By David Wilfong
The participants in a lawsuit of HOA rights have agreed to a full injunction hearing in the Rockwall County Court at Law to be held on May 2 at 1:30 p.m.
“I think that is a reasonable course of action and the plaintiffs agreed to it,” said Matt Scott, who has brought the suit against the Oaks of Buffalo Way HOA. “The HOA was supposed to — and I think will — postpone the annual meeting until after the injunction hearing.”
The lawsuit stems from a controversial move by the HOA to levy a “special assessment” on its residents for the upgrade of an asphalt walking trail in the community, to be replaced by concrete.
The special assessment is $1,500 while the residents’ normal HOA dues are slightly less than $1,000 per year. With the upcoming annual homeowners meeting, the HOA board voted 5-4 to suspend the voting rights of members who had not paid the special assessment. This move drove Scott, who is also a member of the Rockwall City Council, to file suit against his HOA.
“When so many people have made every effort to comply with this board’s demands, only to have a majority of the board turn around and try to take away their right to vote — which they have no authority to do — it is not only sad, it is deplorable,” Scott commented. “And to do so without even having the courage to vote on the record — they tried to strip these rights by secret ballot vote — tells me the majority of them know their actions are contrary to their powers and motivated by spite.
“No power the City of Rockwall possesses or exercises even comes close to this Draconian action. Even in annexations, people are given a lengthy period of time to prepare for the increased property tax burden. But to demand 150 percent of annual dues immediately, charge 18 percent interest after 30 days, and then try to strip people of their right to vote for new board members in 60 days, is unconscionable.
“There is no excuse or rationale compelling enough to justify the majority of the board’s actions. Those that reached out to the board and made payment arrangements extended an olive branch to the board; the board returned it to them charred to black.
“I should add, there are good people on this board who have been and are trying to do the right thing. But right now they are being outnumbered by a majority of the board. That majority is abusing the powers they have, and trying to exercise powers they do not have.”
Scott has been joined in the suit by a few of his neighbors, and even more signed a letter to the board asking that the suspension of votingg rights not be pursued.
HOA board members have deferred any comment to the media to their legal counsel, The Horton Law Firm, but in e-mails obtained by the Herald-Banner board member Sid Murphy asserts that the power to suspend votes is within the rights of the HOA.
“With regard to the Board’s ‘power,’ Article II, Section 3 of the Bylaws requires the Board to vote on whether to suspend voting rights,” Murphy wrote. “I do not see a section in the DCCRs that conflicts with this, and Mr. Scott’s email tends to confirm this.”
Board member Anthony Cox, also an attorney, Stated that he didn’t think the lawsuit would change much.
“I suppose I do not understand what you are trying to accomplish with a lawsuit,” Cox wrote. “The community voted for the special assessment. The vast majority have paid. Even if a court overturned the assessment due to some error, it is clear that the community would revote to impose the assessment. The obligation will not go away and cannot be avoided. It seems to me that the community ends up at the same place (i.e. a special assessment of $1,500 imposed that all lot owners must pay). So, help me understand. What it is that you want?”
Meanwhile, the Rockwall City Council has called for a public hearing regarding the powers and practices of HOAs to be held on June 9 at 6 p.m. Currently the council plans to hold the meeting in the city chambers, unless participation is high enough that the proceedings must be moved to The Center.
Scott had called for the city to look at HOAs prior to filing the lawsuit, referring to them as “little monsters” and explaining that they are in effect “mini-taxing agencies.”
“Because the City currently requires a developer to create an HOA for any subdivision that has common areas, the City has to take some ownership of the mess it has created,” Scott stated. “And because the City reviews DCCRs before we grant final approval of a subdivision, the City has the ability to take a step toward correcting the mess, at least for future communities.
“And that is why I asked the Rockwall City Council to hold a series of public hearings to discuss HOAs. My goal, and I believe the goal of the council (which approved the request unanimously) is to figure out what works well, what does not work well, then provide some uniformity in future DCCRs in communities that are approved in Rockwall.
“But what I don't want to happen is for these public hearings to become a forum for airing personal grievances that inevitably come along with HOA stories. I aired mine — rightly or wrongly — to explain why I feel reform is needed.
“Instead, I want to focus on what we, as a City, can do to provide some uniform provisions in future DCCRs that provide basic principles of fairness to those who live in HOA communities. If we can do that, it is my hope other communities already in existence might consider following suit voluntarily, in the hopes of avoiding conflict in the future.”
By David Wilfong
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