SOUTHMEADOW’S $315 FORECLOSURE FIGHT Why does the West Airport Homeowners Association take up a half page of its newsletter each month with lists of fees for various legal costs associated with policing deed restriction and other violations? Because fee collection and enforcement appears to be a major focus of the organization. An attorney for Southmeadow resident William Castellon claims the HOA — which is operated by a company called Randall Management — has run up $75,000 in legal fees fighting lawsuits over a $315 annual maintenance fee it claims Castellon failed to pay, though Castellon says he did. (A second check sent by Castellon for the same payment was returned.) The HOA filed suit against Castellon, seeking to foreclose on his home near West Airport and South Gessner. Last fall, after Castellon sued back, a jury ruled in his favor and awarded him more than $40,000. But the HOA is now attempting to reverse the decision. Fox 26 reporter Randy Wallace’s calls to the HOA’s law firm, Gammon & Associates, were not returned. [MyFox Houston]
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one of the lawyers of the firm also on the HOA board?
Good for him.
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I have some rental properties that have HOA fees and from time to time they don’t bill my property management company directly (they’ll try to send to me personally — and I toss them). Soon I get all sorts of nasty threating letters because they don’t get paid on time (or at all).
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I’ll call and tell them they’re note sending the bill to the right person/address. They say they have to be sent to the ‘owner’. I say I’ve never even seen the property and that a management company takes care of all that. They say I have to ‘fax’ some letter to them to change the address. I hear ‘fax’, laugh, and hang up.
SL sez “one of the lawyers of the firm also on the HOA board?”
Probably not on the HOA board. There are some predatory private law “firms” who specialize in collecting HOA fees by employeeing arguably unscrupulous property management companies to collect not just the HOA fees, but also *attorneys* fees. This happens when there are some *really* nasty people on the HOA Board.
Because of VERY bad Texas law, a verdict for the homeowner is rare. The HOA may very well win on appeal. And *if* they settle out of court, we’ll never know since there is always privacy clause to keep that information secret.
@spritely “Because of VERY bad understanding of contract law, a verdict for an ignorant homeowner is rare.”
FIFY
Haha minions – I mock your slavery as I sit in my HOA-free inner city home (which I can paint any damn color I choose). I’ll choose freedom over aesthetics any day.
People, as someone who has lived with HOAS enforcing deed restrictions and no restrictions inside the loop; I vote for H0AS. BETTER THAN LIVING NEXT TO A PROPERTY OWNED BY A FOTEH.
miss_msry: Have you tried buying, or getting together a group of investors to buy, any of the Foteh owned multifamiles? Have you contacted them to see what they’d sell for (anyone will sell any property for a price)?
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I’m not a ‘slum’ fan, but you can’t blame Foteh. He is making money by keeping them full. How? By *providing a place to live that people are willing to pay for*. You (and I) might not like the property and sure as hell wouldn’t live there, but obviously some people are willing. If its due to lack of better options, that means his is better than others.
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The best way to get rid of a ‘slum’ is to buy a ‘slum’. Then you can spend $$ to make it as pretty as you like. New siding, windows, roof, landscaping, paint, etc. Sure it might not be profitable, but you’ll have perfect tenant neighbors and a cute property to drive by.
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Put yourself in his shoes. What would you do? Fix it up? That would obviously be a good thing to do. Then raise the rent I’d assume to make up for those costs (since spending extra money for the same rent seems odd)? So now those people living there will have to move out (since if they could afford something nicer and more expensive, they would have already made that choice). So you get better renters (good) but kinda hosed whoever was living there. And hey, that trade-off makes it better for the neighborhood *no doubt*. Just don’t try to improve (or have/force/campaign to have done) the property and claim your trying to help the (existing) tenants. They’ve already made their choice (by voting with their rental dollars) on where they want to live vs. what they want to pay.
Cody,
I am not willing to accept your suggestion that people are voting with their rental dollars to raise their families in slum conditions. Such assumes these people have a real choice.
Mel: What’s not to accept? They absolutely have a choice.
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The only argument for them not having a choice is they don’t have a choice insomuch as their income (what they’re able/willing to spend on rent) doesn’t ALLOW for something nicer. There is a difference between means and choice.
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If what they were living in was made nicer, it would also be made more expensive, causing them to have to move to somewhere else that sucked.
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Face it, things range from bad to good and have pricing associated with that range. People make bad assets good IN ORDER TO GET MORE from the asset. If someone lives in a dump that charges $500/month because that’s all they can afford, and it’s made nicer (to your standards), do you think the rent stays at $500/month? If it gets more expensive, what happens to the person that can’t pay anymore?
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Perhaps the people living there live there because it’s cheap and they like the location. Montrose is expensive. People pay the same amount for something kinda dumpy in Montrose rather than paying the same for something nice in BFE.
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THAT = CHOICE
I am not willing to accept your suggestion that people are voting with their rental dollars to raise their families in slum conditions. Such assumes these people have a real choice.
Metro does exist and rent goes alot further some places over others. Everyone that rents makes a choice, even if they don’t think they have. The great thing is that nowadays with the internet, choices don’t have to be based on such limited knowledge if you have the motivation.
I realize that HOAs need to enforce deed restrictions, but spending $75K on a $315 (supposedly) missed payment? Clearly, there’s an agenda here that has nothing to do with the good of the neighborhood. I’d hate to see my HOA dues be spent on what appears to be some sort of vendetta.
#11..KC
I agree that it does not seem smart to chase this guy for $315 but come on….we all know there is more to this story.
I’m surprised that Randy Wallace didn’t research it a bit more before he reported.
I don’t know the story but a quick look at public records will show that this thing started in 2008. So, yes, there has to be more.
You know you’re both right to some degree. Like in all things economic, rampant capitalism and business just for the sake of raw profit eats little people alive. But no business would occur without the prospect of real profit.
However, in real estate, as in all fields of business, there is always a human, ethical side of things that should be considered and weighed along with profitability. That’s how things get done in the modern business world.
Let me guess Cody, residential landlord?
Guys:
Turn the table around and have a friendly accounting firm known by one of the residents to perform an independent audit for the last 3-years. Its hard being agressive with your business model if you are constantly on the front lines defending your financials with an independent accounting firm in Houston.
Here’s a little lesson in HOA rules for all of you conspiracy theorists. Let’s start with lesson number 1: How to Avoid Foreclosure at the Hands of your HOA or its Property Management Company.
Part I: Abide by the rules you agreed to when, at closing, you signed the contract stating you would.
Part II: Pay your dues (refer to Part I describing them).
Part III: If you disagree with Part I or Part II, do not purchase the property.
Our next lesson is titled Oh Crap, the HOA Foreclosed on Me.
Part I: HOAs can only collect their dues in the event of foreclosure; the lawyers and [soon-to-be-former] property owners split the rest (Extra Credit: guess which side’s split gets better as the case drags on).
Part II: HOAs don’t usually* sue after year 1, year 2 or year 3 of delinquency, but at year 4 the statute of limitations prevents them from collecting so they MUST sue in order to protect their ability to enforce restrictions and collect dues from the normal residents.
*if you are an especially annoying neighbor you may get sued after year 1 of delinquency but that’s totally legal
Part III: The ability of the HOA to act to protect its homeowners is a product of our legal system, which means they must pursue proper, normal, AVAILABLE-TO-ANYONE channels to take any legal action.
Part IV: This could have all been avoided by you paying your measley dues or being a good neighbor or both.
Please join us next month when we explore laziness, apathy and the definition of RTFM.
Here’s a little lesson in HOA rules for all of you conspiracy theorists.
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Here’s a little lesson for you. Check the Texas Property Code provisions regarding HOAs and their right to foreclose. Changes were made along the way to keep all these “honest” HOAs and their boards, and the board’s attorneys, which usually is a “friend” of someone on the board, from pulling all sorts of shenanigans to rip individual homeowners off. Which quite a few of the “honest” HOAs do.
The best rule of thumb is to not buy anything where the HOA has the right to foreclose over delinquent HOA fees. Even with the changes, it’s an open invitation to being ripped off. And possibly losing your home when the HOA claims you didn’t pay the dues and they refuse the payment claiming there are now attorney’s fees. They can only foreclose for the fees. But the courts for some reason overlook the matter of the refusal of the payment because of attorney’s fees.
One thing the legislature did do was change the “notification” provisions. The HOA now has to notify the mortgagee. Which of course then files for foreclosure under its superior lien. Which at least prevents a “friend” of a board member or a “friend” of the attorney representing the HOA from rushing down to the courthouse knowing how much the lien is for, and how much remains on the mortgagor’s note, and managing to put in the “winning bid.”
Some of you really need to wake up to the reality of how corrupt everything is.
From miss_msry:
People, as someone who has lived with HOAS enforcing deed restrictions and no restrictions inside the loop; I vote for H0AS. BETTER THAN LIVING NEXT TO A PROPERTY OWNED BY A FOTEH.
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Was the property there when you bought your home?
Amazing how people fall victim to Southampton Syndrome and believe they can just “make it all go away” when what’s next door or across the street, or what may eventually go up next door or across the stret, becomes “irritating.”
How about doing some “due diligence” when buying. Or at least paying attention to what’s next door or across the street?
property owner /landlord & not paying HOA fees == SLUMLORD
Mystery MATT,
‘Was the property there when you bought your home?’
Matt, yes it was nextdoor, but when we purchased our home 22 years ago from Mayor Whitmire, the property was being extremely well-maintained.
From miss_msry:
Mystery MATT,
‘Was the property there when you bought your home?’
Matt, yes it was nextdoor, but when we purchased our home 22 years ago from Mayor Whitmire, the property was being extremely well-maintained.
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And you assumed it would always be maintained? In a perfect world, there would just be single-family homes in all residential neighborhoods. It is not a perfect world. Particularly in Montrose.
Of course in some residential neighborhods like Fondren Southwest and Lakeside the apartment complexes were put on the major thoroughfares and there were just single-family homes in the neighborhoods. And everyone assumed they would also be maintained. They assumed wrong. The developers used HUD money. And when occupany fell below a certain level, Section 8 kicked in. And the racism began. And suddenly, well, there went the neighborhoods.
Zoning might have prevented a lot of disasters. Unfortunately it’s alittle late for zoning. And zoning by ordinance will never stand up in courts because it violates the city charter. As no doubt everyone will discover this year with regard to 1717 Bissonnet. Unless some manage to buy some judges.
So buyers should look at what’s there. And not assume it will always be there. And think about what might be there in 10 years.
I used to work IT for an HOA management company, have quite a bit of exposure to the industry. It is typically the self-managed boards where the most underhanded stuff goes on. I can recall numerous cases where that company was hired specifically because the previous board had abused their power and homeowners then elected to hire a management company to ensure that did not happen again. A major part of an HOA managers job is to ensure that the board members follow the law and to sway them from doing things which are in their personal interest but not in the best interest of the association at large.
A management company ‘returning a check’ because of legal fees sounds odd to me. Typically what would happen is that the payment would be applied to any outstanding fees, then to the original dues. The only time anyone can ever get to foreclosure is by stubborn refusal to pay their fees, typically late fees or deed violation fees, their account would have had to be delinquent for an extended period of time before the board takes any legal action which would result in legal fees.