I sued my HOA and WON


813
312 shares, 813 points

+1006 – TL;DR: The HOA documents did not grant the HOA authority to issue fines but they were doing it anyway. We sued, won and HOA Karen got kicked in the metaphorical nuts.

There seem to be a lot of posts about wanting to take legal action against an HOA but very few actually do it, so I thought I would share my story. This is not legal advice.

I’ve been in my HOA for ~15 (mostly) drama free years until a few years ago when the HOA changed management companies. The new one decided that they were going to be more proactive on enforcement of violations. Not that things were going downhill, they were not. Everyone’s home has basically doubled in value over the last few years, they are well maintained, nice, newer homes in a desirable area. The new PMC (prop mgmt co) got the board to adopt new rules and regs and new bylaws. The board has essentially been controlled by one old lady for about 10 years. I’ll call her Karen. Karen has never liked me and about 6 other families in the neighborhood and we suspected all along that she would use the new rules to target those she didn’t like, which is exactly what happened.

Some time later that year we started getting violation notices via email. For stupid shit. One was for a package left on the porch, one was for a bag of mulch left out. No fines yet but that came soon enough. Around the same time we decided to paint our house. Part of the process to have the color approved is you have to paint a 3’ square on the front so the ARC can look at it. They rejected it, so we painted another one, resubmitted it and waited… and waited… and waited… they never approved or denied the 2nd color so we waited for the 30 day clock to run out after which you can assume approval.

Then the fines started. With no warning we got an email stating that we had been fined for having “mismatched paint”. Yes! They were fining us for painting the squares that they require in order to approve a color! We were also fined for having Christmas lights in the summer. There have never been Christmas lights on our house (this was likely an address mixup). We complained on the HOA’s website but were banned immediately. So far this was all done via email, but to appeal a fine you have to send a certified letter to the PMC which we did but in the meantime we spoke to a lawyer who specializes in HOA law. He reviewed our DCCR and all other docs and gave us this advice for the appeal. Just politely say that “you do not think that the board has the authority to issue fines”. That’s it, don’t get into anything further. That’s exactly what we did and the board was gobsmacked at our gall to question their omnipotence and our non participation in their “appeal”. They upheld the fines as expected which made our lawyer very happy. We also learned that someone else had been fined for having too many cars and someone else got a mowing fine that was intended for their neighbor. This PMC was completely incompetent. Add a fair dose of malice from Karen and indifference from the other board members and you get a train wreck.

What we knew but apparently they didn’t is that HOAs in TX do not have a statutory authority to issue fines. That power must be granted in the restrictive covenants and ours did no such thing. There is also a law, Ch209 of the TX property code, which among other things, states that before fines can be issued the HOA must send a certified letter to the owner giving them an opportunity to cure the violation. They did no such thing. 209 also states that all board meetings must be open to all owners and any meeting where rules, regs or bylaws are going to be discussed must be noticed to all homeowners. They didn’t do any of that. We had them dead to rights and everyone knew it. TX also has a law that grants attorney’s fees to the prevailing party in a suit about violations of covenants. This usually benefits the HOA but it can work both ways.

Our fantastic attorney wrote a devastating but absolutely beautiful complaint. (It was pure poetry and I should have it framed). It was served on the board and PMC. I don’t know what went on behind the scenes but I imagine it was pure panic once they spoke to a lawyer who told them they were totally fucked.

A few weeks later we heard that “Karen” and a couple other board members had decided that they were just too busy to continue serving on the board and sadly had to step down. There was an election and now the board is controlled by the very people who had been targeted by their BS fines. The HOA lawyer asked to settle. We asked for:

1. Refund all fines, late fees, and penalties ever issued to anyone over a violation plus interest
2. The PMC can no longer have anything to do with violations. They can only do administrative things.
3. Revoke all actions taken by the board in the last 4 years
4. Add a term limit that prevents Karen from running again for 10 years (it doesn’t name her but is worded so that it only applies to her)
5. And of course pay all our legal fees.

We could have gone further but at this point the bad board members had fled the scene so we would just be inconveniencing people who had been on our side all along.

This worked out really well for us, but a few words of caution. If the HOA had decided to fight there is a 50/50 chance that we would have LOST at the district court level. This is because in TX judges are elected and the HOA lobby (CAI) is a huge contributor. Many district court judges will grant summary judgement against any homeowner regardless of the facts. We definitely would have won on appeal but we had to be prepared to go the distance and pay up to $20k or more out of pocket knowing that eventually we would get it back. And no, HOA lawyers do not work on contingency and they are expensive AF. Another word of caution for anyone considering legal action, make sure that you have a lawyer who specializes in HOA law. Not real estate law, not your cousin’s college roommate who just passed the bar. The deck is stacked against the homeowner and even with a slam dunk case it could be ruinously expensive if the HOA decides to go the distance just to fuck you over. You are spending your own money to fight. The HOA is also spending your money and that of your neighbors and their insurance company to fight back. A large HOA could spend $100k+ and make you do the same just to make an example out of you. You need a lawyer who has done exactly this before and knows HOA law inside and out.

At the end of the day, you have to weigh the cost and benefit of a lawsuit just like anything else. In my case, it was worth it because we don’t plan to move and this was the only way guaranteed to stop the BS and get the HOA back on the rails.

2022-06-23 18:09:58

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813
312 shares, 813 points
MoPanic

22 Comments

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  1. There are a surprisingly high number of HOAs that do not have the authority to fine owners, or that the authority to fine defines a specific amount that is decades old.

    At the end of the day, the CC&Rs must have fining authority in them and if there is a fine amount, it cannot be exceeded.

    Our HOA was one of them until we got our CC&Rs amended. I’m surprised this doesn’t happen more often.

  2. A major part of the problem here and with the HOA industrial complex in general are the perverse motivations that the PMCs and the law firms who represent HOAs have. One of the bylaw changes that the PMC got the old board to adopt was a draconian collections policy with obscene late fees. The dues in this HOA are $400 per year. There are no real amenities, just some common areas that need maintenance. Under the old regime if you were late paying that $35 per month they would start stacking fees and penalties on to it and eventually a lawyer would start collections. Guess who gets to pay all of the legal fees for collecting late dues? The homeowner does. So $70 of missed dues could quickly turn into $500 of fees and penalties. That $500 could then turn into a lawsuit with $2000 in legal fees which the homeowner is on the hook for. After that a few thousand dollars can lead to FORECLOSURE on someone’s home. That is completely legal in Texas and happens more than you think. People can and do lose their homes over tens of dollars that turns into thousands. Yet what is truly sickening is that is exactly how these law firms make money. They will even represent your HOA for FREE as long as you use them for collections.

    As part of the settlement our HOA has removed all of this from our bylaws a but that is not the case for most HOAs.

  3. >If the HOA had decided to fight there is a 50/50 chance that we would have LOST at the district court level. This is because in TX judges are elected and the HOA lobby (CAI) is a huge contributor. Many district court judges will grant summary judgement against any homeowner regardless of the facts.

    Shit like this just shows you how much of a crock HOAs really are. Corruption from the top for a couple of dollars, so narcissists can get their narc fuel, and management companies rake in millions in ill gotten fines.

  4. This is a beautiful story. If an HOA can’t be consistent, fair, and legal, it should be smacked down hard. Good on you.

  5. One other point. The settlement was actually agreed to way back in January but it’s been held up this entire time on one little thing. The HOAs insurance company insisted on including a confidentiality clause that would have prevented me from discussing any of the settlement terms or facts of the case with anyone (or posting about it online). I refused to agree to that. I did agree to keep financial terms confidential but not the other terms or the “facts of the case”. That detail took 5x as long to work out than the entire rest of the case.

  6. And this is why electing judges, prosecutors and sheriffs is a bad idea, boys and girls.

    Unique to the US, these jobs should not be the result of a popularity contest.

  7. In TX John Corona the state senator pushed through legislation that favors HOAs and management companies. His legislation also was adopted by other states in the south east and AZ. Why? Well John owns ASSOCIA the largest most powerful (lobbyists) property management company in the country.

  8. So the HOA had to pay all these legal fees, but did the HOA karen have to pay anything?

    It sounds like the real fix was the new election and you could have asked the board for the same thing

  9. First of all congrats. I had a question.

    >What we knew but apparently they didn’t is that HOAs in TX do not have a statutory authority to issue fines.

    *Sec. 202.004. ENFORCEMENT OF RESTRICTIVE COVENANTS. (a) An exercise of discretionary authority by a property owners’ association or other representative designated by an owner of real property concerning a restrictive covenant is presumed reasonable unless the court determines by a preponderance of the evidence that the exercise of discretionary authority was arbitrary, capricious, or discriminatory.*

    *(b) A property owners’ association or other representative designated by an owner of real property may initiate, defend, or intervene in litigation or an administrative proceeding affecting the enforcement of a restrictive covenant or the protection, preservation, or operation of the property covered by the dedicatory instrument.*

    ***(c) A court may assess civil damages for the violation of a restrictive covenant in an amount not to exceed $200 for each day of the violation.***

    1. How did your lawyer get around this part?
    2. Does it specifically have to say that the HOA’s can levy fines in the CC&Rs?

  10. Sweet god, I hate these HOAs, they Are government entities as in they can absolutely ruin your life. They need to be abolished and/or at the very least make them voluntary to participate in. Congratulations on your win, May there be many others. And to all the HOA trolls and shills that lurk here and will soon downvote, a big FUCK YOU with a tuberculosis infected dik.

  11. Can you PM me the info of the Texas HOA lawyer? Need it recently to the conflict with my HOA… Thank you!

  12. This just makes me so happy for where I live. I don’t need to know all this extra stuff to protect my property from vindictive busy bodies. Plus, I can do whatever the fuck I want to with my house and yard, which basically amounts to pack every available space with plants and paint the house a bold color.

  13. Better pass boldly into that other world, in the full glory of some passion, than fade and wither dismally with age.

  14. “make sure that you have a lawyer who specializes in HOA law. Not real estate law…”

    HOA law is part of real property law. You do want a real estate lawyer, and more specifically one who has HOA experience.

    But other than that, solid win. The covenants typically control in this situation. Having a few specific statutes makes it even better in this case.