Jonathan Betz reports
JUSTIN, Texas - While homeowners' associations have been a lightning bolt of controversy in Texas, the push for reform has been pushed back by the Texas Legislature.
"The issue isn't going away," said Rep. Burt Solomons.
The Carrollton Republican introduced legislation in the last session aimed at reining in HOAs. The bill failed to come up for a vote in the Senate.
"We intend to continue fighting," he said. "It's gotten out of control and it's very hard to rein them in."
The Dutschke family learned that the hard way.
They bought their home in the Harriet Creek Ranch neighborhood in Justin nearly five years ago and were diligent about paying the quarterly association dues. But, a few months ago, Tera Dutschke lost her job as an administrative assistant and they fell behind on payments.
"I'm going to lose what was my dream as a little girl," Tera Dutschke said through tears.
A few weeks ago, the family got a notice that their HOA was going to foreclose on their home and auction it off because of $1,000 in back dues and fees.
"First off, I thought this is unreal," said Todd Dutschke, Tera's husband. "They can't do that."
However, in Texas, HOAs can. Homes foreclosed by HOAs sometimes dominate local auction sales.
By May of this year, foreclosure listings showed 1,000 homes in North Texas had been foreclosed on by HOAs, which was up nearly three percent over the year before.
This year, the state legislature considered a plan to reign in HOAs by forcing a judge to decide whether a home should be auctioned.At the last minute, the bill failed.
"They can declare you owe them money, whether you owe it or not," said Matt Scott, a Rockwall city council member. "And then they can take your property to the courthouse steps and sell it."
After fighting his own neighborhood association, Scott has been critical of HOAs and has worked with lawmakers to limit their power.
"They get to write the rules," he said. "They get to be the judge, the jury, the executioner."
Lawmakers say there are 30,000 homeowners associations in Texas, which has only 5,000 towns.
"You have entities that have more power than any city council," Scott said. "More power than any city government with no checks, no balances, no accountability, no transparency, no openness."
Supporters argue foreclosure power is a needed tool to make sure everyone pays the dues that benefit the entire neighborhood.
Associa manages the Dutschke's HOA and hundreds of others across the country. The Dallas-based company doesn't have a blanket policy concerning foreclosures. Instead, it allows each of its individual boards to decide whether to seize a property, a process which can take weeks.
"We don't have a standard policy that says after 'X' date or 'X' amount of money we will foreclose," said Carolyn Cummins, the company's spokeswoman. "It's up to each association to decide how far they want to go with that."
She pointed out that in the down economy, many people have become delinquent on their dues, making it difficult for associations to effectively manage properties.
"Foreclosure would happen as a very last resort," Cummins said.
The Dutschkes said they feared they could become homeless by Tuesday; but at the last minute, the board pulled the home off the auction block.
"Give somebody a chance that's struggling with something like this," Tera Dutschke said. "Instead of just saying, 'We're done with you. We're taking your house. Get out on the streets.'"