For the past few years, a legal battle has brewed between neighbors. Last week, a board of homeowners, called the Garden Oaks Maintenance Organization, decided the battle should end. Now I get the feeling they may have surrendered to fight another war.
Those of you who don’t live in Garden Oaks may not care one whit about this, but it would serve us all to understand the dynamics at play. These destructive issues lurch in all our associations.
In 2012, Peter and Katherine Chang decided to add an extra garage to their home. Even though deed restrictions to the Garden Oaks neighborhood allowed for only a one- or two-car garage, the Changs wanted an additional two-car garage, effectively giving them a four-car garage.
The board members of GOMO, responsible for enforcing the deed restrictions of the neighborhood (or so they thought) filed suit against the Changs. They sought a permanent injunction to the construction.
By the letter of the neighborhood law, GOMO seemed to be in the right. The only problem, of course, was they weren’t right. Actually, they weren’t consistent, which is just as bad as being wrong when you’re dealing with property rights.
Just across the street from the Changs, another family had a three-car garage. No, it wasn’t four, but it wasn’t two, either, and if one family could break the restrictions, why couldn’t the Changs?
Thousands of dollars in legal fees later and the Changs won their case, but not because a jury ruled that a four-car garage was OK. In the judge’s final opinion, he didn’t even say the deed restrictions were wrong.
Instead, GOMO was taken down by a technicality. When they formed their organization in 2001, they skipped some paper work and missed a deadline. Even though GOMO “governed” the restrictions for 15 years, a single lawsuit rendered them powerless.
Except it didn’t. They can still enforce the deed restrictions.
Now, let’s skip forward for fear of losing the smartest of you.
Last week, GOMO officially announced it would drop any further options for appeal and seek out a bankruptcy judge to sort out the mess.
Why a bankruptcy judge? Because GOMO has about $600,000 in its bank account, and you’ll remember that a trial and appellate court said the organization was invalid. Every dollar GOMO spends now could be challenged in court, and nobody wants that.
To understand the stakes of this story, I spoke to nearly a dozen people earlier this week from every side of this issue imaginable, and it seems there are two options: Either the board disbands and lets a judge tell them how to disburse that money, or they try a legal maneuver that seeks a judge’s permission to reorganize, so they can continue operations as the gatekeeper of Garden Oaks.
What I’ve learned is there are a lot of people that want GOMO to go away. First among those people is Peter Chang, who fought and won against the organization. There’s another group that wants GOMO to re-form – the legal way, this time – so there can remain some semblance of order to the neighborhood and its deed restrictions.
Without confusing the issue even more, this problem of GOMO’s legal status is almost laughable. You see, before they formed in 2001, there actually existed another similar board. And it turns out that governing body was formed illegally, as well.
In other words, this makes it twice that a Garden Oaks organization has sought to enforce deed restrictions and has, effectively, been shut down by the courts.
Now, imagine living in a neighborhood where the people who purport to run it can’t file paperwork on time, and not just once, but twice. If you live in that neighborhood, how much do you trust the leaders to be fair and equitable?
Here’s the tragedy in the entire mess: Garden Oaks is one of the most desired neighborhoods in this city. Its homes are lovely, its lots big and its elementary school offers a unique experience that parents want for their children. Meanwhile, there seems to be a rag-tag effort at governance that must be fixed now.
Take my observation for the value of the paper it’s written on: Garden Oaks needs governance. The neighborhood needs an organization that enforces its deeds (fairly), and it needs a gatekeeper to maintain the value of the property. Lose that, and your neighborhood becomes another open plot of land for the developer of the day.
What Garden Oaks does not need – and this is true for every board in every neighborhood in our area – is a group of three or four homeowners who think they’re some sort of higher power.
From social events to lawsuits, Garden Oaks needs to get rid of the drama, and they can do this easily.
My hope is that a judge lets GOMO reorganize properly. If that’s allowed, the rest is completely up to the people who live in Garden Oaks.
For starters, homeowners need to get involved in their boards – the current, invalid, GOMO board has four vacancies (from what I’ve heard, many are worried about the legal liabilities of serving).
So instead of using the bank account to threaten lawsuits to every rule-breaker, use some of that money to form a legal entity that has untouchable authority. Once you do that, once you give all homeowners a stake in the success of the neighborhood, you can protect what’s most precious to everyone. You can fund private security, donate to your Montessori school, keep an office that takes care of neighbors and, most importantly, enforce the legal deed restrictions beyond reproach. That’s a war worth winning.