ask george & chuck
March 3, 2008

Escaping leases, homeowners associations ...
Answers to real estate questions as appearing
in the Houston Chronicle

Dear George: I signed a lease agreement on Friday. On Sunday, I found out about a much more desirable living situation. Is there a way I can get out of the lease without a penalty?

Answer: No. You signed an agreement. The law doesn't make allowances for you to change your mind.

Dear George: The board of directors of our homeowners association, a non-profit organization, made a $10,000 donation to the local school district without seeking approval from the homeowners. This donation was made out of our reserve fund; the board then increased the annual HOA dues in order to build up the reserve fund. Does the board of our HOA have the legal right to make donations on our behalf without our approval? Don't they have a fiduciary responsibility to the homeowners?

Answer: Your homeowners association should've provided you with several documents when you joined, such as its covenants, conditions and restrictions (CCRs); bylaws; and possibly rules. Read the CCRs completely to determine whether the board of your HOA acted in good faith. The board members of your HOA have a fiduciary responsibility to you, the members of the HOA, and can be held accountable. It's unlikely that the CCRs allow for charitable donations; usually, HOA funds, including assessments and special assessments, are supposed to be used for HOA purposes. Contact a lawyer, as this can get out of hand very easily.

Dear George: I'm thinking of buying a parcel of land that I'll later divide into smaller lots to sell. What is the most common lot size that people want?

Answer: There isn't one answer to that question. It depends on many factors. There's location: One-acre lots might sell like hot cakes in an urban downtown but linger on the market in a rural area. Also, market conditions come into play, as well as what a certain tract size can be used for in a particular area. Talk to a local developer or real estate agent to get some statistics for sales in the area.

Dear George: I belong to a property owners association that exists primarily to maintain five miles of private roads within a 1500-acre tract used by the owners. The tract is divided into 75 lots, and the POA is funded by an annual assessment of $2 per acre. Only 60% of the property owners pay the annual assessments, and I've argued that the POA should place a lien on those delinquent accounts to urge their compliance. Is there a suggested organizational structure that help the POA to be more litigation resistant? What is the best source of legal counsel when the POA cannot afford one on a retainer?.

Answer: You need to read the documents and restrictions specific to your POA to determine what the association can do. The best route to follow would be for the POA to take up a collection to hire a lawyer. The lawyer could set and collect the assessments as well as alter the POA's organizational structure as needed.