Homeowners’ Association Foreclosed on Soldier’s Home For Failure to Pay $800 in Fee — Selling the $300,000 Home for $3500

When Michael Clauer went to Iraq as a captain commanding over 100 soldiers in Iraq, he was likely contemplating many potential dire consequences, but he probably was not thinking about the threat posed by his homeowners’ association. Because Clauer’s wife did not pay the homeowners’ fees, the association foreclosed on his $300,000 house and sold it for $3,500. They owed only $800. The story reveals the gross abuse allowed under a Texas law which gives such associations the right to foreclose on homes for failure to pay ANY amount — and to foreclose without a court order. Select Management Co., which runs the development, has refused any comment.

Michael, 37, went on active duty in February 2008 and, after his deployment, his wife May went into a depression, worrying about him and a ten-year-old and a one-year-old with a serious seizure-related disorder. She stopped opening mail because she was afraid about bad news about Michael and reportedly did not see the due notices for the associational fees.

Even if this were a case of knowingly failing to pay the fees, what happened in the case is outrageous. Without any court order, the association foreclosed on the $300,000 and then sold it for $3,500. The mysterious buyer then promptly resold the house to a third person.

Michael says that the Homeowners’ Association officers live near him and received personal visits to collect on undue fees, but his wife only received letters. They also claim that the homeowners’ association’s lawyer filed an affidavit wrongly claiming that neither of the Clauers was on active duty — since laws protect servicemembers in such cases. It should be noted that not just servicemembers should be protected from such actions. This is an abusive (and highly suspicious) series of transactions.

Despite widespread stories of such foreclosure abuse without court orders, legislators in states like Texas appear unwilling to do anything to create a level of judicial review. Banks and associations are able to act unilaterally against families with little procedural protection for families (here). These banks and associations tend to carry far more weight with politicians than do average citizens.

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