Friday, May 27, 2011

Sen. John Carona defends controversial HOA rule | Dallas - Fort Worth

Sen. John Carona defends controversial HOA rule | Dallas - Fort Worth
Interesting viewing, because you get to see Carona deny that his policy is to have the attorney fees paid first and the association get its money sixth, then when the reporter tries to show him his own company's documents stating that policy, Carona flees, and has the reporter thrown out.

1 comment:

Anonymous said...

"Before he ended the interview, Carona said people make a conscious decision to join an HOA"

And there, in a nutshell, is evidence that Republicans -- and the conservatives, libertarians, and Ayn Randians who agree with this statement -- have as much a grasp on the real-world consequences of their theories as your typical college campus communist wearing a Che Guevara t-shirt driving around in a Prius sporting a "Hope and Change" bumper sticker.

People make a conscious decision to buy a house. As realtors often say, that decision is based on "location, location, location." Unless advocates produce some polling data otherwise, I have yet to see any evidence that consumers "make a conscious decision to join an HOA".

Some fine print in a unilaterally amendable document called a contract handed to them in the stack of papers at closing, which often only refers to a deed restriction that is publicly filed with the county offices

"on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard’"

does not qualify as "informed consent," and fails other requirements of Rational Choice Theory (PDF) necessary for a free-market to work.

Or do these right-wing communists really believe that people knowingly make their homes forever collateral to whatever debts and liabilities the HOA corporation creates?

...owners are essentially liable for the association’s debts. “What?” you say. Community associations are corporations, and aren’t shareholders protected from corporate obligations? Isn’t that the whole point of a corporation?

Yes, most community associations are corporations ― non profit mutual benefit corporations. But there is a major difference between a community association and the typical business corporation. With a typical corporation the investors’ (shareholders’) liability is limited to the amount of their individual investment. Community associations usually have something more ―lien rights to an individual owner’s separate interest, either a lot or a unit, and the personal obligation of an individual owner for his or her share of assessments.

The assets of an HOA corporation also includes the right to foreclose on a home -- in most states without judicial oversight -- for trivial amounts and reasons by applying HOA dues payments to disputed fines and attorney fees to create more debt for the homeowner -- even after the mortgage is paid off.

Even as corporations, HOAs are a defective product. Long story short: the purpose of a corporation is to protect a shareholder's personal assets from the corporation's liabilities, whereas HOAs endanger them.

The Republican Party must be proud to claim John Carona as one of their own.