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Subject: Texas, Harris County, HOA records request law
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JaredC
(Texas)

Posts:97


06/06/2018 11:32 AM  
If I ask for a detailed Accounts Receivable of all homeowners is there any reason why the HOA would be unable to fulfill this request? I've looked over TPC 552.002 (which is applicable to our HOA under 552.0036) and it looks like the HOA is, in fact, obligated to provide me the information if I ask for it. Am I missing something?

Our HOA is ultimately responsible to pay for all Electric, Gas & Water usage by homeowners. There are sub-meters installed to help our HOA properly allocate these costs to individuals homeowners.

Anyway some people don't pay which means all their neighbors are effectively forced to pay for their utilities via our monthly HOA maintenance fees. As you might imagine this infuriates paying homeowners.

Thanks!

JaredC
(Texas)

Posts:97


06/06/2018 11:50 AM  
Hmm.. I just found 209.005(k) and it says the HOA is not REQUIRED to release the information. To me that means they can still do it if they choose.

*************

(k) Except as provided by Subsection (l) and to the extent the information is provided in the meeting minutes, the property owners' association is not required to release or allow inspection of any books or records that identify the dedicatory instrument violation history of an individual owner of an association, an owner's personal financial information, including records of payment or nonpayment of amounts due the association, an owner's contact information, other than the owner's address, or information related to an employee of the association, including personnel files. Information may be released in an aggregate or summary manner that would not identify an individual property owner.

(l) The books and records described by Subsection (k) shall be released or made available for inspection if:

(1) the express written approval of the owner whose records are the subject of the request for inspection is provided to the property owners' association; or

(2) a court orders the release of the books and records or orders that the books and records be made available for inspection.
JohnC46
(South Carolina)

Posts:7634


06/06/2018 12:14 PM  
Typically one can see a report of delinquencies but not listing the specific person. The BOD can see the specific names and amounts but otherwise it is privileged information. It is a matter of privacy.

I for one do not agree as I believe in public shaming, I would name them all to all association members.
JaredC
(Texas)

Posts:97


06/06/2018 12:34 PM  
I agree. It is totally sickening. Our HOA is only 24 units a really bad actors abuse the law. We can't even turn off their utilities! It is utterly immoral and unethical. We don't have enough money to do common maintenance because of the abuse! It's just sick.
JaredC
(Texas)

Posts:97


06/06/2018 12:36 PM  
We have 46k in A/R because of this!!!!!! Our annual maintenance fees only amount to 95k!
AugustinD


Posts:1082


06/06/2018 1:57 PM  
Hire a collections attorney and go after the most delinquent owner. Others will start shaping up. Do not use a collections agency.
JaredC
(Texas)

Posts:97


06/06/2018 2:07 PM  
Yeah we've done that. Offender #1 was foreclosed on by the bank so the HOA lost 15k. Offender #2 has now filed bankruptcy 3x and successfully avoided paying us for YEARS with this method, 10k. Offender #3 filed bankruptcy and while on a payment plan still owes north of 10k (we'll never see the money). A couple more owe 2-4k each. The legal process takes forever and for all intents and purposes doesn't help. 20% of our homeowners aren't paying while most of the others complain about the lack of money and blame the board who isn't allowed to tell people which homeowners are delinquent and by how much. I could go on all day!
DouglasK1
(Florida)

Posts:1175


06/06/2018 2:27 PM  
Posted By JaredC on 06/06/2018 11:50 AM
Hmm.. I just found 209.005(k) and it says the HOA is not REQUIRED to release the information. To me that means they can still do it if they choose.

*************


I would agree that based on this the association could release that info. We've had thread where many posters say associations can't or shouldn't due to privacy or other concerns, but I don't recall any posts that actually point to laws, legal precedents, or other solid reasons not to release the info.

FWIW, and we've had this discussion before too, Florida has a broad open records law that applies to associations with very few things excluded. Based on my reading and posts by others it appears that an association here would have to make full accounts receivable/collections info available for inspection by any member. Some items, such as SSNs can or must be kept confidential, but not the names or addresses.

Escaped former treasurer and director of a self managed association.
BenA2
(Texas)

Posts:525


06/06/2018 4:58 PM  
Posted By AugustinD on 06/06/2018 1:57 PM
Hire a collections attorney and go after the most delinquent owner. Others will start shaping up. Do not use a collections agency.



This may work but you better first have a policy setting a threshold and go after everyone who reaches that threshold. Otherwise, you are asking for a discrimination lawsuit.
BenA2
(Texas)

Posts:525


06/06/2018 5:08 PM  
I think you are probably right that they could release the information, but I don't think it's a good idea. People could use it to harass the delinquent owners which could open the HOA up to liability.

I would concentrate on getting the board to try to collect from the delinquent owners rather than be concerned about who they are. I hope they are at least putting liens on their property so they will likely eventually get paid.
BenA2
(Texas)

Posts:525


06/06/2018 5:15 PM  
Posted By JaredC on 06/06/2018 2:07 PM
Yeah we've done that. Offender #1 was foreclosed on by the bank so the HOA lost 15k. Offender #2 has now filed bankruptcy 3x and successfully avoided paying us for YEARS with this method, 10k. Offender #3 filed bankruptcy and while on a payment plan still owes north of 10k (we'll never see the money). A couple more owe 2-4k each. The legal process takes forever and for all intents and purposes doesn't help. 20% of our homeowners aren't paying while most of the others complain about the lack of money and blame the board who isn't allowed to tell people which homeowners are delinquent and by how much. I could go on all day!



Bankruptcy doesn't affect liens in Texas. Bankruptcy documents will state this in the document, at least all the ones that I have seen. Foreclosures should not affect liens either since the lien is attached to the property, not the owner.

In the history of our HOA (about 20 years) I don't think we've ever lost money where we had a lien. It may not be collected with each sale but eventually they will use a title company and we get our money.
JaredC
(Texas)

Posts:97


06/06/2018 6:02 PM  
You're right. Those liens have been filed.

Offender #1 failed to launch. He's a 50 year old bad actor who always had mommy and daddy to pay his bills. Daddy died and mommy has cancer so bad actor moves in with mommy to "care for her" after his home was foreclosed upon; It's only been 3 years since the foreclosure and roughly 6 since our HOA has received any payment. I guess I'm just impatient.

Offender #2 has been playing the game for 6 years. Still impatient.

Offender #3 is currently on a payment plan. Guess that's good. Still owes 10k from the previous 6 years. Still impatient.

At the end of the day cash flow is a crucial part of an HOA especially one our size. I am beyond cynical.
JaredC
(Texas)

Posts:97


06/06/2018 6:11 PM  
Lawyers... yeah... we've hired and fired 5 of them in the past 6 years. I want my money. We want our money. I'm not fond of lawyers either. Cynical really doesn't describe my condition. Our HOA could have had the money to repair our soffits/and fascia which might have prevented the rat infestation in my attic. I had to use a stick to bang the body of a rat out of a steel cage trap today because the rat tried desperately to free itself after it was caught. There is a reality on the ground that bad actors (sociopaths) don't care about and the rest of us have to deal with. It's sickening.
AugustinD


Posts:1082


06/07/2018 7:33 AM  
Posted By BenA2 on 06/06/2018 4:58 PM
Posted By AugustinD on 06/06/2018 1:57 PM
Hire a collections attorney and go after the most delinquent owner. Others will start shaping up. Do not use a collections agency.


This may work but you better first have a policy setting a threshold and go after everyone who reaches that threshold. Otherwise, you are asking for a discrimination lawsuit.


I think you mean a "selective enforcement" lawsuit. There is no unlawful discrimination.

I disagree that a policy is needed. The governing documents are typically clear about a HOA's right and duty to collect.

Regardless, the OP's HOA sounds so broke that it may be on the slippery slide down to inactivation.


SheliaH
(Indiana)

Posts:2228


06/07/2018 8:25 AM  
With all due respect to John, I have yet to see any instance where public disclosure of HOA delinquencies (at least to fellow homeowners) resulted in people coughing up the cash Otherwise in my 10 years on the board (5 as treasurer) I would have done it in a heartbeat. In fact, there’s one homeowner in particular I would have loved to expose – once people got a whiff of that debt, they might have stormed the house and tossed her out, saving the board the trouble!

Public shaming may have worked years ago when it comes to debt collection and other matters where one’s word should be their bond, but not anymore. Especially when you see ads talking about how you can become debt free via bankruptcy or by using secret methods credit card companies don’t want you to know about (I hear that line on a radio ad every morning!)

Douglas asked about the legalities of letting others know who the deadbeats are - the Fair Credit Reporting Act prohibits telling people about your credit history without a valid need. This is a federal law and many states have an equivalent law. The penalties for violating it are pretty steep, so I wouldn’t even think about going down that yellow brick road. Go to the Federal Trade Commission website for more information.

PS: there has been discussion elsewhere as to whether the Fair Debt Collections Act also applies to HOAs because they aren’t collection agencies, but I’ve seen opinions from attorneys indicating that it does, so you might want to take to your association attorney and get his/her take.

Besides, fairness would demand that EVERYONE’s record be put on display – I, for one, don’t think it’s anyone else’s business, unless they’re willing to pay someone’s delinquent assessments. In that case, I would have gladly coughed up the information as soon as the check cleared! The homeowners could work out what happened next regarding repayment.

I do agree homeowners do have a right to know general numbers regarding delinquency – how many people, how much is owed, how many have been referred to the association attorney for collection. When I was on the board, we published such a summary in our newsletter. Although you can’t name names, you can and should tell all the homeowners how failure to pay ultimately affects their quality of life and those property values everyone cares about. It’s unfair for those who do pay to indirectly support those who don’t – and that’s when the board has to make tough decision on what bills get paid – THAT’s why this and this isn’t being done.

Jared, I understand your frustration, but the best I can tell you is to stay the course as much as you can. The board should be doing everything possible to collect, and yes, that may include foreclosure (a last resort and another conversation in itself).

Continue to evaluate your collection policies to ensure you’re catching these things earlier because the longer people stay delinquent, the harder it becomes to collect. Make sure everyone knows what to expect if they don’t pay and apply the policy quickly and consistently, leaving some room for compassion, as some people do run into trouble because of job loss, major medical illness, etc. In those cases, it’s fine to negotiate a payment plan, but the association’s interests must take priority.


JaredC
(Texas)

Posts:97


06/07/2018 9:34 AM  
A very thoughtful response SheilaH. As an update I have an appointment with our management company today to get a detailed accounts receivable list. Apparently no one sees any issue with disclosing this information but I must admit I was president of the board for 12 years or so before I quit and our attorneys always said NOT to disclose the info. Yes, I will take what I can get but I still want to be very cautious of how I use the information because I don't want to expose the HOA to unnecessary legal liability. I have a great working relationship with most of our board members and management and those people don't deserve the extra headache that might arise from me spilling the beans to the entire community. IDK. Guess I'll go look up the Fair Credit Reporting Act for more direction. Nevertheless all normal homeowners are furious because we don't have money and some other person got it right...we're just trying to remain solvent. If shaming people into paying helps achieve that goal maybe it's worth it.
JaredC
(Texas)

Posts:97


06/07/2018 9:34 AM  
A very thoughtful response SheilaH. As an update I have an appointment with our management company today to get a detailed accounts receivable list. Apparently no one sees any issue with disclosing this information but I must admit I was president of the board for 12 years or so before I quit and our attorneys always said NOT to disclose the info. Yes, I will take what I can get but I still want to be very cautious of how I use the information because I don't want to expose the HOA to unnecessary legal liability. I have a great working relationship with most of our board members and management and those people don't deserve the extra headache that might arise from me spilling the beans to the entire community. IDK. Guess I'll go look up the Fair Credit Reporting Act for more direction. Nevertheless all normal homeowners are furious because we don't have money and some other person got it right...we're just trying to remain solvent. If shaming people into paying helps achieve that goal maybe it's worth it.
BenA2
(Texas)

Posts:525


06/07/2018 2:55 PM  
Posted By AugustinD on 06/07/2018 7:33 AM
Posted By BenA2 on 06/06/2018 4:58 PM
Posted By AugustinD on 06/06/2018 1:57 PM
Hire a collections attorney and go after the most delinquent owner. Others will start shaping up. Do not use a collections agency.


This may work but you better first have a policy setting a threshold and go after everyone who reaches that threshold. Otherwise, you are asking for a discrimination lawsuit.


I think you mean a "selective enforcement" lawsuit. There is no unlawful discrimination.

I disagree that a policy is needed. The governing documents are typically clear about a HOA's right and duty to collect.

Regardless, the OP's HOA sounds so broke that it may be on the slippery slide down to inactivation.





As far as I know, selective enforcement is not illegal, per se, (at least not federally or in Texas) but the practice may lead to the perception of discrimination. Actual discrimination does not have to exist for a suit or for the HOA to lose. An enforcement policy may not be required but arbitrary decisions make it harder to defend a lawsuit.
JanetB2
(Colorado)

Posts:4151


06/07/2018 11:38 PM  
Posted By JaredC on 06/06/2018 11:32 AM
If I ask for a detailed Accounts Receivable of all homeowners is there any reason why the HOA would be unable to fulfill this request? I've looked over TPC 552.002 (which is applicable to our HOA under 552.0036) and it looks like the HOA is, in fact, obligated to provide me the information if I ask for it. Am I missing something?

Our HOA is ultimately responsible to pay for all Electric, Gas & Water usage by homeowners. There are sub-meters installed to help our HOA properly allocate these costs to individuals homeowners.

Anyway some people don't pay which means all their neighbors are effectively forced to pay for their utilities via our monthly HOA maintenance fees. As you might imagine this infuriates paying homeowners.

Thanks!


Can those sub-meters be changed so that each owner pays their own utility bills directly to the utility companies? That would be the avenue I would pursue. It appears to me from your posts that owner’s are using and abusing the HOA utility responsibility. Because of this if it is possible and the HOA does not vote to approve ... potentially a court could intervene to enforce the option for the benefit of the overall HOA.
AugustinD


Posts:1082


06/08/2018 5:55 AM  
Posted By BenA2 on 06/07/2018 2:55 PM
As far as I know, selective enforcement is not illegal, per se, (at least not federally or in Texas) but the practice may lead to the perception of discrimination. Actual discrimination does not have to exist for a suit or for the HOA to lose. An enforcement policy may not be required but arbitrary decisions make it harder to defend a lawsuit.


If the HOA issues and pursues a violation against one member for, say, a shed, but does not issue this for other members with a shed, then this will play a big role in the first member's defense.

Unless discrimination on the basis of race, sex, religion, disability or one of the other Fair Housing Act protected classes is occurring, "discrimination" is the wrong word to use.
JaredC
(Texas)

Posts:97


06/08/2018 7:01 AM  
Yes JanetB2 it could be setup where each individual has an account with the power company and that idea is something many of us have wanted to do for a very long time because of the liability issue for the HOA and the abuse by homeowners. The ONLY reason we haven't gone that route is cost. It would be a minimum of $1500 per unit which translates into at least a 36k project. We have very significant other maintenance project that need to be done like replacing soffits/fascia - 20k, replacing roofs 80k, perimeter fence maintenance 10k, etc. and we're almost insolvent as is. It really is a catch 22 situation with no good answers. Heck we just had to do a major electrical project last year for 80k which causes us to take out a 5 year loan. Luckily I was president for a dozen years and have a solid background in accounting so we have managed to get through the very dark times relatively unscathed but let's face it money is money. It's a limited resource and only so much comes in and priorities have to be made. Special assessments require approval from 66% of the homeowners and are only good for one calendar year and people HATE them; it's a human issue and I can honestly say I don't blame people for their positions. Gotta love management.
BenA2
(Texas)

Posts:525


06/08/2018 7:57 AM  
Posted By AugustinD on 06/08/2018 5:55 AM
Posted By BenA2 on 06/07/2018 2:55 PM
As far as I know, selective enforcement is not illegal, per se, (at least not federally or in Texas) but the practice may lead to the perception of discrimination. Actual discrimination does not have to exist for a suit or for the HOA to lose. An enforcement policy may not be required but arbitrary decisions make it harder to defend a lawsuit.


If the HOA issues and pursues a violation against one member for, say, a shed, but does not issue this for other members with a shed, then this will play a big role in the first member's defense.

Unless discrimination on the basis of race, sex, religion, disability or one of the other Fair Housing Act protected classes is occurring, "discrimination" is the wrong word to use.



I meant discrimination in that context. My point is that arbitrary enforcement gives someone ammunition if they decide to bring a discrimination case. If you don't have a policy reason for going after one owner and not another, they may conclude it had to do with their race, religion, etc. even if it is not actually true.

It's not like criminal court where you can remain silent and the prosecution has to prove their case. If the owner presents evidence that you discriminated against them, the burden shifts to you to show you did not. If you have a policy of taking legal action against anyone who is $500 or more behind in their assessments, for example, and you follow that policy, you have a good defense.
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