Tuesday, December 27, 2011

New Homeowner Association laws could slow down foreclosures

There are more than 30,000 homeowner associations in Texas. Starting January first, they will fall under a new set of laws that put some limits on their power.

Some associations have been accused of moving to swiftly to foreclose on a member’s homes simply for missing annual dues. Under the new laws, associations must now get a court order before foreclosing and notices have to be sent out.

"The purpose of these new laws is to tip the balance of fairness back in favor of homeowners and provide homeowners associations more rigorous rules they have to abide by", said Attorney Clint David.

1 comment:

Anonymous said...

Ronald Reagan didn't go to Berlin and say, "Mr. Gorbachev, lower this wall by 10 feet." He demanded that the Communists tear it down. It is insanity that we even accept the legitimacy of foreclosure by HOAs. That's the idea that needs to be challenged, not tweaking the required paperwork or dollar amount at which it's OK for HOAs to foreclose. That we do accept this shows that given enough time, the public can be properly conditioned by an industry run by and for the benefit of rapacious lawyers. What is that metaphor about the frog and hot water?

The story says that the new laws could (not will) limit the power of HOAs to foreclose. An industry spokeswoman states that a majority of HOAs already follow the law "and these new laws are really aimed at the few that do not."

Given the inherent bias of judges and moral corruption of the court system, judicial review offers very little -- if any -- protection for homeowners. As Professor McKenzie wrote a few days ago, "the days are long past" when judges were willing to intervene in matters of unconscionability. Individual citizens are still, in the Professor's words, "relatively powerless."

The accompanying video states that "The new laws could trigger more legal costs for these homeowners associations dealing with filing paperwork and for just simply compliance. Those costs are likely to be passed on to the homeowners themselves." As regular readers of this blog are aware, the business model of HOAs is to generate fees for the HOA's attorneys. Homeowners are not their HOA's customers, they are their HOA's product.

My prediction: Not much will change, and not necessarily for the better. The legislature will say "See, we did something" and "move on from HOA legislation to other matters, like selling the state tollway system to Spanish and Australian corporations to finance free health care and early childhood education for all. Happy ending." Home Owner Abuse will continue as before, and homeowners will be told by the courts and politicians and pundits that they agreed to be abused. But that won't stop conservatives from gnashing their teeth because the government has imposed some regulations on private corporations. In Rick Perry's freedom-loving business-friendly Texas, of all places! In a few years, the symbolic protections passed this year will be quietly be undone. And nobody will notice, because in reality, they didn't make much of a difference anyway.

Meanwhile, inspired by the Bolivian example of privatizing water, where "All these laws and contracts also prohibited people from gathering rainwater. So rainwater was also privatised. Unpaid bills gave the company rights to repossess debtors' homes and to auction them off", John Carona will purchase several large private water companies in Texas. Associa managed HOAs will then require homeowners to use more water. For those not familiar with Associa, listen to the December 8, 2011 episode of On The Commons.