Fox 7 News in Austin did a story on Senator Carona's management company practices November 20 and 21, 2006. In Austin, he engages in the same game via Alliance Association Management - another Associa company. Although everyone references Texas Property Code 209, no one seems to be publicizing the fact that Sen Carona WAS THE AUTHOR of that bill. Please note that Senator Carona authored the bill you refer to.
He is intimately familiar with the bill and it was "gamed" from day one to protect the practices of his management companies. He convinces HOA Boards to adopt these resolutions (which primarily benefit the management company). Although the Patton Boggs attorney seems to suggest that it was the HOA Board that was responsible for this policy, all one needs to do is look at the county clerk's office wherever Sen Carona's Associa companies operate. You will just as (Fox 7 News did) a significant number of HOAs that Carona's companies manage have coincidentally adopted the same resolution!
I doubt that Sen Carona really wants to get pulled into a discovery battle. You would certainly be entitled to discovery and you could demand copies of the "fining resolutions" adopted by every Texas HOA that his Associa companies manage.
The defense to this practice is the Fair Debt Collection Practices Act which at present has not been found to apply to HOAs in Texas. The FDCPA protects homeowners from this scam in many other states. Folks should know that CAI actually has Public Policies promoting elimination of the application of the FDCPA to HOAs. CAI does not advertise this racket which amounts to little more than extortion. Instead they try to eliminate the homeowner's defense to this extortive racket.
If the HOA assigns its "right to collect" to Carona's organization, then all his agents have to decide is how much to take from each homeowner. As it stands now, they can threaten homeowners with accusations of violations with impunity. No court, no judicial determination. The accused has no recourse. His management contracts also usually require the HOA members to indemnify his management companies. Yet another liability saddled on the homeowners against their will. Guess who pays the tab if the homeowner sues the management company to defend against these collection efforts.
You may also find that his management agreement requires payment to the management company of a percentage (10%) of any insurance claim payment exceeding $1,000,000. This fee is in addition to all other compensation fees. This fee is in addition to any deductibles the HOA pays. Since when did insurance pay 111% of the amount required to repair or replace? Either the HOA or the insurance company is likely to get the short end of this stick. Oh yeah, the HOA is paying its insurance premiums to Association Policyholders - another Sen Carona company. Guess it's the members getting the short end of the stick again.
As of the date of this comment, Sen Carona's Associa has updated standard templates for the "community websites" for HOAs his companies manage. Outrageously, the websites all proclaim that these HOA meetings are "open to the public" and that "all members can participate in various committees". This is probably in direct response to demands from homeowners for legislation to mandate open meetings and open records in Texas HOAs. These statements on his website are simply not true and are apparently designed to mislead prospective purchasers.
Aside from highlighting Senator Carona's self-serving legislation and his business practices of preying upon homeowners in these HOAs, there must be a push to impose liabilities on these management companies. In addition to any other actions, homeowners must seek a determination that the FDCPA applies in HOA contexts and that the HOA and its agents have a fiduciary obligation to the members.
I received the attached letter via certified mail this weekend.
I have done nothing but tell my story as it has been unfolding. Everything I have written has happened to me. I was there at the board meeting when the PMG representative presented the fine policy to the board members for their review. It is my opinion that our board members did not write the wording on this document. Our community has been without a fine policy since its inception in March 2002, so it is not a revised policy.
Our documents clearly state under Article VI, General Powers and Duties of the Board of Directors of the Association. 6.01
(o) To make reasonable rules and regulations for the operation and use of the Common Properties and to amend them from time to time, provided that any rule or regulation may be amended or repealed by an instrument in writing signed by all of the Properties, by a majority of the Members, or, with respect to a rule applicable to less than all of the Properties, by a majority of the Members in the portions affected.
The section quoted as the justification to force this on us was:
(r) If, as and when the Board, in its sole discretion, deems necessary, it may take action to enforce the provisions of this Declaration and any rules made hereunder and to enjoin and/or seek damages from any Owner for violation of such provisions or rules.
And in Article XII, General Provisions 12.02 Amendments (b) in all other situations, this Declaration may be amended or changed upon the express written consent of at least seventy percent (70%) of a quorum of the outstanding votes of all Members of the Association, regardless of class. (Note (a) not longer applies as we no longer have a declarant).
How did I misinterpret this? Seems clear to me. (o) has to happen before (r) if it is not already in the Declaration and didn't exist as a prior rule that was voted on.
And this statement is so obviously meant to bypass Texas property code 209.009.
New fine policy:
'Any accrued fines takes precedence over HOA dues and will be deducted from payments prior to the reduction of a resident's dues balance.'
Texas property code 209.009:
A property owners' association may not foreclose a property owners' association's assessment lien if the debt securing the lien consists solely of:
(1) fines assessed by the association; or
(2) attorney's fees incurred by the association solely associated with fines assessed by the association.
I think it is unreasonable to have to hire a lawyer anytime we need to interpret our CCR's. The majority of the population are not lawyers and if the documents are written so poorly that only lawyers can interpret their meaning, then it won't be long before lawyers will be the only ones who can own a home. How can we be expected to abide by a document if it is only understood by the lawyers that wrote them? What if there is a different interpretation based on who reads it? Who's is the correct interpretation?
All I have ever wanted was to live in my home in peace. That won't happen while living in a HOA. There is some desperate need to control everything.
As far as I know, this is still America and I still have the right to publish what I believe to be true.
When speaking of libel, it must be able to be proven that my statements are factually untrue and that having proven that, my statements caused anyone a loss of business. If that can't be proven, then I shouldn't be threatened with a lawsuit.
If I want to write an article about anything in my neighborhood that is disturbing my well being, I will continue to do so. No one owns any rights to my ability to speak my mind!
I do not see how these people sleep at night knowing they have profited by destroying another fellow human being.
There are another 30 houses I found out tonight by my builder. You should have sseen them back and front... second story decks falling off, mold growning it was just awful and not one in Houston will stand up and be counted. Everyone is afraid.
...But will they do anything to him we have convicted felon Norman Chapa our head of warranty walking around a free man you can pull up his name in Houston Chronicle charged pled guilty and convicted awaiting sentencing last June...
I actually received a call on 9/5 from the Rockwall city attorney - Pete Eckert. He said they had been reviewing the CCR's when they plat more closely and have actually made them take some things out. He seemed aware of the big problems HOA's are creating. Of course, he saw that Principal Mgmt was trying to go around the property code and said we could always get a legal opinion. That is when I let him know we did not want to spend years in litigation and give up our life savings for this. I told him that we have been trying to get any agency we can, including our Texas legislators, to fix the problem. He started spouting off about we agreed to the covenants when we bought and I said the city was requiring all new subdivisions to create HOA's, so what real choice were we given for new homes, he got real quiet after that. I told him no one wants an HOA, no one shows up for the meetings, and we don't want another full time job with the HOA. He said he would still look at the issue some more.
I have attached the affidavit I filed against the illegal fining policy.
HOA's are nothing but a legal, financial and emotional liabilty for the homeowner.
I've written the OAG, FBI, Dr. Phil, Oprah, news8 investigates, all members of the legislature in the business & industry committee, the intergovernmental relations and all who represent my district, the City of Rockwall mayor and all city council members. The only responses I've received was the blow off response from the OAG and the City of Rockwall mayor said he would have the county attorney look into it.
We had the dog and pony show, aka 3rd try for a quorum at our annual meeting last night.
Our illegal voting for an amendment and new board member consisted of a motion, a second, and then asking ayes or nays of the members for the votes. Nothing in writing. Just the voice vote. Dontcha love it!
I brought up that the new fining schedule was a direct attempt to circumvent property code 209.009. The response was they had the attorneys look everything over and they were not doing anything wrong.
Toward the end of the meeting, Principal management is proposing another amendment to be voted on in the next meeting. In order to extort more money out of the homeowners, they want to add an amendment allowing the attorney and management company ONLY to sign off on moving forward on "collections", absolving the board from being "responsible" for the extortion. There is a fear from the board there might be retaliation if the homeowner knew they signed off on the extortion, ya think! In other words, Principal Management wants us to vote to allow them to abuse us even more!
I was so disgusted when I got my response from the OAG, I sent this e-mail, I doubt I get a response to this one.
-----Original Message-----
From: McCorkle, Amy
Sent: Friday, July 20, 2007 5:04 PM
To: Greg Abbott - Texas Attorney General
Cc: HOAs 'TheNationalHAGS
Subject: FW: Please investigate foreclosure scam by PrincipalManagement
I'm also sick and tired of the HOA non-profit corporation being referred to as a private contractual agreement and all the offices that are supposed to protect us from these fraudulent contracts keep allowing these "corporations" to take advantage of homeowners.
I did not give up my rights just because I purchased a house.
What part was missed about Principal Management GOING AROUND SB507 and forcing our payments to be applied to FINES first? That just allows them free reign to make up anything they want and fine us for it, they don't have to PROVE anything, just say we have a violation. What if we don't agree we have a violation, what then? You've just allowed them to steal our home, and not for fines by this point, it's because now we haven't paid our DUES, we just paid our FINES instead. THIS IS THE DEFINITION OF EXTORTION. It's a wonderful scam that this office cannot say it doesn't know about.
If this office is supposed to "protect consumers from fraudulent or deceptive business practices" then why is this particular practice allowed? Following the flawed logic, since I am now living in a corporation, I SHOULD be protected from this "corporations" deceptive business practices of applying dues payments to fines.
At what point WILL this office finally get involved in this extortion scam? Do people have to start getting killed first? Why should I have to become bankrupt and homeless to fight this scam? Since I will have to help and protect myself, because no public office will get involved to protect us, I will defend my property from these greedy, home-stealing vultures at all costs, to the death if need be.
I received a response from the Texas Attorney Generals Office. Once again, we have been abandoned and left to fend for ourselves as best we can. I am astounded that every agency we go to blows us off. Here is the e-mail from the OAG.
-----Original Message-----
From: Public Information [mailto:cac@oag.state.tx.us]
Sent: Friday, July 20, 2007 3:20 PM
To: McCorkle, Amy
Subject: Re: Please investigate foreclosure scam by Principal Management
Dear Ms. McCorkle:
Thank you for your recent email. We appreciate your contacting the Office of the Attorney General.
While the Office of the Attorney General works to protect consumers from fraudulent or deceptive business practices, under Texas law we are not permitted to intervene in private contractual disputes or litigation. For this reason, the administrative policies and procedures of property owners associations are not subject to review by this office.
However, the Texas Residential Property Owners Protection Act (SB 507), gives homeowners certain rights and protections when dealing with property owners' associations.
Under this law, a property owners' association may not foreclose on a lien when the debt owed consists solely of fines assessed by the association or attorneys fees associated with those fines. The association must give written notice before suspending a homeowner's right to use common areas, assessing charges for property damage, or assessing a fine for violation of association rules. In most circumstances, the owner has the right to request a hearing on the matter, and must be given a reasonable amount of time to fix the violation. If an association forecloses on a property and sells it at auction, the former owner has 180 days to reclaim the property by repaying outstanding debts, fines, and costs. After an auction sale, the property may not be resold until the 180-day period has expired.
You can access this statute on the Texas Legislature Online website at www.capitol.state.tx.us. For additional information about Texas statutes, you may wish to contact the Texas State Law Library. The Library, which houses all state codes and statutes, offers services that include database searching, photocopying and faxing for individuals requesting information. The Texas State Law Library can be reached at:
Texas State Law Library
Post Office Box 12367
Austin, TX 78711
(512) 463-1722
www.sll.state.tx.us
You may wish to discuss this matter with a private attorney. The Lawyer Referral Service of the State Bar of Texas can assist you in contacting an attorney in Texas with relevant expertise. The Lawyer Referral Service can be reached at (800) 252-9690.
Again, thank you for writing. Please feel free to contact the Office of the Attorney General if we may be of further assistance.
Sincerely,
Donna Lee
Public Information & Assistance
Office of the Attorney General of Texas
Here is a copy of the illegal foreclosure scam documents we received.
AHRC Response
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In addition, please gather all the articles and information on Senator John Carona and send it to the FBI , DOJ, Government Oversight Comittee - Henry Waxman - chair, the Texas Legislators and request an investigation on Legislative, Judicial and Corporate fraud (including mail fraud) and racketeering by Senator Carona and CAI associates.
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