Michael Clauer was commanding more than 100 soldiers in Iraq when his homeowners association sold his family's house at auction for $3,201. The home was worth $315,000. The Clauers owned it free and clear. The debt that triggered the sale was $800 in unpaid HOA dues.

Clauer is an Army Reserve captain who had been on active duty since February 2008. His wife, May, was left to manage the household alone while her husband was deployed to a combat zone. She later told reporters she was suffering from severe anxiety and depression during that period. Mail piled up. Certified letters from Heritage Lakes Homeowners Association in Frisco, Texas went unopened. Those letters contained the warnings that their home was about to be foreclosed on.

By the time Michael learned what had happened, the house was already gone. Heritage Lakes HOA had moved through the legal process, placed the property in Denton County's foreclosure auction, and sold it. The buyer paid $3,201. More than a year later, that same buyer resold the home for $135,000.

How Texas Law Made It Possible

What allowed this to happen so fast comes down to one number: 27 days. That is the length of the nonjudicial foreclosure process period in Texas, the shortest of any state in the country. An HOA in Texas does not need a court order to foreclose on a home over unpaid dues. It can move from delinquency notice to auction in less than a month.

The Clauers argued that federal law should have protected them. The Servicemembers Civil Relief Act exists specifically to shield active-duty military members from certain financial and legal actions, including foreclosure, without a court proceeding. Michael Clauer was on active duty from February 2008 through October 2009, a period that covered the entire foreclosure and auction. The HOA proceeded anyway.

The broader trend behind their case is significant. HOA foreclosure filings in Texas had grown from roughly one percent of all home foreclosures to more than ten percent in the years leading up to the Clauers' situation. The Clauers were not an isolated incident. They were the case that finally had a name and a face.

The Fallout When the Story Went Public

When the story spread nationally, the reaction was immediate and severe. Heritage Lakes HOA board members received death threats. The association became a symbol of everything people feared and resented about HOA power, and the Clauers became the human cost of a system most homeowners had never thought to question.

At least three bills related to HOA foreclosure practices were filed by Texas lawmakers in direct response to the Clauer case. The story had reached a point where legislators felt they could not ignore it.

How the Clauers Got Their Home Back

The case moved into litigation, and a court-ordered settlement conference produced an agreement that returned the house to Michael and May Clauer. The legal argument centered on the Servicemembers Civil Relief Act and whether the HOA had the right to proceed with a nonjudicial foreclosure against an active-duty soldier without court approval.

The settlement gave the Clauers their home back. The family later made plans to relocate to Virginia. The house in Frisco, the one they had owned outright, the one that sold for $3,201 while its owner was serving overseas, was returned to them through legal action they had to fight for after coming home from a war.