Thursday, May 29, 2008


This is a follow up to the yet unanswered questions in a post below, and may or may not apply, but IS food for thought:

These declarants are setting up the subdivisions so that you are forced to purchase from vendors that they have financial arrangements with forever.

Look at the CCRs for Howard Ranch. Note any provisions obligating you to 1) install propane appliances, 2) purchase all of your propane forever from the specified propane vendor. Note that there is no obligation on the vendor to even be around tomorrow. However, the biggest concern is that propane is economically unregulated which means that they can charge you whatever they want to for propane and you have absolutely no choice but to grin and bear it.

(edit) This propane scam is occurring in subdivision after subdivision throughout central Texas. Natural gas is economically regulated - propane is not. You will have no choice as to vendor, quality, or price. If you attempt to utilize a different vendor, you can rest assured that you will be threatened with fines and foreclosure on your home by an action to enforce deed restrictions.

The HOA is the declarant's enforcement mechanism to force you to support the declarant's designated vendor. The declarant will likely control the HOA for quite some time. One might suspect that the propane vendor and declarant have a side deal that is not being disclosed to purchasers.

Although some industry-folks claim that deed restrictions preserve value, I guess you have to ask "for who?" This restriction has nothing to do with aesthetics, but rather is set up to trap residents into a particular vendor - forever. Aside from the possibility of being bilked while you are there, the habitability of your home will be tied to the welfare of the propane and water vendors. The marketability of your home will suffer if either vendor has a bad reputation, however, the converse is not true.

There are a number of companies going into the "business" of central propane systems because its extremely lucrative. The vendor has an absolute monopoly on an economically deregulated resource - propane. You won't realize you've been had until long after you move in.

Be very wary of those central propane systems. The argument is that they are "economic and efficient" or that they "benefit the community". However, they primarily benefit the declarant and vendors setting them up. Unless you have alternatives, they have zero incentive to please the customer on price, quantity, or quality.

In addition to the price per gallon for consumption, many of these vendors also require a monthly account fee for the privilege of maintaining your customer account. Most consumers are not able to tell whether they are being had because the monthly bill illustrates consumption as gaseous cubic feet (like natural gas), but propane is priced on a per liquid gallon basis.

Think about it and why the system was set up.

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