A group of residents of the West Oaks Estates subdivision in San Antonio, Texas are fighting back against what they believe is an unmeritorious attack by their homeowners association, and the builder/developer who controls the HOA. In a counter-suit filed in Bexar County District Court in San Antonio, Texas, the residents have accused the West Oak Estates HOA, Inc., and McMillin Development of breach of contract, real estate fruad, violations of the covenants, and conversion.
The counter-suit, which was filed in response to a series of suits initiated by the builder and HOA against 19 families who purchased their properties in the subdivision PRIOR TO the time that the builder recorded the covenants/restrictions. In the original suit the HOA and builder seek a judicial declaration that the properties are subject to the declaration of covenants and restrictions("CCRs") and to mandatory membership, despite the fact that the builder dropped the ball in timely filing the CCRs with respect to the residents' particular unit of the subdivision.
In the counter-suit, the residents deny the applicability of the restrictive covenants to their properties. In addition, they have alleged that membership in the HOA is not mandatory for them. In support of that argument, the residents have argued that the law in Texas, and even before Texas or the United States were established, provides that a covenant does not run with the land unless it "touches and concerns the land." It is clear from records recorded with the Bexar County Clerk that the restrictive covenants applicable to the West Oaks Estates HOA were not filed until AFTER each of the Counter-Plaintiffs purchased their properties.
The residents are represented by San Antonio attorney Trey Wilson, who has handled HOA litigation before both on behalf of and against homeowners associations. Wilson maintains that the West Oaks Estates HOA is not a proper Plaintiff in the lawsuit because there is no membership in the HOA by his clients. "Restrictive Covenants are treated by Courts as contracts, and since it is undisputed that my clients are not members of the HOA, there is no contractual privity between them and the HOA which would allow the HOA to bring this suit," said Wilson.
There is currently no trial date in the case.
Attorney Trey Wilson - RL Wilson Law
Showing posts with label HOA Lawsuit. Show all posts
Showing posts with label HOA Lawsuit. Show all posts
07 January 2009
New York Attorney General's Open Letter About Homeowners Associations -- Though Not Controlling In Texas, Interesting Nonetheless
HOW TO HANDLE PROBLEMS WITH YOUR HOMEOWNERS ASSOCIATION
Members of homeowners associations who are unhappy with how their association is acting (or not acting) often do not know what they can do. This paper is designed to tell such homeowners about some of their rights. In most cases there is no government agency that can help unhappy owners who are having problems with their homeowners association (HOA). The Attorney General's office regulates only the offer and sale of real estate securities (which includes interests in HOAs). It generally does not become involved in owners’ problems with boards of directors after the sponsor is no longer in control of the board. However, this office may be able to help you if the sponsor of the HOA is not keeping the commitments which it
made in the offering plan.
As you may know, a homeowners association is an organization established to govern a private community. Typically it owns and manages some common property for owners of private houses or condominium units. By buying a lot and/or home, an owner automatically becomes a member of the HOA of which it is a part. Before offering to sell memberships, a sponsor must file an offering plan with the Attorney General if sales of individual homes, lots or condo units are involved, unless it is exempted by law or regulation.
Most HOAs are corporations established under the Not-for-Profit Corporation
Law. An HOA is similar to other corporations -- it is governed by a board of directors elected by the members and a set of rules called by-laws. Books and records of financial transactions must be kept, taxes paid, and certain services provided to members. Usually the board has an annual budget prepared to estimate expenses, and then assesses each member a share of the costs.
HOAs vary greatly in the services which they provide. The developer establishes the scope of the association initially by setting out the services and expenses
in the association's budget. The declaration provides the means by which the association can enforce the members' obligations and the by-laws set forth the procedures for running the association. Generally, the developer controls the association at first and relinquishes control to the individual owners some years later.
The primary purpose of the association is to protect and preserve the value of the privately and commonly used property. In furtherance of that goal there may be
restrictions concerning pets; requirements as to fence height; or limitations on the number of cars allowed in the driveways. These rules often conflict with the desires of an individual owner but exist for the general good of the entire community. In addition, the association may have the responsibility to repair and maintain portions of the community, such as roads, roofs, and recreation facilities.
The individual owner in a homeowners association has the opportunity to become involved and participate in the on-going affairs of the community, and the
responsibility to assure that the association's actions conform to the by-laws and
declaration.
Typical Problems
Perhaps your HOA seems dormant -- you never receive notice of meetings, nor are you given financial statements which explain how the assessments you pay are being spent. Perhaps repairs are neglected and snow not removed as quickly as you
expect. Or a nuisance created by your neighbor is allowed to continue. Maybe one owner is allowed to build a deck and another is refused permission to do the same thing. These problems may arise while the association is still under the developer's
control. Be aware that the HOA is an independent body whose functions must not be
merged with the corporate functions of the developer. The developer creates and controls the association initially, but has a duty to protect the investment of the members and to respond to the needs of the association with a sense of fairness and good faith. From the time of the first closing with a member, the developer must abide by the terms of the offering plan, the by-laws of the association and the declaration in the same way that a later independent board must.
Get the Facts
The way to begin dealing with your problems with the board is to understand what rights you have. There are two kinds of research to do.
A. Check the documents for your HOA -- the declaration, certificate of incorporation, and by-laws. Copies of these document should be available from the board of directors or developer; a copy of the declaration and by-laws is in your offering plan.
These documents should include information on:
. what the HOA is responsible for
. how the declaration can be amended (including percentage required)
. how members of the board of directors are elected
. how members of the board can be removed
. the powers and duties of the board of directors
. how annual owner meetings are called
. how special meetings are called
. what remedies exist when a homeowner defaults on his or her obligations including maintenance charges.
B. Look at the Not-for-Profit Corporation Law, the New York State law which
governs the establishment of most homeowners associations. The decisions made by
courts in cases involving the law are the case law which interprets the statute.
The Not-for-Profit Corporation Law (NPCL) is published as volume 37 of McKinney's Consolidated Laws of New York Annotated ("McKinney's") which can be found in law libraries, many lawyers' offices, and in certain public libraries. Included in volume 37 are brief descriptions of case decisions. Important provisions of the NPCL and the sections in which they are found, include the following:
An HOA may have different classes of members. NPCL §601.
By-laws may be adopted, amended or repealed by the members with the appropriate vote, as provided in the by-laws. NPCL §602.
A meeting of the members is to be held annually. NPCL §603.
Members may call special meetings, as authorized in the certificate of
incorporation or by-laws, or if at least 10 percent of the members wish to do
so. NPCL §603.
Directors may be elected at a special meeting. NPCL §604.
Proxies (authorizing another member to vote for you) are permitted subject
to provision in the by laws or certificate of incorporation. NPCL §609.
Members may request that elections be supervised by an inspector. NPCL §610.
The right to vote may be limited by the certificate of incorporation or by-laws.
(For example, there may be no right to vote until the developer gives up
control.) NPCL §612.
Action may be taken on written consent of members without a meeting.
NPCL §614.
Members may demand to see the corporate books and records of accounts, minutes of meetings, and a list of members. NPCL §621.
A derivative action may be brought by five percent or more of the members of the corporation. NPCL §623.
Directors may be removed with or without cause, as determined by the certificate of incorporation and by-laws. NPCL §706.
Unless restricted by the certificate of incorporation or by-laws the board of
directors may take action without holding a meeting if all members of the
board consent in writing to the action. NPCL §708.
Certain actions by a director or officer constitute a conflict of interest, and
may be void or voidable if no disclosure was made. NPCL §715.
Directors and officers must act in good faith and with reasonable diligence,
care and skill. NPCL §717.
Directors and officers may be sued for misconduct. NPCL §720.
Resolving the Problem: First Approach
If the board of directors is not complying with its own certificate of incorporation, declaration or by-laws, you should point this out, in a tactful way, expressing the expectation that the matter will be corrected. Sometimes this is all that is needed to solve a problem. If a simple oral request to an officer of the board fails, you can write a letter. It should be factual, brief and not hostile. Keep copies of any letters that you send, and notes of telephone conversations (the date, time, who called whom, and the gist of the discussion) in case the matter is not quickly resolved. An attempt to influence the board is always more persuasive if it is presented by a significant number of members. If your problem is one that others are affected by, it is worth organizing the other members. If you do, and the attempt to change the situation is not successful, the organized group can always seek to elect new directors at the next annual meeting.
Retaining a Lawyer
If your efforts to resolve your problems with the board fail, you may want to
retain a private lawyer. The Attorney General's office cannot recommend private lawyers. However, a few points may be helpful.
. It is a good idea to select someone with experience in handling HOA problems. You
could begin looking for an attorney by talking with members in your or other HOAs and with attorneys in other specialty areas. If this fails, you may wish to contact a local Bar Association for referrals.
. Some lawyers will not charge for a single initial consultation or will charge only a minimal fee.
. Most lawyers will attempt to resolve any matter through negotiation before considering litigation, as litigation is costly and usually lengthy. Litigating against the board of an HOA, people with whom one lives, can also be very unpleasant.
In Conclusion
If serious problems arise, which the board is not addressing, such as a bank's
threatening to foreclose on a mortgage on the Association’s common property or a
developer's failing to pay common charges on unsold houses or lots, it is important to act swiftly. Often such problems can be resolved, relatively simply, if members organize and act right away. Remember that members of HOA boards are usually other owners who are serving without pay. They generally want to resolve problems and keep peace in the community.
Good luck!
Attorney General of the State of New York
Members of homeowners associations who are unhappy with how their association is acting (or not acting) often do not know what they can do. This paper is designed to tell such homeowners about some of their rights. In most cases there is no government agency that can help unhappy owners who are having problems with their homeowners association (HOA). The Attorney General's office regulates only the offer and sale of real estate securities (which includes interests in HOAs). It generally does not become involved in owners’ problems with boards of directors after the sponsor is no longer in control of the board. However, this office may be able to help you if the sponsor of the HOA is not keeping the commitments which it
made in the offering plan.
As you may know, a homeowners association is an organization established to govern a private community. Typically it owns and manages some common property for owners of private houses or condominium units. By buying a lot and/or home, an owner automatically becomes a member of the HOA of which it is a part. Before offering to sell memberships, a sponsor must file an offering plan with the Attorney General if sales of individual homes, lots or condo units are involved, unless it is exempted by law or regulation.
Most HOAs are corporations established under the Not-for-Profit Corporation
Law. An HOA is similar to other corporations -- it is governed by a board of directors elected by the members and a set of rules called by-laws. Books and records of financial transactions must be kept, taxes paid, and certain services provided to members. Usually the board has an annual budget prepared to estimate expenses, and then assesses each member a share of the costs.
HOAs vary greatly in the services which they provide. The developer establishes the scope of the association initially by setting out the services and expenses
in the association's budget. The declaration provides the means by which the association can enforce the members' obligations and the by-laws set forth the procedures for running the association. Generally, the developer controls the association at first and relinquishes control to the individual owners some years later.
The primary purpose of the association is to protect and preserve the value of the privately and commonly used property. In furtherance of that goal there may be
restrictions concerning pets; requirements as to fence height; or limitations on the number of cars allowed in the driveways. These rules often conflict with the desires of an individual owner but exist for the general good of the entire community. In addition, the association may have the responsibility to repair and maintain portions of the community, such as roads, roofs, and recreation facilities.
The individual owner in a homeowners association has the opportunity to become involved and participate in the on-going affairs of the community, and the
responsibility to assure that the association's actions conform to the by-laws and
declaration.
Typical Problems
Perhaps your HOA seems dormant -- you never receive notice of meetings, nor are you given financial statements which explain how the assessments you pay are being spent. Perhaps repairs are neglected and snow not removed as quickly as you
expect. Or a nuisance created by your neighbor is allowed to continue. Maybe one owner is allowed to build a deck and another is refused permission to do the same thing. These problems may arise while the association is still under the developer's
control. Be aware that the HOA is an independent body whose functions must not be
merged with the corporate functions of the developer. The developer creates and controls the association initially, but has a duty to protect the investment of the members and to respond to the needs of the association with a sense of fairness and good faith. From the time of the first closing with a member, the developer must abide by the terms of the offering plan, the by-laws of the association and the declaration in the same way that a later independent board must.
Get the Facts
The way to begin dealing with your problems with the board is to understand what rights you have. There are two kinds of research to do.
A. Check the documents for your HOA -- the declaration, certificate of incorporation, and by-laws. Copies of these document should be available from the board of directors or developer; a copy of the declaration and by-laws is in your offering plan.
These documents should include information on:
. what the HOA is responsible for
. how the declaration can be amended (including percentage required)
. how members of the board of directors are elected
. how members of the board can be removed
. the powers and duties of the board of directors
. how annual owner meetings are called
. how special meetings are called
. what remedies exist when a homeowner defaults on his or her obligations including maintenance charges.
B. Look at the Not-for-Profit Corporation Law, the New York State law which
governs the establishment of most homeowners associations. The decisions made by
courts in cases involving the law are the case law which interprets the statute.
The Not-for-Profit Corporation Law (NPCL) is published as volume 37 of McKinney's Consolidated Laws of New York Annotated ("McKinney's") which can be found in law libraries, many lawyers' offices, and in certain public libraries. Included in volume 37 are brief descriptions of case decisions. Important provisions of the NPCL and the sections in which they are found, include the following:
An HOA may have different classes of members. NPCL §601.
By-laws may be adopted, amended or repealed by the members with the appropriate vote, as provided in the by-laws. NPCL §602.
A meeting of the members is to be held annually. NPCL §603.
Members may call special meetings, as authorized in the certificate of
incorporation or by-laws, or if at least 10 percent of the members wish to do
so. NPCL §603.
Directors may be elected at a special meeting. NPCL §604.
Proxies (authorizing another member to vote for you) are permitted subject
to provision in the by laws or certificate of incorporation. NPCL §609.
Members may request that elections be supervised by an inspector. NPCL §610.
The right to vote may be limited by the certificate of incorporation or by-laws.
(For example, there may be no right to vote until the developer gives up
control.) NPCL §612.
Action may be taken on written consent of members without a meeting.
NPCL §614.
Members may demand to see the corporate books and records of accounts, minutes of meetings, and a list of members. NPCL §621.
A derivative action may be brought by five percent or more of the members of the corporation. NPCL §623.
Directors may be removed with or without cause, as determined by the certificate of incorporation and by-laws. NPCL §706.
Unless restricted by the certificate of incorporation or by-laws the board of
directors may take action without holding a meeting if all members of the
board consent in writing to the action. NPCL §708.
Certain actions by a director or officer constitute a conflict of interest, and
may be void or voidable if no disclosure was made. NPCL §715.
Directors and officers must act in good faith and with reasonable diligence,
care and skill. NPCL §717.
Directors and officers may be sued for misconduct. NPCL §720.
Resolving the Problem: First Approach
If the board of directors is not complying with its own certificate of incorporation, declaration or by-laws, you should point this out, in a tactful way, expressing the expectation that the matter will be corrected. Sometimes this is all that is needed to solve a problem. If a simple oral request to an officer of the board fails, you can write a letter. It should be factual, brief and not hostile. Keep copies of any letters that you send, and notes of telephone conversations (the date, time, who called whom, and the gist of the discussion) in case the matter is not quickly resolved. An attempt to influence the board is always more persuasive if it is presented by a significant number of members. If your problem is one that others are affected by, it is worth organizing the other members. If you do, and the attempt to change the situation is not successful, the organized group can always seek to elect new directors at the next annual meeting.
Retaining a Lawyer
If your efforts to resolve your problems with the board fail, you may want to
retain a private lawyer. The Attorney General's office cannot recommend private lawyers. However, a few points may be helpful.
. It is a good idea to select someone with experience in handling HOA problems. You
could begin looking for an attorney by talking with members in your or other HOAs and with attorneys in other specialty areas. If this fails, you may wish to contact a local Bar Association for referrals.
. Some lawyers will not charge for a single initial consultation or will charge only a minimal fee.
. Most lawyers will attempt to resolve any matter through negotiation before considering litigation, as litigation is costly and usually lengthy. Litigating against the board of an HOA, people with whom one lives, can also be very unpleasant.
In Conclusion
If serious problems arise, which the board is not addressing, such as a bank's
threatening to foreclose on a mortgage on the Association’s common property or a
developer's failing to pay common charges on unsold houses or lots, it is important to act swiftly. Often such problems can be resolved, relatively simply, if members organize and act right away. Remember that members of HOA boards are usually other owners who are serving without pay. They generally want to resolve problems and keep peace in the community.
Good luck!
Attorney General of the State of New York
29 December 2008
San Antonio HOA Sells Disabled Couple's Home
From WOAI.com
Every day is a struggle for Dan and Elaine Lambert. Dan has a traumatic brain injury and is partially paralyzed. He was struck by a train while working for the railroad. Since the accident, he's had two strokes and four heart attacks. Elaine says she went for six or seven weeks with open sores on her legs. She suffers from a disease that causes painful sores and swelling in her legs and has bouts of severe depression.
With their belongings already packed after getting an eviction notice from the new owner, Dan and Elaine each take some of the blame. The couple says the HOA dues were simply not a priority as they dealt with getting through their illnesses. They say certified letters from the HOA's attorney went unopened or thrown out because they thought it was junk mail.
Still, they think the HOA has gone too far. "There's no way in hell this association should do this to retired people or disabled people," Dan told us.
Homeowners' association usually don't do sell homes of those who owe them money. Instead, if you don't pay your dues, the association slaps a lien on your house. That way you have to pay up before you can sell it.
Instead filing a lien and leaving it at that, the Heritage Hills HOA took the unusual step of foreclosing and selling the house. The Lambert's home sold at a public auction on the steps of the Bexar County Courthouse. The house valued at $156,000 sold for only $2,200. That is the amount the Lamberts owed after late fees, attorneys fees and interest were added.
Tom Newton is the HOA attorney who sold the Lambert's home. "I'm not kicking anybody out of their house," he explained to the Trouble Shooters. "What I'm doing is holding them to the obligation they accepted when they bought the property."
Trouble Shooter Brian Collister asked Newton, "[Do] you feel comfortable kicking a disabled family out of their home for a few hundred dollars in HOA fees?"
Newton replied, "I feel comfortable in taking those steps necessary to enforce my client's legal rights, and if that means that ultimately somebody may go through this foreclosure process, it's unfortunate, but it is a consequence of their own making." During all of this, no one with the HOA or its attorney ever picked up the phone and called or came to the Lambert's home. They never simply knocked on the door and tried to talk to them about why they were not paying their fees.
Collister asked Newton about this; "Don't you think if you're going to take their home away from them you should at least go talk to them face to face?"
"No, I don't," Newton answered, "I don't, and I'll tell you there are some people out there who have whatever sort of issues they have. They become violent when you approach them about their shortcomings or failure to abide by their obligations, and I think it is a dangerous situation."
The Lambert's say they're not dangerous or violent. They're just surprised that a homeowners association can go so far because they owe so little. The HOA says it sent the Lamberts certified letters during the three years they did not pay their dues, and they had plenty of opportunities to pay up and keep their house.
Wednesday, the Lamberts sit down with the HOA and the investment company that bought the house. They're going to try and come up with a way where the Lamberts can keep their home. We'll let you know what happens.
Every day is a struggle for Dan and Elaine Lambert. Dan has a traumatic brain injury and is partially paralyzed. He was struck by a train while working for the railroad. Since the accident, he's had two strokes and four heart attacks. Elaine says she went for six or seven weeks with open sores on her legs. She suffers from a disease that causes painful sores and swelling in her legs and has bouts of severe depression.
With their belongings already packed after getting an eviction notice from the new owner, Dan and Elaine each take some of the blame. The couple says the HOA dues were simply not a priority as they dealt with getting through their illnesses. They say certified letters from the HOA's attorney went unopened or thrown out because they thought it was junk mail.
Still, they think the HOA has gone too far. "There's no way in hell this association should do this to retired people or disabled people," Dan told us.
Homeowners' association usually don't do sell homes of those who owe them money. Instead, if you don't pay your dues, the association slaps a lien on your house. That way you have to pay up before you can sell it.
Instead filing a lien and leaving it at that, the Heritage Hills HOA took the unusual step of foreclosing and selling the house. The Lambert's home sold at a public auction on the steps of the Bexar County Courthouse. The house valued at $156,000 sold for only $2,200. That is the amount the Lamberts owed after late fees, attorneys fees and interest were added.
Tom Newton is the HOA attorney who sold the Lambert's home. "I'm not kicking anybody out of their house," he explained to the Trouble Shooters. "What I'm doing is holding them to the obligation they accepted when they bought the property."
Trouble Shooter Brian Collister asked Newton, "[Do] you feel comfortable kicking a disabled family out of their home for a few hundred dollars in HOA fees?"
Newton replied, "I feel comfortable in taking those steps necessary to enforce my client's legal rights, and if that means that ultimately somebody may go through this foreclosure process, it's unfortunate, but it is a consequence of their own making." During all of this, no one with the HOA or its attorney ever picked up the phone and called or came to the Lambert's home. They never simply knocked on the door and tried to talk to them about why they were not paying their fees.
Collister asked Newton about this; "Don't you think if you're going to take their home away from them you should at least go talk to them face to face?"
"No, I don't," Newton answered, "I don't, and I'll tell you there are some people out there who have whatever sort of issues they have. They become violent when you approach them about their shortcomings or failure to abide by their obligations, and I think it is a dangerous situation."
The Lambert's say they're not dangerous or violent. They're just surprised that a homeowners association can go so far because they owe so little. The HOA says it sent the Lamberts certified letters during the three years they did not pay their dues, and they had plenty of opportunities to pay up and keep their house.
Wednesday, the Lamberts sit down with the HOA and the investment company that bought the house. They're going to try and come up with a way where the Lamberts can keep their home. We'll let you know what happens.
West Oaks Estates HOA and Builder File Suit Against Non-Member Residents Seeking to Compel Them to Join HOA
On November 16, 2008, the West Oak Estates Homeowners Assocaition, Inc. ("HOA"), and McMillin Texas Development (a susidiary of McMillian Homes) filed at least 15 lawsuits in Bexar County District Court against families residing in Unit 2 of San Antonio's West Oak Estates subdivision. The suits, which are identical, were served upon the residents in the days immediately proceeding Thanksgiving -- putting a damper on the holiday spirits of may of the residents of the West Oak Estates subdivision. San Antonio attorney Trey Wilson has been retained to represent 12 of the families, and several others who were not sued, but who are similarly-situated to the Defendants. Wilson has represented homeowners associations and those individuals adverse to them in a variety of lawsuits.
The West Oak Estates HOA lawsuit arises from the fact that the Defendant households are not members of the homeowners association because they purchased their homes prior to the time that McMillin annexed Unit 2 into the Restrictive Covenants. That is, McMillin sold at least 19 homes in the subdivision BEFORE it recorded its Declaration of Covenants, Codes and Restrictions ("CCRs") with the Bexar County Clerk. "Because these homes were sold prior to the developer recording the CCRs (on May 26, 2006), these properties are not burdened by the CCRs, and my clients are neither bound by the CCRs or subject to mandatory membership in the HOA" said Wilson. "it is unfortuante that the HOA and builder have resorted to litigation, as these type of suits generally result in discord between neighbors and a loss of tranquility and goodwill among neighbors." In 2007 Wilson filed suit in Medina County, Texas against the developers of the Valentine Ranch subdivision on grounds that their property owners association was not formed or incorporated until after many of that development's residents purchased their properties and began payment of POA dues and assessments. The 2007 lawsuit was settled at mediation, and resulted in the issuance of Amended CCRs, a Supplemental Declaration, and several changes in the composition of the POA Board.
McMillin recognized its error as far back as July 2006, and began a campaign of letter writing and negotiations seeking to recruit the non-members to voluntarily join the West Oak Estates HOA. When these negotiations failed, it resorted to litigation, and filed suit seeking to have the Court declare that the non-members are subject to the CCRs and subject to mandatory HOA membership. Although the HOA is a named Plaintiff in the suit, the association remains under developer control, and 2of its 3 Board Directors are McMillin employees. The other Board member is a subdivision resident who was appointed by McMillin. The HOA has claimed in the lawsuit that it is a "beneficiary of the contract bewteen Defendants and McMillin."
Wilson maintains that, in addition to several defenses to the builder and HOA's lawsuit, the non-members maintain several affirmative claims against both the HOA and the builder arising from broken promises, breach of the CCRs, and illegal collection of dues and assessments from the non-members. "These claims will be addressed by way of the non-members' counterclaims against the Plaintiffs, and a third-party claim against the HOA's management company."
More to follow as the suit progresses...
The West Oak Estates HOA lawsuit arises from the fact that the Defendant households are not members of the homeowners association because they purchased their homes prior to the time that McMillin annexed Unit 2 into the Restrictive Covenants. That is, McMillin sold at least 19 homes in the subdivision BEFORE it recorded its Declaration of Covenants, Codes and Restrictions ("CCRs") with the Bexar County Clerk. "Because these homes were sold prior to the developer recording the CCRs (on May 26, 2006), these properties are not burdened by the CCRs, and my clients are neither bound by the CCRs or subject to mandatory membership in the HOA" said Wilson. "it is unfortuante that the HOA and builder have resorted to litigation, as these type of suits generally result in discord between neighbors and a loss of tranquility and goodwill among neighbors." In 2007 Wilson filed suit in Medina County, Texas against the developers of the Valentine Ranch subdivision on grounds that their property owners association was not formed or incorporated until after many of that development's residents purchased their properties and began payment of POA dues and assessments. The 2007 lawsuit was settled at mediation, and resulted in the issuance of Amended CCRs, a Supplemental Declaration, and several changes in the composition of the POA Board.
McMillin recognized its error as far back as July 2006, and began a campaign of letter writing and negotiations seeking to recruit the non-members to voluntarily join the West Oak Estates HOA. When these negotiations failed, it resorted to litigation, and filed suit seeking to have the Court declare that the non-members are subject to the CCRs and subject to mandatory HOA membership. Although the HOA is a named Plaintiff in the suit, the association remains under developer control, and 2of its 3 Board Directors are McMillin employees. The other Board member is a subdivision resident who was appointed by McMillin. The HOA has claimed in the lawsuit that it is a "beneficiary of the contract bewteen Defendants and McMillin."
Wilson maintains that, in addition to several defenses to the builder and HOA's lawsuit, the non-members maintain several affirmative claims against both the HOA and the builder arising from broken promises, breach of the CCRs, and illegal collection of dues and assessments from the non-members. "These claims will be addressed by way of the non-members' counterclaims against the Plaintiffs, and a third-party claim against the HOA's management company."
More to follow as the suit progresses...
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Trey Wilson --Named By Scene in SA Magazine As One of San Antonio's Best Real Estate Litigation Attorneys -- September 2008 -- As voted on by peers