ask george & chuck
June 11, 2007

HOAs, mortgage fraud
Answers to real estate questions as appearing
in the Houston Chronicle

Dear George: Is it legal for someone to purchase a home using his credit but someone else's money? Also, is it legal to accept a tip or gift for introducing the purchaser to a person who handles these types of transactions even if this was not your true motive?

Answer: If a person has good credit but no money, he can buy a home without violating any laws provided that buyer truthfully discloses everything that must be disclosed. For example, if a lender is involved and knows the buyer has good credit but no money, the lender will most likely require the person who has money to co-own the property and be a party to the deed of trust. However, if there is any misrepresentation or concealment of facts as to the solvency or other credit-worthiness of the buyer or the person providing the money for the purchase, this would violate state and federal laws.

As to your second question, §535.20(a) of the Rules of the Texas Real Estate Commission states: "Referring a prospective buyer, seller, landlord, or tenant to another person in connection with a proposed real estate transaction is an act requiring the person making the referral to be licensed if the referral is made with the expectation of receiving valuable consideration. For the purposes of this section, the term 'valuable consideration' includes but is not limited to money, gifts of merchandise having a retail value greater than $50, rent bonuses and discounts." So, provided the tip or gift did not have a value greater than $50, it should be legal.

Dear George: I live in a gated community. Our conditions, covenants, and restrictions (CCRs) state that an owner, his family, his tenants, and his bona fide guests have legal rights to ingress and egress. However, the homeowners association wants to lock out a guest of mine who is a contractor. The HOA alleges that a contractor performing work on my house is not a guest. I understand that we have rules about construction, but the HOA does not have the right to tell me who can have visit my property (an empty lot) or my home inside the community. The leaders of my HOA want to verbally tweak the rules to bar my guest. What law can I cite to stop them from attempting this?

Answer: CCRs are enforceable as a private contract among the lot owners that everyone agrees to. They cannot be amended verbally; the lot owners must follow procedures written in the CCR to amend them or comply with the provisions of the property code. Hire an attorney to represent your interests in dealing with your HOA.