David Kahne, a Houston lawyer who advises homeowners, says that in Texas, the law is so weighted in favor of HOAs, he advises people that instead of hiring him, they should call their association and beg for mercy.
"I suggest you call the association and cry," he says.
If a homeowner misses a couple of association dues payments, the s250 or s500 they owe often becomes s3,000 after the association's lawyers add their legal fees, Kahne says.
It's not the HOA that has to pay the lawyer's bill but the delinquent homeowner. If the homeowner wishes to contest and loses, the owner is on the hook for legal fees that could run deep into the tens of thousands of dollars.
Kahne says that as the economy has gone under, HOA management companies and lawyers have been making millions off homeowners through this foreclosure process.
"We're having literally thousands of lawsuits filed over very small amounts of money," Kahne says. "And those very small amounts of money rapidly become large amounts of money when the association attorneys add their bills."
These are the worst of times and the best of times in Privatopia, USA. Texas attorney David Kahne reports as the HOA foreclosure machine grinds up delinquent homeowners and auctions off their properties for a relative pittance, the community association industry is enjoying a bonanza of legal and other fees. And as with mortgage lenders, homeowners in arrears can only beg for forbearance since they don't have the law on their side in most states that allow nonjudicial foreclosure by HOAs, Kahne notes.