J. Patrick Sutton Cases & Issues Blog

HOA and ACC abuse is an epidemic

Judging from the volume of calls and new cases in my office, abuse and overreach by homeowners' associations and architectural control committees is now an epidemic. Most Texans now live in subdivisions governed by HOA's. Yet HOA's are, for the time being, immune to the very sorts of lawsuits which keep governments in check because they are not, technically, "government." In fact, they are — they levy taxes, impose penalties, patrol streets, and pass rules intended to govern people's behavior. The various stopgaps the Legislature imposes every few years are not just insufficient, but actually make things worse. The law surrounding HOA's is now so complicated that homeowners who run HOA's cannot understand the law and run afoul of the law constantly, generating lawsuits. There is no way around the fact that the increasing complexity of HOA laws means that lawyers have their fingers in every pie. By trying to salvage privatized local government, the Legislature just keeps making things more convoluted, expensive, and worse.

In no particular order, here are some of the most intractable problems which point up how powerful HOA's are becoming:

1. HOA boards and ACC's, without any vote of all the owners in the subdivision, write and record new documents endowing boards and ACC's with new powers not authorized by the restrictive covenants. Sometimes, these entities just create themselves and declare they are in control because they style themselves as a "homeowners association." These are horrible forms of abuse because small groups of owners are simply giving themselves control and then meting out punishments. And I am finding that trial courts and courts of appeals go along with it for reasons I cannot fathom and in stark contradiction to what the law has long been understood to be. HOA's seem to get a pass just because they declare they are in charge.

2. HOA boards and ACC's summarily impose fines and penalties against owners with the due process rights which Texas law affords owners (Texas Property Code Chapter 209). They create fines, fees, and charges without any authority.

3. HOA boards defy controlling law and sue owners for things that are not, in fact, breaches of restrictive covenant, knowing that few owners can afford to fight. Here again, local judges seem to defer to HOA boards. Why are they not deferring to property rights and individual rights?

4. Majorities of owners are targeting individuals with "amendments" to restrictive covenants which either take away preexisting rights or else impose harsh new burdens. The whole basis of the bargain is being thwarted and undermined.

From my vantage point, HOA's — and groups of owners merely claiming to be HOA's — are out of control. The lawyers who represent them seem happy to argue positions so deeply repugnant to basic liberty that one wonders whether they do not stop to consider how the positions they argue might not come back to haunt them; in the meantime, they're getting rich off the jury-rigged system I call the HOA-Industrial Complex.
J. Patrick Sutton Cases & Issues Blog