I’m sure most people have heard horror stories of Homeowners Associations run amuck. There have been a number of elderly women who have had their homes foreclosed on and sold to foreclosure vultures because they were unable to pay the associations’ fees.
Last year, Capt. Michael Clauer of Frisco, Texas returned home from an extended combat tour in Iraq to find that his $300,000 home had been foreclosed on and sold by his homeowners association. When he left for Iraq his wife became clinically depressed, failed to open any of the mail, and fell $800 behind in the fees she was supposed to have paid the association. By the time Capt. Clauer returned from the war, a foreclosure vulture owned their home after paying just $3,500 for it.
I live in a Houston suburb that is under the jurisdiction of the Clear Lake City Community Association (CLCCA). Now, as far as I know, CLCCA has never stooped so low as to foreclose on anyone’s home because they were unable to keep up with the fee payments. But CLCCA’s shenanigans are well worth noting.
CLCCA’s annual fee is rather low when compared to the fees of other associations. The low fee is imbedded within the association’s charter and can only be changed by an enabling act of the Texas legislature. An attempt to get such an enabling act passed met with failure.
The association has been spending more money than the amount generated by the fees and because of that faces the danger of going bankrupt in the not too distant future. Last year, CLCCA’s general manager came up with a devious scheme to get around the inability to increase the fee.
Her scheme involved mailing out consent forms to add an additional fee, and if the homeowner signed it and returned the form, it would be counted as a ‘Yes’ vote. The forms were mailed out near the end of last year and the results were to be finalized by the middle of February. Well, the deadline has long passed, but the general manager is still soliciting ‘Yes’ votes because only a small section of homeowners has agreed to the fee increase.
C. J. Miller, a homeowner, best described CLCCA’s shenanigans in a letter to The Citizen, a Houston community newspaper:
“I bet I could win an election if
__My constituents paid for my campaign
__I was the only choice on the ballot
__The election was allowed to continue for months until I received sufficient votes
__The completed ballots were returned to me for safekeeping.
And, once elected, I could reign forever as there was no sunset or term limits in the election provisions.
To other members [the homeowners} of the Clear Lake City Community Association, I trust this election description sounds familiar (to the CLCCA auxiliary residential community service charge election).”
How did CLCCA get into its financial predicament? It is facing bankruptcy because it is in the recreation business. It owns a 40-plus year old recreation center that includes swimming pools, a gymnasium and a fitness center. The majority of homeowners do not use these facilities. The user fees charged by CLCCA do not begin to cover the money needed for upkeep and repairs to the aging facilities.
CLCCA should, if it can, lease its facilities to a private recreation company. If there are no takers, it should simply shut them down. That would not hurt property values nor home sales one bit because realtors long ago stopped bothering to use the Recreation Center as a selling point.
Once CLCCA is no longer burdened by stuffing money down a bottomless rat hole, the current fees paid by homeowners will amply fund the enforcement of deed restrictions and the mowing of grass in the community’s common areas, which is all that will be left for the general manager to look after. And then CLCCA can save some more money too by reducing the general manager's salary.
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