Why the HOA is Fully Responsible For Paying to Fix Our Streets' Potholes

Last May 12, 2025, just before the Peachtree Village HOA’s annual meeting elections were held, the Board from the previous year went to considerable trouble to bring in a guest speaker and some very fancy projector equipment all for the purpose of convincing our members (homeowners) how bad an idea it would be for our HOA to dissolve. They had one main argument—“You had better not dissolve the HOA because, if you do, then each homeowner on every street would be responsible for all the maintenance on that street. But if you don’t dissolve, then the HOA will take care of all the maintenance of the streets.” The speaker, along with the former President Joe Tarell, went into detail to explain how every home is located on a “Private Drive,” meaning, streets that don’t belong to the City of Plano, but are “ceded” to the HOA community. On one of the projected images, it showed one street divided into 4 sections which, if the HOA were dissolved, those sections would revert back to the control and responsibility to maintain of each one of those homeowners. After the presentation, Mr. Tarell asked for a “straw” vote of all present, “Who here wants to dissolve the HOA?” And as he no-doubt had hoped, most all shot their hands up in the air! The theatrics accomplished the one-sided goal which was, in this case, to tamp down the efforts of people in our community who were either advocating for, at least, seriously inquiring about, dissolving our HOA.

But in the process of doing so, the Board from last year ended up revealing something that not very many in our community were aware of—that all the deterioration of our Common Areas, which includes every one of our private drives (the blue sign streets), should have been maintained, preserved and repaired by our HOA!

So, which is it? Do our streets and retaining walls, for example, only “belong” to the HOA only when making the argument against dissolution, but when it comes to funding repairs, such as, to all the potholes on our streets, then suddenly, they belong to the homeowners? Well, in reality, the last Board and many others before them have been playing the old Heads We Win, Tails You Lose game, and it’s high time the HOA plays it no more.

As it turns out, some Boards in the past did, indeed, connive some homeowners into paying for Common Area repairs, when the HOA should have paid for them (which is one reason why our Neighborhood Union is advocating the new Board compensate them for this injustice). So, the question now is, “What sort of trickery was used to make them think they could get away with it?” And the answer has to do with the fact that so few Peachtree Village homeowners, both now and in the past, have read all of our founding documents and, of those who have, had trouble understanding them, largely because, they are poorly written. There’s clear evidence that whoever typed them up back in 1984, made at least one blunder while copying much of the text from a template that was designed for much larger HOA communities where there was room for what are called “capital improvements.”

Without getting too far ahead, let’s take a moment to define some terms. A capital improvement is a permanent structural change or addition to a property that substantially increases its value. As far as HOA communities go, a capital improvement would be something like adding a playground, a decorative plaza with benches, a pond, a fountain, an entrance arch, an outdoor exercise zone or a golf-putting green (Yes, these are all examples from other HOA communities in the Plano area).

What then is the difference between a capital improvement and maintenance and preservation? In case it’s not clear, it’s about maintaining and preserving whatever permanent structures were already in existence but, from time to time, need to be repaired or replaced. They are not structural additions or changes. Therefore, whenever any of the structures that were originally part of Peachtree Village HOA community when it was first built in 1984-1985, like the interior (blue sign) streets, curbs, auxiliary parking, walkways, retaining walls, greenbelt, and the trees and shrubs on the greenbelt, any expense for their maintenance, preservation or repairs are not capital improvements!

However, there have been some Boards in the past who have exploited the fact that a lot of people don’t understand the difference between a capital improvement and the maintenance, preservation and repairs of the permanent structures that were originally constructed on the parts of our individual home properties which are “ceded,” that is, control given over, for the common use of the community, and they actually pressured homeowners to spend a LOT of their own money, not to make any capital improvements (changes or additions), but to pay for the maintenance, preservation and repairs of some Common Areas, especially when it came to potholes in the streets and the wooden, rail-tie retaining walls which, over the years, have rotted and fallen down.

With these clarifications, let’s now look at what the Peachtree Village HOA’s founding documents—the Declaration of Covenants, Conditions and Restrictions (or CCRs for short), the By-Laws and the Articles of Incorporation--actually say about who is supposed to pay for what.

Let’s begin with the Articles of Incorporation (the document that made the Peachtree Village HOA a non-profit corporation), registered with Collin County and the State of Texas in 1984, ARTICLE THREE, paragraph one, sentences one and two:

“This Corporation is a non-profit corporation. The general purpose for which it is formed is to provide for maintenance and preservation of the Common Areas.”

ARTICLE THREE goes on, in section b, to reiterate the “specific purpose” for which the Corporation [the HOA] was formed: “To maintain the Common Areas for members.”

Pretty clear, right? If all we had were these 2 (two) statements, then any person of ordinary reason would have to say the Peachtree Village HOA is fully responsible for maintaining and preserving all of our Common Areas, like fixing the potholes on our streets and repairing or replacing the retaining walls. Fortunately, this is not the only place in our original documents that makes this clear.

Turning now to the Declaration of Covenants, Restrictions and Conditions of the Peachtree Village Addition, also first registered with Collin County in 1984, by Fox and Jacobs, the construction company that built Peachtree Village, beginning that same year, let’s see what it says is the definition of “Common Areas” in ARTICLE I, Section 11.: “’Common Areas’ shall mean and refer collectively to “Common Maintenance Areas” and “Common Ownership Area.” OK, so what are those? Mercifully, the following Section 12 clarifies that, in the case of Peachtree Village, “there are no Common Ownership Areas.” In other words, every square inch of Peachtree Village consists of either “Affected Lots,” that is, the properties which are under the direct control and responsibility of each of the 97 Members (homeowners) and the other parts of their properties which are “ceded,” meaning, control and responsibility are surrendered to the control and responsibility of the HOA for common usage.

Also helpful, ARTICLE I, Section 13 explains the “’Common Maintenance Areas’ are the Common Drive[s] and Common Greenbelt Areas.” OK, so what exactly is a “Common Drive”?

Thankfully, ARTICLE I, Section 14 spells this out IN GREAT DETAIL:

“Common Drive” shall mean and refer to a contiguous area designated by the Legend on sheets 2 and 3 of the Subdivision Plat as a Common Access Easement, and such paved, cobbled, or bricked courtyards, parking areas, and/or drives as may be constructed by Declarant [Fox and Jacobs] thereon for providing access to Units [the houses according to Section 8] from the dedicated streets, or for other purposes related to use of Units.”

Now that, hopefully, it’s completely clear what the Common Drives are, and that it is the HOA’s responsibility to maintain them, where was the money to pay for this maintenance and preservation supposed to come from? Well, the CCRs tell us exactly where the money is supposed to come from in ARTICLE V, Section 3. Annual Assessment or Charge, sub-section (a) Unit Owned by Parties Other Than Declarant.:

“Subject to the terms of this Article, each Affected Lot [individual property] in the Subdivision on which a completed Unit is now or hereafter constructed is hereby subjected to an annual maintenance charge and assessment [HOA dues] not to exceed $40 per month or $480 per annum (unless such maximum shall be increased as provided in the By-Laws of the Association [67% approval vote by the Members]), for the purpose of creating a fund to be designated and known as the “maintenance fund,” which maintenance charge and assessment will be paid by the Owner or Owners of each such Unit within said Subdivision….”

The CCRs go on to make what they say in sub-section (a) even more explicit in ARTICLE V, Section 3., sub-section (d) Purpose of Maintenance Fund:

“The Association shall establish a maintenance fund composed of Owners’ regular assessments [regular dues payments] and Declarant’s elected contributions and shall use the proceeds of such fund in providing for normal, recurring maintenance charges for the Common Areas for the use and benefit of all residents of the Subdivision.”

Interestingly, though sub-section (d) goes on to state “the Association shall have no obligation…to make capital improvements to the Common Areas,” the last sentence adds onto the HOA’s responsibility to maintain any [capital] improvements once they’re made:

“The Association shall, in addition, establish and maintain an adequate reserve fund for the periodic maintenance, repair, and replacement of improvements to the Common Area. The fund shall be established and maintained out of the regular annual assessments.” Perhaps, the HOA can be glad that, over the 40+ years history of Peachtree Village, the only capital improvement ever made was the construction of the sound barrier wall behind the backyards of the homes adjacent to Spring Creek Parkway, but now that it’s there, any maintenance and repairs of that wall is now, also, the responsibility of the HOA.

So, for anyone who has carefully read the Peachtree Village HOA’s original Declaration of CCRs, By-Laws and Articles of Incorporation, and paid attention to the multiple parts where they clearly state it’s the HOA’s financial responsibility to maintain, repair and preserve all the Common Areas, which includes all the “blue sign” streets where all 97 of our homes are located along, how did one or more Boards in the past find some way to confuse homeowners into thinking it was their responsibility to pay for repairs, especially for potholes and cracks in the streets and the retaining walls that fell down?

Well, a good part of it comes from the confusion they first created on the basis of what ARTICLE V, Section 4, Special Assessments for Working Capital Fund, Nonrecurring Maintenance and Capital Improvements, sub-section (b), but which only works if sub-section (b) is quoted out of context, i.e., ignoring the title of Section 4 which clearly delineates what the funds would be used for—Nonrecurring Maintenance and Capital Improvements! Sub-section (b) merely states that if the homeowners who live on a given street want to form a “Courtyard Committee,” and if this committee wants to pool funds from among the homeowners on their (blue sign) street to pay for a capital improvement, the Association will be responsible for collecting these additional assessments for the purpose of making the capital improvement, but must not co-mingle these funds with any other fund they collect from everyone else in the community. Presumably, this sub-section was included to make sure that if any funds collected from the homeowners on a given street to pay for a capital improvement exceeded the actual costs of the capital improvement, the HOA could not put the remaining funds in the general, maintenance fund account. Once more, this sub-section does NOT say anything about the people living on one street having to pay for the maintenance, repairs and preservation of their street, but only about how any funds they might agree to pay, just among themselves, for a capital improvement on or near their street.

How much more plain could it get? Well, as if persons typing out our CCRs in 1984 had received a glimpse into the future, when a Board or Boards might try to say otherwise, ARTICLE VI, GENERAL PURPOSES AND DUTIES OF BOARD OF DIRECTORS OF THE ASSOCIATION, Section 1. Purpose of Maintenance Fund, sub-section (b), states:

“The Board, for the benefit of the Owners, shall provide and shall pay for out of the maintenance fund provided for in ARTICLE V above the following…Care and preservation of the Common Areas….”

Therefore, with all of these numerous attestations, twice (2) from the Articles of Incorporation and explicitly three (3) times in the CCRs, five (5) times altogether so far, let’s examine ARTICLE VIII, COURTYARD COMMITTEES to see what it says and discern what it was intended to mean.

Now that we have, hopefully, a clear sense of the context and definitions of terms in mind, perhaps ARTICLE VIII, Section 3. Functions, sub-section (a) will properly set the stage for what sort of costs any Courtyard Committee, representing homeowners on a given street, are to pay for themselves:

“In general, the Courtyard Committees are established for the purposes of (i) determining the necessity for repairs or desirability of improvements to the Common Drive of such group of Clustered Units [all the homes on that one street], (ii) bearing the cost of any Common Drive improvements determined to be desirable, (iii) overseeing the planting, construction or installation of any such Common Drive improvements….” Notice the use of the word “improvements,” three (3) times, and NOTHING about bearing the cost of maintenance, repairs or preservation!

How then is it that one or more Boards in the past, assuming they had ever read and understood what the original CCRs, the By-Laws and Articles of Incorporation, state over and over again about the responsibility of the HOA to pay for the maintenance, repairs and preservation of the Common Areas, could have been so unethical, immoral and dishonest to then take advantage of an unmistakable typing error in sub-section (b) of ARTICLE VIII, Section 3, as they intentionally used the resulting, contradictory wording to cancel out everything else plainly stated repeatedly in all the rest of our founding documents!

Sub-section (b) begins with, “Recurring maintenance of Common Maintenance Area lawn, shrubbery, trees, and other landscaping such as mowing, pruning, fertilizing and watering, shall be contracted for by the Association in accordance with Article V hereof.”

So, this sub-section begins by talking about the landscape maintenance in sentence number one, but the following sentence goes completely off topic and was clearly borrowed and retyped from somewhere else! Here’s what was typed:

“The cost of all the other maintenance of and repairs to the Common Drive or Common Drive [emphasis added], and improvements determined by a Courtyard Committee to be desirable, shall be borne on a pro rata basis by the members of the Courtyard Committee having jurisdiction over the Common Drive in question.”

Already, we know something is wrong because the term Common Drive is repeated! This tells us the typist got something mixed up, so now the only question is, “What had she (or he) conflated?”

To figure this out, let’s bear in mind this is 1984, long before computer word processors had become what they are today and ready-made templates were widely available. It’s almost certain, therefore, that whoever typed up our founding documents was looking at a similar set of founding documents for some other, probably much larger HOA community, which had the luxury of a lot of extra space surrounding every Common Drive, which would have necessitated establishing rules for how any sort of capital improvements would be funded later on, for the benefit of those living on that particular drive, something which really should have been left out of our CCRs, in that, there is hardly any room for any such additional structures on our tiny, crowded streets.

So, what is the most likely explanation for this very odd sentence number two? Well, all one has to do is go back to ARTICLE V, which had just been referenced at the end of sentence one! In ARTICLE V, Section 4, sub-section (b), we read the words, “…by the Courtyard Committee having jurisdiction over the Common Area to be improved and provided further that such assessment shall be levied on a pro rata basis against only the members of such Courtyard Committee.”

Now, compare this to what is typed in another sub-section (b), in ARTICLE VIII, Section 3,”

“…improvements by a Courtyard Committee to be desirable, shall be borne on a pro rata basis by the members of the Courtyard Committee having jurisdiction over the Common Drive in question”! It’s almost exactly the same, word for word…and both of them are talking about IMPROVEMENTS, NOT MAINTENANCE!

In other words, lines 4 and 8 of ARTICLE VIII, Section 3., sub-section (b) were accidentally inserted into the text! This becomes even more obvious when the 3rd sentence goes on to talk about how a Courtyard Committee shall notify the Association in writing of the IMPROVEMENTS (not maintenance, preservation and repairs) to be done and the cost thereof, and then the Association shall levy special assessments against each Affected Lot within the jurisdiction of such Courtyard Committee.

Therefore, after we forgive the typist for getting confused when s/he shuffled over to the other HOA’s CCRs, which were serving as a template, to review ARTICLE V, after it was mentioned at the end of sentence one of Section 3., sub-section (b) of ARTICLE VIII, different only by adding the three “III”s, then let’s see what Section 3. Sub-section (b) would have and should have looked like:

“Recurring maintenance of the Common Maintenance Area lawn, shrubbery, trees and other landscaping such as mowing, pruning, fertilizing, and watering, shall be contracted for by the Association in accordance with Article V hereof. The cost of all improvements determined by a Courtyard Committee to be desirable, shall be borne on a pro rata basis by the members of the Courtyard Committee having jurisdiction over the Common Drive in question. Whenever a Courtyard Committee shall determine such [improvements] necessary and desirable, it shall notify the Association in writing of the IMPROVEMENTS [emphasis added] to be done and the cost thereof and the Association shall levy special assessments against each Affected Lot with the jurisdiction of such Courtyard Committee for such Affected Lot’s pro rata share of such costs.”

With this text corrected, we actually end up with a fourth (4th) attestation within the CCRs, in addition to the 2 from the Articles of Incorporation, making it plain as day the HOA is fully responsible for the costs of maintaining, repairing and preserving all the original structures in the Common Areas, like the blue sign streets and retaining walls.

Sure, if the Peachtree Village homeowners on any given street should ever want to pay out of their own pockets for some sort of capital improvement (maybe to replace the cement on the street with cobble stones???), they’re free to do so. But let’s no longer let anyone ever again try to use the typist’s mistakes in our original CCR’s in order to remove what is unequivocally stated in SIX (6) other places in our founding documents, just so another Board might try to avoid their responsibility to fix all the potholes on our streets, the remaining rail-tie retaining walls that are going to fall down, probably sooner rather than later! Instead, they should not only step up to the plate and take care of all the Common Area repairs needed, but also reimburse any and every homeowner who was, in the past, unjustly conned into thinking they had to pay for the repairs of potholes on their streets or fallen retaining walls nearby.

Rick Lannoye, Founder of the Peachtree Village Neighborhood Union

PS In case you’re wondering how I was able to figure out what had happened during the typing up of our original CCRs, my university training in Greek and biblical scholarship, and my several years working as an ACLU of Texas volunteer lobbyist, has provided me an excellent background for understanding legal documents (I actually co-wrote some legislation with my Texas state senator’s law clerk which was passed into law in the mid-1990s), as well as how to apply the strict discipline of Contextual Criticism, one of the two main methods (besides Textual Criticism) scholars who study copies of ancient, hand-written documents, use to figure out whenever ancient, often-fatigued copyists made mistakes, when they lost track of where they were while copying from another, earlier copy. It was a very common error, and while it got a little better with the invention of the typewriter, even the best of legal typists, especially before the invention and improvements of word processing programs, would get sentences mixed up. Thankfully, many of these mistakes can be discerned with the help of Contextual Criticism in order to reconstruct what the text should have looked like.