We Know the Day to Day Workings of Associations

Every day, you’re faced with dozens of decisions that impact the quality of your community. North Law, P.C. has a team of experienced and knowledgeable attorneys, paralegals and support staff available to counsel associations regarding the corporate, real estate and business matters that regularly arise.

The solid litigation background of the Firm provides us with unique insight and experience when counseling clients on community association issues. Many boards of director decisions require an understanding of the parameter of rights afforded to an association under the terms of its governing documents. Importantly, the Texas state legislature has, over the years, granted to you far greater legal rights than may be apparent from the face of your governing documents. Drawing from our expertise, our attorneys draft and modify both corporate and governing documents with an understanding of potential litigation issues and a current knowledge of new statutory law which affects you.

Understanding your objectives and creating a path through which your goals may be accomplished is an important part of our relationship with you.

We Speak Your Language

The team at North Law, P.C. is different. We make it easy for you to work with us because we know your business and speak your language. The following are just a few of the things that we do every day to help associations run more effectively:

• Interpreting governing documents: declarations of covenants, conditions, and restrictions, the articles of incorporation, and the bylaws of the association.
• Answering day to day questions regarding operational, governance, practical and legal issues.
• Reviewing and drafting contracts for the maintenance, repair, and operation of the community.
• Amending governing documents to eliminate obsolete provisions and to modernize your documents in order to conform to the current needs of your community.
• Insuring compliance with applicable federal laws (Fair Housing Act, Telecommunication Act, etc), as well as similar state and local statutes and ordinances.
• Assisting the board of directors on fiscal matters such as budgeting, service fees, special assessments, and establishing reserves.
• Providing legal counsel regarding board member fiduciary duties and safeguards to reduce your risk of liability.

Collections: We Make a Hard Job Easier

Maintenance assessments are the lifeblood of any community association. As such, timely collection of assessments is critical to the successful operation of your association. Owners who aren’t paying their share create ill-will and resentment among the other homeowners, deny the association the financial resources needed to keep up with routine maintenance and repairs, and prevent the establishment of a reserve account for improvements or replacements to the property.

They're Your Neighbors

We know that collecting delinquent assessments is a difficult job. After all, these delinquent owners are also your neighbors. You don’t want to confront people at the mailbox or the pool to pay their assessments. But managers and board members can’t ignore the problem.

With our experience in association law, we understand the mindset of delinquent homeowners. We know that, when it’s time to pay the bills, assessments are often low on the priority list. Our goal is to move assessments to the top of the priority list and to impress upon owners that paying assessments is critical to keeping their home.

Getting the Job Done

When it comes to collecting delinquent assessments, boards want quick, effective results and want to be kept informed. In short, you want results that you can measure. That’s where we work for you:

• Within 48 hours of receiving a new matter, we send a demand letter to the delinquent owner to begin the process of collecting the delinquent assessments.
• You receive monthly reports, free of charge, setting forth the status of all legal matters which we are handling. Of course, you are also welcome to call us anytime to get a verbal update as to the status of your association’s collection matters, again, free of charge.
• You receive, on a monthly basis, a free accounting report providing a detailed itemization of the total monies recovered from specific homeowners involved in the collection process. In essence, it’s a monthly report card so that you can determine how well we are collecting your delinquent accounts.
• We assist you with preventative measures such as establishing a written “collections policy” which clarifies your procedures and outlines the penalties and steps taken to recover delinquent assessments. Our experience has shown that a written policy reduces the number of delinquent homeowners.

Making it Affordable to the Association

Many associations are hesitant to aggressively pursue delinquent assessments because of the cost in legal fees. But we know that, by law, homeowners who fall behind in paying assessments must also pay all legal fees and costs necessary for collections. We recognize that community associations are, by their very nature, organizations which must exist and perform within the constraints of a limited annual budget. Yet, because the accomplishment of a legal objective can, at times, require a period of time before a final resolution is affected, a problem can arise if an Association is required to pay for the legal services before the result is obtained. In an effort to address this concern, under some of our billing arrangements, we allow you to postpone your payment of the legal fees invoiced until sums are recovered from the individual responsible for the debt. Here’s what that means to you:

• In most instances, you are not required to pay for the legal fees invoiced by us in collecting outstanding maintenance assessments until payments are collected from the debtor.
• The delay in performing a legal task that you may have experienced in the past should be reduced, and the likelihood of your objective being accomplished in a timely and cost effective matter is enhanced.
• Your community’s operating fund is not depleted by upfront legal costs; but, rather, payment of legal costs is more closely aligned to when you receive money from the collection process.
• You can retain more of your community funds and devote more of your budget towards projects and services which enhance your community.

Enforcing Your Collection Policy Through Common Respect

Our clients are generally pleased with the manner in which we treat homeowners who have failed to live up to the expectations established by their community. In short, we are dedicated to enforcing your policies through common respect. Here’s what that means to your homeowners:

• Clear Notice. Each letter sent to a homeowner sets forth, in plain terms, a detailed itemization of the amount owed or the specific action which must be accomplished, the time period for response before the next step in the legal process is taken, the legal activities which will occur if the homeowner fails to communicate, as well as the legal costs that will be incurred by the individual if the next step in the legal process is required.
• Payment Agreements. Every letter sent to a homeowner explains to the individual how they can remedy the situation, remove themselves from the legal process, and offers to them an opportunity to pay all costs owed to an association through a monthly payout agreement.
• Special Situations Addressed. Homeowners who have unique situations (i.e., fixed incomes, severe family illness, recent unemployment, etc.) are brought to the attention of the governing Board to allow them the opportunity to take into account their special situations in proposing solutions to these matters.
• Personal Involvement. If a homeowner has a dispute with regard to what they believe are the facts of their particular case, they are routinely invited to meet with the attorney handling their matter at our office so that they can review their written file as well as the backup documentation leading up to the dispute. These meetings with the homeowner are done free of charge in an effort to more effectively educate a homeowner regarding the facts of a matter and, hopefully, cause an efficient, cost effective resolution of the dispute.
• Homeowners are not “Nickeled and Dimed.” The amount set forth in the last correspondence received by a homeowner is, assuming the homeowner complies with the terms of their payment agreement, the total out of pocket cost to the homeowner regardless of the legal work required after a payout agreement is executed.

Covenant Enforcement : Where Do You Draw the Line

Covenant enforcement is one of the most difficult aspects of running a community association. As a board member or manager, you deal with both extremes: the community leaders who don’t believe in leniency, and the ones who think that even a friendly reminder encroaches on their freedom. As this type of law is all that we do, we have seen it all, and we know where and when you draw the line.

A Difficult Balance

We know that there are times when your duties as a board member are difficult to carry out because you’re not just a representative of the Association; rather, you are also a neighbor and friend to members of your community. You have a duty to reasonably enforce the covenants and its rules, and you don’t want to risk liability to the board, committee members, or to the association. Yet, you don’t want to make enemies either. It’s a difficult balance.

Taking Preventative Measures

Our approach begins with the idea that many legal disputes can be avoided all together. If you are experiencing enforcement problems, we work with you to explore the reasons and identify workable, practical, and lawful solutions. We offer a number of services aimed at helping you prevent costly legal disputes including:

• Reviewing your documents to ensure that your covenants, rules, and architectural guidelines and forms are clearly stated, legally enforceable, and consistent with legal and practical standards.
• Helping you draft architectural guidelines, procedures, and forms so that your association has the documentation necessary to enforce the covenants and the rules.
• Providing you with practical and proven tools to encourage voluntary compliance with your association’s documents and procedures.

Getting Results

We assist you with covenant and rule enforcement matters from start to finish.

• We will send a polite, but firm, demand letter to the delinquent homeowners explaining the violation as well as the steps necessary to correct the matter. Often, this is all that is required to solve the problem.
• We are experienced in mediation and other forms of Alternative Dispute Resolution (ADR). These methods can be faster and less expensive than litigation.
• If a demand letter or mediation doesn’t achieve compliance, we will advise as to when it’s time to go to court as well as the best strategy to employ.
• We offer free workshops and seminars for board members to help you achieve the difficult balance between too much and not enough enforcement. Upon your request, we attend board meetings to advise you on methods for handling challenging issues.

Making It Affordable For You

If the cost of legal services to obtain compliance was free, your decision to use legal action would be fairly easy to make. However, a number of associations are somewhat leery about using lawyers or court rooms to accomplish deed restriction compliance because, even if they recoup their legal costs in the long run, they have no way of determining their initial out of pocket cost. The question becomes: “Is it worth it to spend a lot in legal costs to obtain compliance in a single matter?”

In an attempt to address this concern, we offer a program for deed restriction enforcement which minimizes your upfront out of pocket legal costs to pursue deed restriction enforcement by postponing the payment of a portion of the legal fees invoiced until money is received from the homeowner who has failed to comply with the community’s deed restrictions. This fee arrangement enables you to implement an active, uniform enforcement program by minimizing your upfront cost to pursue compliance.

Knowledge of the upfront cost that you could pay to accomplish compliance allows you to more accurately forecast your annual legal fee budget. In addition, we have a greater incentive to obtain a quick and efficient resolution of the matter.

Benefiting From Our Knowledge

We know the law and the most persuasive arguments to use in court. When you’re faced with covenant or rule enforcement problems, call us, and we can attend your board meeting and discuss your options.

Whether you want to take the proper preventative measurements before enforcement becomes a problem, or if your association is already experiencing on-going problems with your covenants and rules, we have the know-how to help.

Covenant Enforcement : Where Do You Draw the Line

Effective governing documents (declaration, by laws, and articles of incorporation) are the foundation of any successful association. We offer a broad range of services to help your association evaluate your documents and determine whether amendments or revisions are necessary. If needed, we can work with you to prepare a revised set of governing documents for your community or tailor a specific limited amendment. We’ll even help you get the amended documents approved.

Why Fix What's Not Broken

Governing documents provide the framework for making any association work. The temptation for most boards is to keep the current documents as they are. But, poorly constructed documents can create big problems for any board including:

• Ambiguity. If aspects of your documents conflict, trying to understand and apply the information is difficult at best, and unlawful at worst.
• Liability. Most times, board members don’t know whether or not their documents sufficiently protect the Association, or themselves, from legal liability until a problem arises – and, then, it is often too late.
• Compliance. With the passage of new laws, your documents may not reflect changes in the law- meaning you will be in violation once they take effect.

Putting Your Documents in Order

From start to finish, we guide you through each step of putting your documents in order:

• Assessment. We make certain we understand your goal and objectives. Then, by undertaking a document review or legal audit, we determine what the association is currently working with, and what needs to be changed. We meet with the board to present our recommendations as to the scope and nature of the amendments necessary and to outline the avenues available to accomplish our recommendations as well as the board’s goals and objectives.
• Revision. Whether you elect to proceed with a single revision to one document or a complete amendment of all your governing documents, we focus on drafting practical, flexible documents tailored for your association.
• Approval. We understand the difficulty and importance of convincing owners to approve amendments to governing documents. We assist you by providing an explanation of the approval requirements necessary to accomplish the amendment, creating a form letter to owners and others detailing the major changes reflected in the amendment, and , preparing the proper consent forms and proxies that owners and others can use.

Taking the Next Step

We have the experience and expertise to guide your association and provide you with the counsel necessary to successfully complete the amendment process. Call us to find out more about our document amendment services or to schedule a meeting for us to meet with your board of directors to discuss your association’s goals and needs.

We Focus on Resolving the Problem

Taking anyone to court for any reason is difficult. When it comes to your neighbors and members of your homeowners association, a courtroom trial should be a last resort. But finding a win-win situation for all the parties involved can be very complicated. Conflicting agendas and stubborn posturing can make even the most reasonable board member feel trapped between competing interests. We know how to resolve disputes within your community without going to court and with the integrity of the board still intact.

Don't Get Stuck in the Middle

When neighborhood disputes erupt, often, the board is cast into the role of the “fall guy.” No matter what you do, what you say, or how you attempt to reach a resolution, someone is going to be unhappy. To make matters worse, neighborhood disputes have a way of snowballing. People, who have no interest in the matter, take sides, and, before you know it, your community is divided. It becomes political with the board becoming the target.

That’s when you call North Law, P.C. As a third party, we offer the objectivity and detachment necessary to diffuse the problem. Going to court may be unavoidable, but, often, we are effective at using mediation and other Alternative Dispute Resolutions (ADR) to diffuse emotional situations and bring results.

Sizing Up the Alternatives

ADR methods offer something you simply don’t get in court; greater control over the process and the outcome. ADR offers greater flexibility to the parties involved, eliminates the winner/loser mentality, and can be faster and less expensive than litigation. We are well versed in ADR and work with you to select the one which will best serve your needs.

Taking the Right Step

If your board is faced with disputing neighbors, invite us to explain ADR to the parties involved. We can detail the options, field questions, and dispel the myths.

Neighbor disputes are one of the most challenging aspects of serving as an association director. Sometimes, there just aren’t any easy answers. When you know that you’re beyond your expertise, bringing in an experienced third party can make a volatile situation much more manageable.

As a board member, your fiduciary duty to act prudently and stay informed is easier said than done. Running an association requires not only a knowledge of business operations, but also involves decision making about areas in which you may have little or no experience, such as construction, reserves, accounting, insurance policies, and legal issues. We know that preventive measures at the front end can save the association time and money in the long run. That’s why we offer our Legal Audit Program. Having an audit performed for your association will alert the board to potential problems and liabilities-giving the association an opportunity to correct problems before they become a full-blown crisis.

How Can I See the Problem Before it Occurs

No one person can anticipate the full range of problems that a community association may face. However, that doesn’t prevent association managers and directors from facing owner unhappiness – and even legal liability – if the worst happens. Because association law is all that we do, we know the warning signs to look for.

Conducting Legal Audits

We will:

• Alert the board to problem areas in the association’s governing documents, covenants, rules and regulations, design guidelines, and other procedures.
• Help the board to prioritize needed changes by examining the liabilities associated with each matter and the cost and methods available to resolve them.
• Review the existing rules and regulations, resolutions, and policies and procedures for compliance with state and federal law and the association’s governing documents.
• Provide full association assessment by reviewing documents, board meeting minutes, correspondence, contracts, and existing financial safeguards to protect the association’s funds. Giving You Piece of Mind

When there are no problems threatening your association, it’s tempting to go along without rocking the boat. But what you don’t know about your legal position can have tremendous consequences – both to you as a board member and to the association as a whole.

By learning about potential legal problems now, the board has the information necessary to make changes, initiate new policies, and correct problems – ultimately, saving yourself and your association a great deal of time, anguish and expense.

Let us do the worrying about potential problems – so you don’t need to.

North Law, P.C. actively monitors state and federal legislation affecting property owners associations. In addition, the Firm belongs to several organizations dedicated to the support and promotion of property owners association interests and attends various seminars, continuing legal education classes, and workshops to stay current with issues in this legal arena. The Firm then uses the intelligence gained from its investigations to warn its client associations of impending law changes, new laws taking effect, or other statutory shifts that may affect, good or bad, an association’s operation. In that regard, North Law, P.C. tries to act as your community’s “early warning system” whenever feasible.

Inwood North - the case that started it all

In 1987, the Texas Supreme Court ruled in the landmark case Inwood North Homeowners Association v. Harris that community associations did have the right to foreclose upon the lien established by their respective declaration of covenants, conditions and restrictions, or otherwise known as, the "deed restrictions." The lien is a legal mechanism to secure payment of the association's maintenance assessments which are secured by the property as collateral. Not only did the Texas Supreme Court say that it was proper for these community associations to foreclose upon their liens, but the Court also held that the association's lien was superior to the homestead rights of the individual homeowner since that homeowner took title to the property subject to the restrictions already in place at the time of purchase.

"First in time wins, when the buyer has notice..."

The legal principle essentially is this: first in time wins when the buyer has notice. The homeowner's homestead right would never mature before the association's lien right because that homeowner has, at a minimum, "constructive" notice of the existence and content of the deed restrictions on file for that community or neighborhood. The legal reasoning goes that a prospective buyer of property should know, or have reason to know (or discover prior to purchase), any encumbrance or cloud on a title that is of record in the County where the property resides. The law won't reward ignorance or buyers who don't exercise their own due diligence. Bottom line: execute a title search before purchasing property, especially property offered for auction at a Constable's sale.

Foreclosure remains a measure of "last resort"

Pursuant to the authority granted to community associations by their deed restrictions and by judicial decree courtesy of the Texas Supreme Court, community associations can seek foreclosure of their maintenance assessment lien as a measure of last resort to recover delinquent maintenance assessments from their member homeowners. Even though an association has the legal right to foreclose, the reality is that very few properties are actually ever foreclosed upon. In fact, the community associations that North Law, P.C. works with routinely offer alternate payment arrangements to help homeowners discharge their indebtedness to the association and avoid foreclosure, even on the day of the sale.

Post-Foreclosure: the homeowner's Right of Redemption

Even after the association forecloses on a property to recover its delinquent maintenance assessments, the Texas Property Code provides a vehicle for the homeowner to buy back the property within 180 days following the sale. This provision of the Texas Property Code is known as the "right of redemption," and it can be found in Chapter 209 of the Code, otherwise known as the Texas Residential Property Owners Protection Act, or TRPOPA for short.