It appears that HOA's are starting to have their teeth pulled, one at a time. http://www.chron.com/cs/CDA/story.hts/topstory2/1380388 Ruling reins in resident groups Appeals court shackles neighborhood associations By T.J. MILLING Copyright 2002 Houston Chronicle A Texas appeals court appears to have dealt a blow to homeowners associations, limiting their power to use foreclosure to collect delinquent dues. The 6th Court of Appeals held that a 1995 law in the Texas Property Code cannot be used to raise dues and foreclose on delinquent homeowners. That law, part of the state code but applicable only to Harris County, was written to give the organizations more power to deal with Houston's lack of zoning. The court in its April 18 decision on Geneva Brooks v. Northglen Association in northwest Harris County appears to be saying the organizations have abused that power, critics said. "This is a very important precedent. ... This decision reins in homeowners associations," said David Kahne, attorney for the homeowners in the case. "It's a welcome step forward for homeowners to be secure within their deed restrictions." Absent zoning, deed restrictions are an important way to protect property values by keeping unwanted businesses out of neighborhoods and making homeowners maintain minimum upkeep. But publicity about cases like that of Wenonah Blevins, 83, who lost her $150,000 home in northwest Harris County last year over an $814.50 delinquency, have fomented critics of the organizations' power. Blevins and the Champions Community Improvement Association settled, and she got her home back. It was not immediately clear how the ruling would have affected her case. In the appeals court ruling, the three judges addressed five issues. In the first, the court ruled that the homeowners organization could accrue increases. This means that if the dead restriction allows a 10 percent increase a year in dues, the organization could wait five years with no increase and then raise dues by 50 percent, or 10 years and raise them 100 percent. The second issue was whether Northglen Association could raise dues above limits set out in the deed restrictions. The answer was yes and no. In one part of the subdivision, the language of the restriction set an explicit cap, so the court held the dues were limited to the cap unless homeowners voted to raise them. In another part, the language was not as specific, so the court held the organization could use the 7-year-old law, Texas Property Code Chapter 204, which doesn't require a vote or set a cap. The lone dissenting judge said both parts should be capped and subject to a vote for increases. The third issue was whether the organization could charge late fees, and the court said yes. The fourth issue was whether the organization could foreclose on delinquent property owners. The court held that the deed restriction must have explicit language stating the threat of foreclosure for nonpayment of dues. Absent that, the organization could not use Chapter 204 to foreclose. The fifth issue was whether the homeowners could recoup legal fees. The court said no. Attorney Michael T. Gainer, the author of Chapter 204, called the decision "a tie," meaning that fees could be raised to maintain neighborhoods for the protection of property values but foreclosure was no longer an option in some cases. Kahne, the owners' attorney, called it a huge win for homeowners by removing to some extent "the hammer of foreclosure." "Recognition of the limit on foreclosure power sets a substantial limit on the abuses in the collection process by attorneys," he said. Brad Mitchell, attorney for Northglen Association, said he thought it was a narrow decision on specific points of law. Neither side has yet decided whether to appeal the decision to the Texas Supreme Court, but Kahne said, "the battle over Chapter 204 is far from over."
Thank God. I would personally volunteer to pull the teeth of HOAs with a rusty set of plyers, one by one.
While I think these are extreme cases. HOA's are there to protect the property values of everyone. I know I don't want a bunch of people parking in their yard, and leaving transmissions lying around. DaDakota
One bad result from HOA abuse is one I am starting to see a lot more of. When people have legit concerns they bring to their HOA..and when those HOA work to get deed restrictions enforced through the courts...the courts are becoming very hesitant to rule in their favor...judges fear bad press when they know they're up for reelection...and this is such a hot-button political issue. so the end result is the pendulum shifts in such a way as to make it more difficult to enforce necessary deed restrictions.
To see this side of why HOAs are considered necessary by some, there's a case in Dallas right now regarding a man who moved a manufactured home onto his lot in a relatively upscale neighborhood. Needless to say, the neighbors are up-in-arms about it, but their only course of action is to spend association money on lawyers and a lawsuit. I tried to find the link on DallasNews.com, but I couldn't. I'd wonder, though, what the quantifiable amount of property value damage having such a neighbor would cause.
HUGE damage. A munafactured home could lower values by a significant margin. In this case I would be right there with the rest of the neighbors trying to get his house OUT of there. Of course, this can all be handled up front by not ALLOWING manufactured houses to be built in the neighborhood to begin with. DaDakota
How do you not allow it? The deed restrictions already specifically prevent such things (according to the Dallas Morning News article that I wish I could find). Other than physically preventing the trucks from moving in (which could be dangerous or potentially illegal), their only recourse is to go to court after the fact.
Da: Two points on this issue. 1. Deed restrictions have been shown in study after study to be no indicator of property value maintenance. It is absolutely no indicator of maintaining home values in the area. The main reason for this is that neighborhoods change as a part of the way we live. Twenty years ago, a neighborhood on Houston's north side with good deed restrictions was a valuable property. Today, property values in that area have diminished or remained even with inflation because the average home buyer only stays in his/her current neighborhood for ten years. As people move out of the neighborhood and into "nicer" one's, the property values decrease irregardless of the deed restrictions in place. If you really want to protect home values, the best way to do it is to demand urban planning and development restrictions from local government. It is nearly always the encroachment of businesses outside the neighborhood that diminshes property values, not the homes within. 2. For abandoned cars, trash in yards, overgrown yards, etc, those things are handled far more efficienly by local city and county ordinances prohibiting those types of things. I don't have a problem with deed restrictions that protect the neighborhood from legitimate problems - business encroachment (auto shops, night clubs, etc) for example - or that help to maintain community property like pools or parks. I just have a problem with over-zealous nature of many HOA's and, in particular, the lawyers that represent them.
I can tell you I have seen from my experience with my clients that deed restrictions and property value CAN go hand in hand. Investors/builders simply don't spend time and money in areas where they are concerned that deed restrictions aren't being truly enforced. I have a case exactly on point going on right now.
Max: There was a really extensive article in the Chronicle a few months back about this very thing. They talked to experts from all over the country who agreed that the single most important factor in maintaining property value is the level of commnity (not neighborhood) support and planning for a given area. They said that HOA's might be able to help for a while but only long-term planning of the entire area would ensure the maintaining of values in the area.
the only way you can prevent your neighbor from putting in some ridiculous kind of driveway or something is through enforcement of deed restrictions. I don't see how one can argue that the guy next door's ugly/out of place sidewalk, fence, whatever, etc. would not affect the value of my home. And again..I represent two home builders right now who are arguing this very thing. Or I suppose I'm arguing it for them! They're saying, "this area sucked until the community got serious about enforcing deed restrictions...if you let her get away with this, then you lose this argument again as to anyone else who tries to break these restrictions...and then the area we invested in goes right back to the crapper again."
I guess it all depends on your definition of what is a problem and what isn't. There are purple houses, old shacks, broken up driveways, alleys, auto body shops and even trailers in the Heights, yet our property value increases rank among the tops in the city and we have no deed restrictions. Part of it depends on the community's standard. White picket fences, porches and landscaped yards are often among the things at the top of HOA no-no lists, yet those are the very things that are often used to illustrate the "traditional American home." I agree that there are certainly things that neighbors can do to make the value of the area less, but my problem is that most of the things HOA's focus on have little to do with real property value assesment and more to do with what a small group of people THINK will effect property value.
the Heights is about selling charm, history and location (inside the loop)...not all neighborhoods are like that...particularly not suburban neighborhoods...there, deed restrictions are more important in maintaining value.
HOA's are far too biased and political to provide any real benefit to neighborhoods. You would be surprised how strongly racism and prejudice can effect a tightly knit group of control freaks, who have to answer to no one. Besides, as a suburban neighborhood disintegrates, the HOA usually does also. As the people who bought the new houses leave the neighborhood the next batch of lower income homeowners move in and don't bother to appoint new members. That is why (as Jeff already said) city ordinances are much more effective at addressing issues like driveways, setbacks, property upkeep, etc. The HOA could fall apart, but the city will always be there. HOA's usually end up harassing homeowners about ridiculous garbage when they don't even know their a** from a hole in the ground. As for saving property values in suburban development.... it isn't possible. Not with deed restrictions, not without. The entire system is rigged against it. You move away from the city to avoid high property values, and buy a house that was built on a shoestring budget. What happens when that house falls apart and the property value hasn't gone anywhere? The house probably has a shorter lifespan than most of the inner city construction so this happens rather quickly, and it isn't worth remodeling because the market won't support the cost. Alas, the neighborhood goes to sh** and your only option is to move into a newer neighborhood. I don't want to make it sound like there aren't exceptions, but there are very few. Have to agree with Jeff again. It takes planning. ****If you move into a neighborhood for one reason only, and that is because it is clean, then you should expect it to get dirty at some point**** A good neighborhood should be able to survive a few bad seeds. One other point: you can't control everything.
Yes, but there is a reason it survived and it isn't because of deed restrictions. The combination of a good location and good planning on the part of civic leaders created a neighborhood condusive to longevity. Master planned communities don't really have a master plan other than how they can fit as many dwellings in a particular area. The problem with this philosophy is that they don't really plan for communities. They are planning for what is essentially a place to sleep and eat in between driving to work. They might encourage a mall or some strip centers to move in but they don't invest in the community because that isn't within their financial plan. That's fine if they want, but why do you think we have so many subdivisions that are now losing their property values? The fact is that, as Doc said, when people move out, so do the HOA's. They abandon the neighborhood for another location. The transient nature of these types of neighborhoods is simply not condusive to long term urban planning. I mean, generations of families have grown up in places like the Heights all over America. My grandparents (on both sides) lived only blocks from where I live now. It is actually more common for families to grow up in the same neighborhood in most cities than it is to build new developments. Ultimately, the only way to create long-lasting communities that survive is to build it into the way we plan the entire region. Those communities that have visionary community development survive and maintain property values. HOA's might help for a while, but, ultimately, you have to have the involvement of the entire community to see long-lasting results. My wife has a bunch of books on the subject and knows a lot more about it than me, but I very much respect some of the new movements that support re-developing rather than creating new developments. By doing so, you eliminate the need for HOA's because re-developing communities means going back into areas that have already fleshed out problems HOA's have to consider in new subdivisions.
Jeff, 18 years ago the Heights were on the low end of housing in Houston. The gay community actually started the rejuvination of the area. For new suburban areas, HOA's do serve a good purpose, it is when the neighborhoods get old and the prices drop and people lax on the restrictions that contribute to a downfall of a neighborhood. Heck, West U used to be a crappy place to live too....everything comes around....especially when it is close to downtown. In Austin, I am glad for our HOA, we have restrictions, and you sign them when you move in...if you don't like them....leave. DaDakota
The Heights and West U (as well as the Montrose) were part of a movement of young and old homeowners who believe in many of the principals of urban renewal which is why there is now a historic preservation ordinance on the books in Houston. The Heigts fell into disrepair (along with West U and the Montrose) because of a tremendous push by developers like Friendswood development to move people away from the city center. They developed Kingwood, the Woodlands, Friendswood and Clear Lake. The idea was to buy cheap land and put a bunch of homes on it with very specific restrictions, etc. It worked. However, it also created one of the country's worst traffic problems and pollution problems. People flocked to these neighborhoods because they were inexpensive big houses. However, now we see all over the country the move to re-claim the inner city. It is healthier for cities for everything from flood control and road planning to pollution control and crime prevention. Downtown areas around the country are seeing a resurgance of inner city living that is unprecidented and it is not due to deed restrictions because most inner city neighborhoods don't have them. I understand that HOA's serve a purpose in some places. Here is my concern with them in a nutshell. As it stands, some communites have 50 percent or more of their neighborhoods under the influence of deed restrictions. Some estimate that the number will increase to near 70 percent by 2020 and maybe as much as 80 percent 10 years after. The main problem I see with that is that suddenly my choice (and everyone else's) of a home is extremely limited unless I choose to conform to a set of standards that don't even exist as law. It's tough enough to make that choice if you can afford to shop around but no doubt the first one's to feel the pinch of lack of choices are those who can't afford to be choosey. I have no real problems with HOA's as long as enough choices remain, but I do worry about having my options narrowed by a group that, unlike government, isn't created by the people and doesn't really even have the power of law behind them.
Exactly !! It is your CHOICE, if you don't like it you can CHOOSE to live elsewhere. Yes, I hear your point about the percentage of homes, but, I think stats like that are exaggerated, most HOA's are in NEW development areas, or areas that already have an existing one. I concur with your take on Urban planning, and do like the Heights and West U, and Montrose, it has way more character then Kingwood. However, downtown would not have supported the 4 million plus people that live in Houston proper, so expansion had to go somewhere. DaDakota
