is “you should have read the rules and regs before you bought”.
One other point of interest – the renter is the previous boss/employer of our office manager’s husband.. Conflict of interest maybe?”

Ok, any suggestions from the audience? I would be furious if I was this owner and had to schlep laundry baskets to the washateria. Remember if you have a real estate related question, write to me here at DallasDirt; we will post your question and try to find an answer or solution. I have begun lawyer-hunting for this reader already. Thanks!

I’m re-thinking my stance on hating homeowners associations.