HOA ???

[SA_Steve]

I sold a house once to a lawyer's girlfriend. She had to call him on the phone constantly while at closing to ask questions.
It was now dark outside after almost three hours of this.

Agents were getting cranky waiting for their commission checks.

I finally told her that so far, all her questions have been about clauses that indemnify some party or another from future lawsuits. Apparently every time there is a real estate lawsuit something gets put into the 'standard' forms to prevent it in the future. And all those laws to protect people in real estate transactions get sidetracked by waivers and other promises not to sue.

My favorite thing is about real estate transactions is the Title Insurance requirement, probably the biggest scam in TX. Lawyer friend of mine says they never have to pay a claim in TX due to the 10 or 12 exemptions. Main one being 'if it's not in the court records' it's your problem not the Title Co's.

As to HOA's, mostly they have been good to me. I am irked by certain favored neighbors who are granted waivers for things like non-compliant huge outbuildings in the back yard, weird colored fences, and adding a second story to a house in one story neighborhoods. HOA is like any other political organization, kinda like the folks who run your church.

HOA's are good at keeping boats and RV's from permanently parking on the street or driveways. Or up on blocks in the front yard.

[JALLEN]

My favorite thing is about real estate transactions is the Title Insurance requirement, probably the biggest scam in TX. Lawyer friend of mine says they never have to pay a claim in TX due to the 10 or 12 exemptions. Main one being 'if it's not in the court records' it's your problem not the Title Co's.

You should buy stock in title companies if you believe that. If they paid no claims, it would be a very lucrative business. At least they would have more money to bribe RE agents with.

Having paid out many millions of dollars on claims on behalf of title insurers, and being paid some of that for going around fixing problems that resulted in a claim, I can say without fear of contradiction that your lawyer friend has no idea what he is talking about.

Lenders require insurance to insure that their mortgage or deed of trust is properly recorded in the chain of title and enjoys the priority they conditioned the loan on having. You don't have to have title insurance if you do not want it. That would be very courageous on your part, but it's not required. You could search title yourself, if you dare, or just hope that the seller who signed the deed actually was the owner, and there are no other owners. Most of the time, they are, after all. Once you take possession, you will learn soon enough who all has rights to use your land, utility companies, neighbors, etc. probably won't affect you, after all, and there are no tax arrearages, or judgments or IRS liens against a prior owner.

In truth, title insurance isn't insurance at all. It is a settlement agreement for the company's negligence, negotiated in advance.

[SA_Steve]

They even subcontract the actual court house title searches to a third party.

I've never bought or sold without a title policy, but have always been jealous of their easy money.

There's two on every corner here in San Antonio.

My lawyer friend retired last year so maybe things have changed. He specialized in real estate law for the past 30 years, in Houston, which gives him some credibility.

[JALLEN]

They even subcontract the actual court house title searches to a third party.

I've never bought or sold without a title policy, but have always been jealous of their easy money.

There's two on every corner here in San Antonio.

My lawyer friend retired last year so maybe things have changed. He specialized in real estate law for the past 30 years, in Houston, which gives him some credibility.

Not when he says stupid things like that. Ask him how much J. R. McConnell cost Title Insurance and Trust Co.

Many title searches are done in Sri Lanka, Philippines, Malaysia, and other such places. Wherever they get them, once they issue the policy, they are on the hook.

[SA_Steve]

I do like the fancy title co offices I've been in.

And the spiffy dressed lady they have who hits the play button on the tape machine that gives 10 minutes of disclaimers before passing out the paperwork.

Paperwork with several lawyers names on it usually.

Lots of one hand washing the other. I'm all for everyone getting paid.

Hope they did not search my Bexar Co court records in Malaysia or wherever. But anything to keep the cost down is ok.

[ScottDLS]

My favorite thing is about real estate transactions is the Title Insurance requirement, probably the biggest scam in TX. Lawyer friend of mine says they never have to pay a claim in TX due to the 10 or 12 exemptions. Main one being 'if it's not in the court records' it's your problem not the Title Co's.

You should buy stock in title companies if you believe that. If they paid no claims, it would be a very lucrative business. At least they would have more money to bribe RE agents with.

Having paid out many millions of dollars on claims on behalf of title insurers, and being paid some of that for going around fixing problems that resulted in a claim, I can say without fear of contradiction that your lawyer friend has no idea what he is talking about.

Lenders require insurance to insure that their mortgage or deed of trust is properly recorded in the chain of title and enjoys the priority they conditioned the loan on having. You don't have to have title insurance if you do not want it. That would be very courageous on your part, but it's not required. You could search title yourself, if you dare, or just hope that the seller who signed the deed actually was the owner, and there are no other owners. Most of the time, they are, after all. Once you take possession, you will learn soon enough who all has rights to use your land, utility companies, neighbors, etc. probably won't affect you, after all, and there are no tax arrearages, or judgments or IRS liens against a prior owner.

In truth, title insurance isn't insurance at all. It is a settlement agreement for the company's negligence, negotiated in advance.

Apparently it's a bit of a "racket" in Texas and most of the companies are privately held (by someone who has a BIL in the legislature)... Supposedly has gotten better, but may not be like your experience in CA.

Now if I can just get a Corny Dog franchise at the Texas State Fair, I will retire from my day job...

[JALLEN]

Apparently it's a bit of a "racket" in Texas and most of the companies are privately held (by someone who has a BIL in the legislature)... Supposedly has gotten better, but may not be like your experience in CA.

Now if I can just get a Corny Dog franchise at the Texas State Fair, I will retire from my day job...

There are two types, "title companies" and "title insurance companies." Only admitted insurers can offer insurance. Only admitted insurers can have the word "Insurance" in their name. Title companies issue policies of admitted insurers as agents, handle the search and examine and prepare the policies, in return for a portion of the premium. Liability under the policy is the risk of the insurer.

I don't know who is admitted in Texas currently. Probably Fidelity, Chicago, First American, Stewart, maybe some others. Chicago and a number of others are owned by Fidelity. Agencies are owned by others, mostly, but not always. If the name doesn't have "Insurance" in it, the company is an agency. Alamo Title Company is an example. I have worked for almost all of them, either as an employed lawyer or as retained counsel to represent an insured.

I'm not an admirer or apologist for the industry, particularly. In the last decade, I was hired in a number of cases as an expert witness, in many cases pointing out where the title company had messed up. There have been a shameful number of instances where the misbehavior or incompetence of title co. employees has resulted in horrible losses, some from deliberate dishonesty. The J.R. McConnell fiasco a few decades ago is a memorable example.

[ELB]

Nonetheless, we have strayed considerably from HOA's and there ability to restrict guns.

That question was answered several pages back. You have to read the governing documents to ascertain what "rights" one has surrendered.

Not arguing that point either. However, that doesn't negate my point that we have strayed from the original topic to lawyers killing deals.

OK by me. I have learned a lot about agents, lawyers, CC&Rs and covenants that I did not know. I hope to never have to buy a house again, but good to have these details in my back pocket. I appreciate this particular rabbit trail.

[VMI77]

I question the idea of losing the deposit by waiting until closing to object. The contract ought to provide that you will have a chance to approve the title report which sets forth everything that will affect your title, plus the items that will be removed at the closing, such as the sellers' loan(s), etc. I would expect that the buyer would review that report and approve, or object at that time. If an item pops up at the closing undisclosed prior, then the buyer would have every right to object, cancel and get the deposit returned as well as perhaps recover any expenses incurred in the failure to disclose an encumberance on title. OTOH, if you were lulled by smooth blandishments into signing off on things without really knowing what you were doing, by the agent, then you have a gripe with the agent and broker.

This happened in Oklahoma so maybe the rules are different. At closing we were hit with a notice that the front of the house encroached a city easement by about a foot and asked to sign a waiver indemnifying the title company. This was a deal killer for me because I expected to be transferred at some point and under our company relocation policy we could not sell to the relocation company if the property had an easement encroachment.

The title company attorney assured me that the waiver was no big deal and urged me to sign in order to complete the closing. I told him that if it was not a big deal then the title company could indemnify against forced removal. It wouldn't have fixed the relocation problem anyway, but he declined, and I refused to complete the closing and required that the seller get the easement vacated before the sale was completed. We agreed to lease the house for six months to give the seller time to get the easement vacated. During this six month period the seller, figuring I assume that since we were already living there we wouldn't bail when the lease expired, made no effort whatsoever to get the easement vacated....so we moved out. I got the deposit back.

[JALLEN]

This happened in Oklahoma so maybe the rules are different. At closing we were hit with a notice that the front of the house encroached a city easement by about a foot and asked to sign a waiver indemnifying the title company. This was a deal killer for me because I expected to be transferred at some point and under our company relocation policy we could not sell to the relocation company if the property had an easement encroachment.

The title company attorney assured me that the waiver was no big deal and urged me to sign in order to complete the closing. I told him that if it was not a big deal then the title company could indemnify against forced removal. It wouldn't have fixed the relocation problem anyway, but he declined, and I refused to complete the closing and required that the seller get the easement vacated before the sale was completed. We agreed to lease the house for six months to give the seller time to get the easement vacated. During this six month period the seller, figuring I assume that since we were already living there we wouldn't bail when the lease expired, made no effort whatsoever to get the easement vacated....so we moved out. I got the deposit back.

You handled it exactly right given the situation. The pertinent rules aren't much different.

If the seller knew of the encroachment before the closing, that should have been disclosed to you prior to closing. If it was recorded, then it should have been picked up in the search and disclosed in the title report.

Assuming it popped up at the last minute, a surprise to everyone, you were well within your rights to pull out and recover your deposit. Most contracts provide that title will be delivered in a certain condition with respect to encumbrances, easements, restrictions etc. This contemplates that you will be made aware of those.

A survey would have revealed the encroachment. In many states, surveys are routinely done, or verified at each transfer of title, showing the boundaries and the location of all improvements, easements, etc.

The title lawyer was likely correct that it was "no big deal," in the sense that very likely the utility would not require moving the building to vindicate their rights. Nevertheless, it is a cloud on title that you are not obligated to accept unless you agree to. This illustrates the importance of knowing what you are doing or having someone in your corner who does and is working for you and only you in this most important and often complex transaction.

I didn't know what title policies are issued in Oklahoma. In some residential policies I am familiar with, the title insurer takes those risks as part of the typical coverages, along with zoning and violations of CC&Rs.

[VMI77]

The title lawyer was likely correct that it was "no big deal," in the sense that very likely the utility would not require moving the building to vindicate their rights. Nevertheless, it is a cloud on title that you are not obligated to accept unless you agree to. This illustrates the importance of knowing what you are doing or having someone in your corner who does and is working for you and only you in this most important and often complex transaction.

I agree, and if I wasn't facing the prospect of having to sell to a relocation company I might have proceeded differently. I ran into a similar situation with the subsequent house purchase, except we weren't ambushed at the closing....it had a gas pipeline easement from 1920 and while I didn't expect a gas line to be built though the subdivision I got the seller to vacate the easement anyway. As it turned out I changed companies and so couldn't sell to the relocation company anyway.

[cb1000rider]

I have a question. In a typical "HOA" environment, who pays the legal fees arising from a law suit against or by an "HOA"?

The HOA pays its attorney fees and costs of litigation from the dues collected from homeowners. The person being sued by or that is suing the HOA pays their attorney. Depending upon the nature of the lawsuit, the individual may be ordered to reimburse the HOA for reasonable and necessary attorney fees and costs of litigation.

Chas.

Expanding on Charles' answer a bit, you should know the following:
1) Most HOAs insure their board members to protect them from personal liability.
2) Generally, most board members are indemnified for their decisions. I'll wager that an attorney can give you examples of really bad behavior that might not be indemnified, but generally you can't hold board members directly (personally) responsible.

That's a lot of power and very little personal liability.

3) If you sue the HOA, you're suing yourself. Not in totality, but if you were to win a $1M judgement against your HOA, you'd find that you're on the hook for part of it.

4) If the HOA is out of money, they have to power (in most cases) to do a "special assessment" and force HOA members to pay. That payment is secured with ability to lien and eventually foreclose on your home. Texas law protects home owners from foreclosure due to fines and fees, but it's pretty trivial for the HOA to apply dues payments to fines and fees, leaving your dues unpaid and your home unprotected.


The vast majority of HOAs are functional organizations. And for communities (like condos) where a lot of common property exists, an association with enforcement "teeth" is necessary... Just be aware of what you're getting into.

[thetexan]

There was a ruling not too long ago upholding the principle that not only are you allowed to have and carry a gun in your condo, if there are any common areas the ownership of which is shared by the owners of the condo that you can carry there also.

tex

[Charles L. Cotton]

There was a ruling not too long ago upholding the principle that not only are you allowed to have and carry a gun in your condo, if there are any common areas the ownership of which is shared by the owners of the condo that you can carry there also.

tex

That's the Chiarini case I mentioned and linked in the 2nd post on page 2.

Chas.

[jamminbutter]

The board of our HOA voted tonight to post compliant 30.07 signs at each of the park areas. The HOA is made up of single family residents and is incorporated as a private organization so the attorney said they can be posted since the parks are not commonly owned. Our property manager indicated that of the 12 communities she manages that 8 have thus far passed resolutions to post 30.07 (but no 30.06 as they wish to still honor concealed carry) they and for the 60+ communities the entire company manages 75% are proceeding on the same path.