HOA litigation results

RayC4 (Virginia)
Posts: 173

Posted:

As there are frequent admonitions on this forum "not to sue your HOA," members with vicarious interest might be interested some real-life results of such litigation just (March 2015) concluded. This is (was) a declarant controlled subdivision of lots/single homes where homeowners sued the declarant and the HOA, and the declarant countered-sued the HOA and homeowners individually.

The five-year long process also included court injunctions, a (failed) bankruptcy attempt by the HOA, a mediation attempt, a county prohibition against further building permits, and engagement by the state health department (represented by the state AG Office), and other aspects too bizarre to mention on a public forum. Here is the readers digest version of the outcome which took the form of a Court-ordered settlement agreement:

1. HOA is dissolved.

2. Original Covenants (CCR's) abolished except for some basic arc guidelines (2 pgs).

3. Declarant's 95 yr Lease of common open space to HOA is voided.

4. All liens and/or memos of liens of record are released.

5. Shared water/septic (located on common space) will be provided by the Developer thru formation of a utilities entity governed by a requirements contract (i.e. current and future homeowners must acquire w/s thru the new entity which must provide adequate service to all). Contract recorded with County land records.

6. Homeowners will pay a Rate for w/s determined by items out of developer's control (e.g. consumer price index; comparable county rates, etc).

7. Cash 'buyout' to declarant of $18K (split among homeowners) most of which is earmarked for immediate utilities repairs.

Legal costs and expenses? In the neighborhood (no pun intended) of $400K (both sides inclusive). Emotional costs? Hah!..........

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Isn't this just an HOA of a different animal? Seems to me if you read between the lines you still have owners who have to pay into a "utilities" account and then have special assessment to buy out the Developer of 18K. That is if you get everyone to pay their equal amounts. Plus releasing liens? That's money OWED to the HOA. Which could have been applied to some of the legal and operation costs while all this was going on.

I see this as a "Be careful of what you wish for... You may just get it..." Really think this was all done by people who can not see the "bigger picture" and only their own.

Former HOA President

RayC4 (Virginia)
Posts: 173

Posted:

Melissa, the buyout is of course a one-time thing. The $18K is lunch money when you consider that the amount is split equally among the homeowners as part of a formal settlement and Court order. (There's no "getting everyone to pay" about it, unless someone prefers jail time.)

There is no more HOA. All previous HOA 'debts' are set to zero, and the declarant's attorney will 'unfile' any lien issues.

Regarding any 'big picture,' the homeowners had little choice here but to divorce themselves from an abusive declarant (who at one time was budgeting REGULAR monthly assessments per homeowner of $1300.00 in a subdivision with no amenities.) Owners will no longer deal with liens, violation notices, debt warrants, special assessments, and the like. He's no longer HOA Director because there is no longer an HOA.

As for the utilities, the homeowners end up paying for service in amounts comparable to other county residents. But the w/s service will be done properly and professionally (which was not the case previously).

Bottom line, the owners are 'out from under' this individual. He remains the developer, but he has lost power over the lives of the owners. The owners are partying, but we have all learned some expensive lessons.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It is still a HOA of another nature/creature. If you have homeowner's who share a common element be it utilities, sewage, or pond it is still a form of a HOA. It's just not incorporated. Which to me, I'd rather have the protections incorporation offers. Plus the fact that if someone owes money, I want the right to use legal means to collect it.

I am sorry people but I don't live in a "utopia" society mindset. Taking away the ability or wiping a lien just because you don't like it doesn't make it a celebration. It makes you unable to collect debt owed. Leaving the only option to sue. Which if you know how that works, is a really bad idea over a lien.

If you have an issue with the title "HOA", then you did resolve that for yourselves. However, you all still will be acting as one but with lots less collection ability and control. Sorry "Big bad developer" was a jerk but you don't let the kids run the candy store either.

Yes, opinions on this will be full of congrats and way to goes... But I see it as a "Peric" victory. Just exchanging one animal for another that has less bite. Sometimes you need bite in addition to bark...

Former HOA President

AmandaR2 (South Carolina)
Posts: 566

Posted:

Ray, very interesting case. Thanks for sharing the results. I'm glad to see that the courts finally saw the declarant for what he really was. But wow 5 years that a long time, and the money OMG! It doesn't sound like y'all had a choice though I don't blame you. BTW I IMO what you have now seems like it'll work much better for you and your neighbors than a traditional HOA. Congrats on you victory!

BanksS
Posts: 403

Posted:

Quote:

Posted By RayC4 on 03/24/2015 6:12 AM

5. Shared water/septic (located on common space) will be provided by the Developer thru formation of a utilities entity governed by a requirements contract (i.e. current and future homeowners must acquire w/s thru the new entity which must provide adequate service to all). Contract recorded with County land records.

6. Homeowners will pay a Rate for w/s determined by items out of developer's control (e.g. consumer price index; comparable county rates, etc).

Ray,

On your list #5 will you explain this a little further. What do you mean by the Developer will provide w/s thru formation of a utilities entity governed by a requirements contract? and #6 the w/s rates are controlled by the consumer price index and comparable county rates, etc. I'm trying to wrap my mind around this concept. This may be be something I can bring up to my BOD as a means of determining rates for the sanitary sewer in my development. Our current rate structure has no data behind the amount charged. It's just a number someone pulled out of their heads. They also get the majority of their funds through an unusually high sewer connection fee to new homes connecting to the sewer. Very risky in my opinion. We don't have new homes built here on a regular basis. They are few and far between. We had two new homes built in the development last year. Unfortunately one of the homes connected to the sewer and the sewer line is clogged. He has had a porta potty by his house for months. Part of the special assessment is to pay for this repair. Each year at the annual meeting someone brings up whether the fees are adequate and the BOD always replies yes but now we are facing a special assessment so obviously it's not enough. The fees structure needs a complete overhaul. Thanks. - Banks

RayC4 (Virginia)
Posts: 173

Posted:

Quote:

Posted By MelissaP1 on 03/24/2015 1:10 PM
If you have homeowner's who share a common element be it utilities, sewage, or pond it is still a form of a HOA.

Except that there are no "common elements." The developer is forming a mini-utility company and homeowners contract with that entity for water & sewer.

I'd rather have the protections incorporation offers. Plus the fact that if someone owes money, I want the right to use legal means to collect it.

If a neighbor is late with payments, it's the utility company's problem, not anyone else's.

It makes you unable to collect debt owed. Leaving the only option to sue.

There will be no debts since there is no HOA and nothing to charge for. The utility company's charges are collectible in the same fashion as the County municipal water authority collects their late payments etc.

you all still will be acting as one but with lots less collection ability and control.... but you don't let the kids run the candy store either.

No, the owners will be acting independently. There is no HOA, and there is no candy store to be run.

RayC4 (Virginia)
Posts: 173

Posted:

Banks, glad to share (though we'll probably bore others out of their minds...)

The developer will form an (corp.) entity that is required to provide (well water and sewage) services to the entire subdivision whose occupants are in turn required to procure those services from the entity. (Hence, "requirements contract")

The new entity is totally responsible for the proper services (e.g. certain PSI, etc), maintenance & repair, and future facilities expansion. Water will be metered to the house and owners will pay 1) a base rate (i.e. electricity, insurance, RE taxes, licensed inspections, capital reserve line item), plus 2) a water usage rate (metered) indexed to published rates in our state. As more homes are built, the base rate will decrease accordingly. No other charges may be assessed current homeowners. (We suspect the developer will charge new owners a 'connection fee' but that is between him and prospective lot purchasers. Too outrageous a connection fee and buyers will go elsewhere.)

Complete transparency of 'financials' is required per the settlement agreement. Collection procedures will be the same as the County uses for delinquent accounts. All state laws and health department regulations apply (and they will be watching closely).

The new entity will be granted an easement to the subdivision common space, since that is where the utilities infrastructure is located.

BTW, the above capital reserve line item was set initially at $1000/yr and will be adjusted annually based on the consumer price index.. Hope this helps.

BanksS
Posts: 403

Posted:

Quote:

Posted By RayC4 on 03/24/2015 5:20 PM
Banks, glad to share (though we'll probably bore others out of their minds...)

The developer will form an (corp.) entity that is required to provide (well water and sewage) services to the entire subdivision whose occupants are in turn required to procure those services from the entity. (Hence, "requirements contract")

The new entity is totally responsible for the proper services (e.g. certain PSI, etc), maintenance & repair, and future facilities expansion. Water will be metered to the house and owners will pay 1) a base rate (i.e. electricity, insurance, RE taxes, licensed inspections, capital reserve line item), plus 2) a water usage rate (metered) indexed to published rates in our state. As more homes are built, the base rate will decrease accordingly. No other charges may be assessed current homeowners. (We suspect the developer will charge new owners a 'connection fee' but that is between him and prospective lot purchasers. Too outrageous a connection fee and buyers will go elsewhere.)

Complete transparency of 'financials' is required per the settlement agreement. Collection procedures will be the same as the County uses for delinquent accounts. All state laws and health department regulations apply (and they will be watching closely).

The new entity will be granted an easement to the subdivision common space, since that is where the utilities infrastructure is located.

BTW, the above capital reserve line item was set initially at $1000/yr and will be adjusted annually based on the consumer price index.. Hope this helps.

Ray,
Thanks for the explanation. I believe Iowa law would prohibit such an entity in my situation and even if it were possible I don't see that anyone would be interested in taking this on. I'm afraid I may be stuck with what we have but will propose to the board that they do a reserve study and look at a revision of the fee structure.

I certainly hope it works out well for you. Thanks again.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

So a HOA of another name and $418K to get there... Mmm... Money well spent?

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Amanda

You say:

I'm glad to see that the courts finally saw the declarant for what he really was.

How can you accuse the declarant of being good, bad, or indifferent without any information more then one persons postings? In your mind are declarants always the bad guys?

AmandaR2 (South Carolina)
Posts: 566

Posted:

Quote:

Posted By JohnC46 on 03/25/2015 5:34 AM
Amanda

You say:

I'm glad to see that the courts finally saw the declarant for what he really was.

How can you accuse the declarant of being good, bad, or indifferent without any information more then one persons postings? In your mind are declarants always the bad guys?

Oh no, John don't be silly. You're over thinking my comment.

AmandaR2 (South Carolina)
Posts: 566

Posted:

Quote:

Posted By RayC4 on 03/24/2015 11:06 AM

Melissa, the buyout is of course a one-time thing. The $18K is lunch money when you consider that the amount is split equally among the homeowners as part of a formal settlement and Court order. (There's no "getting everyone to pay" about it, unless someone prefers jail time.)

There is no more HOA. All previous HOA 'debts' are set to zero, and the declarant's attorney will 'unfile' any lien issues.

Regarding any 'big picture,' the homeowners had little choice here but to divorce themselves from an abusive declarant (who at one time was budgeting REGULAR monthly assessments per homeowner of $1300.00 in a subdivision with no amenities.) Owners will no longer deal with liens, violation notices, debt warrants, special assessments, and the like. He's no longer HOA Director because there is no longer an HOA.

As for the utilities, the homeowners end up paying for service in amounts comparable to other county residents. But the w/s service will be done properly and professionally (which was not the case previously).

Bottom line, the owners are 'out from under' this individual. He remains the developer, but he has lost power over the lives of the owners. The owners are partying, but we have all learned some expensive lessons.

I have no reason to believe Ray is lying, do you JohnC? It seemed like he was simply sharing an experience with us, I commented on how I viewed it.

RayC4 (Virginia)
Posts: 173

Posted:

Thanks, Amanda. You read it correctly. I wasn't looking for accolades because the homeowners 'got over' on the Declarant. We didn't. By definition, a settlement agreement means there are concessions on both sides, and that was the case here as well.

The post was for 'informational purposes' only -- albeit maybe a cautionary one. What's that old saw? The only folks who 'won' here were the attorneys....

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I am hoping people see the results as they are. Which sound "Utopian" compared to what they perceived they had. A bad Declarant and being overcharged. However, if you truly read the results they got... They are NOT doing much different for themselves if not made it worse.

They eliminated their HOA at what costs and continued expense? Their Developer still has a hold which makes them still have to pay for a utility. A utility now NOT incoprorated by them the owners now former HOA members. Incorporation offer many protections and allows enforcements of operations. They will not have insurance to protect themselves. The developer will be protected as a corporation instead.

They eliminated the outstanding liens? What was that purpose for? If the people owed money in the form of unpaid dues, then they just eliminated any money that would be available in their budget. They essentially wiped out all debts making all the members to pick up the bill. Plus they do not want to enforce the ability to collect but let people face jail time instead? It says they MUST pay their fair share of 18K or face jail... Mmmm I would rather face a lien would you not than jail?

Sorry but this does NOT sound like a victory but a horse of another color... It may even be worse and put everyone deeper in a hole. I foresee a mass exodus at collection time. Why would a new owner pay into the 18K owed if it is the previous owner debt? Seems selling the home is best option to get out of paying the legal costs and jail time. Meaning home values are going to take a hit as people walk away in foreclosure or short sell... So much for protecting your assets and home values...

Former HOA President

JonD1
Posts: 2,350

Posted:

This is what you end up with when you leave the decision making to the courts.

Sounds twisted, confused, overlapping and co-mingled if you ask me.

Like many new policies or procedures give it a year or two for those involved to determine good, bad or indifferent.

Sounds like a mess when a clean, complete cut would have been best for all.

Dissolving an HOA might not be all that east or desirable in some cases this might be one of those cases.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By AmandaR2 on 03/25/2015 6:23 AM

Posted By RayC4 on 03/24/2015 11:06 AM

Melissa, the buyout is of course a one-time thing. The $18K is lunch money when you consider that the amount is split equally among the homeowners as part of a formal settlement and Court order. (There's no "getting everyone to pay" about it, unless someone prefers jail time.)

There is no more HOA. All previous HOA 'debts' are set to zero, and the declarant's attorney will 'unfile' any lien issues.

Regarding any 'big picture,' the homeowners had little choice here but to divorce themselves from an abusive declarant (who at one time was budgeting REGULAR monthly assessments per homeowner of $1300.00 in a subdivision with no amenities.) Owners will no longer deal with liens, violation notices, debt warrants, special assessments, and the like. He's no longer HOA Director because there is no longer an HOA.

As for the utilities, the homeowners end up paying for service in amounts comparable to other county residents. But the w/s service will be done properly and professionally (which was not the case previously).

Bottom line, the owners are 'out from under' this individual. He remains the developer, but he has lost power over the lives of the owners. The owners are partying, but we have all learned some expensive lessons.

I have no reason to believe Ray is lying, do you JohnC? It seemed like he was simply sharing an experience with us, I commented on how I viewed it.

Amanda

Please do not put words in my mouth nor use the old simplistic question of do you still beat your wife. I said that only hearing one side of the story does not make for making a fair judgement.

RayC4 (Virginia)
Posts: 173

Posted:

Quote:

Posted By MelissaP1 on 03/25/2015 11:20 AM
Their Developer still has a hold which makes them still have to pay for a utility.

They eliminated the outstanding liens? .... then they just eliminated any money that would be available in their budget......making all the members to pick up the bill.

Why would a new owner pay into the 18K owed ...

Melissa, I'm puzzled as to why this tale struck such a nerve with you. But, trust me, you're imagining dire scenarios that have no basis.

It is true we have to pay the developer's new 'mini-utility' for services described above. But just how is this different from, say, you paying your electric provider?

Re the liens issue, there is no budget anymore. There's nothing to be 'budgeted.' There is no bill for the members to 'pick up.' (And lest we forget, there are no more members.)

The $18K 'buyout' (again as mentioned above) is one-time and immediate, shared by the current homeowners who are all party to the agreement. Future "new owners" have nothing to do with this. What the settlement DOES mean, of course, is that the 5 year old litigation is kaput, and current owners will now be able to sell their properties. For five years this was impossible with lawsuits, liens, debt warrants, etc flying all over the place.

"Utopia" it isn't -- I grant you that. But what is? The owners here made a clean break from this fellow, and he got to keep his remaining lots (something that would have been in jeopardy in a trial proceedings imo).

JonD1
Posts: 2,350

Posted:

Ray I would have preferred a clean and complete separation not having any remaining connection to the declarant I wanted out from under.

Just how long is the declarant required to supply these services? At what cost? And who controls their charges?

Might take some time to work the kinks out and determine just how good or bad this "solution" was.

Be careful what you wish for you just might get it.....

JonD1
Posts: 2,350

Posted:

Quote:

Posted By JohnC46 on 03/25/2015 12:42 PM

Posted By AmandaR2 on 03/25/2015 6:23 AM

Posted By RayC4 on 03/24/2015 11:06 AM

Melissa, the buyout is of course a one-time thing. The $18K is lunch money when you consider that the amount is split equally among the homeowners as part of a formal settlement and Court order. (There's no "getting everyone to pay" about it, unless someone prefers jail time.)

There is no more HOA. All previous HOA 'debts' are set to zero, and the declarant's attorney will 'unfile' any lien issues.

Regarding any 'big picture,' the homeowners had little choice here but to divorce themselves from an abusive declarant (who at one time was budgeting REGULAR monthly assessments per homeowner of $1300.00 in a subdivision with no amenities.) Owners will no longer deal with liens, violation notices, debt warrants, special assessments, and the like. He's no longer HOA Director because there is no longer an HOA.

As for the utilities, the homeowners end up paying for service in amounts comparable to other county residents. But the w/s service will be done properly and professionally (which was not the case previously).

Bottom line, the owners are 'out from under' this individual. He remains the developer, but he has lost power over the lives of the owners. The owners are partying, but we have all learned some expensive lessons.

I have no reason to believe Ray is lying, do you JohnC? It seemed like he was simply sharing an experience with us, I commented on how I viewed it.

Amanda

Please do not put words in my mouth nor use the old simplistic question of do you still beat your wife. I said that only hearing one side of the story does not make for making a fair judgement.

Seems when her posts get her into trouble Amanda likes to bring into question the motives of those asking for a clarification.

Amanda seems to think she gets to pass judgement on whether what people post is accurate or not the rest of us should abide by her views.

Suddenly, you were trying to suggest Ray is not telling the truth. When you simply were stating no one knows the other side.
So Amanda decides and everyone has to agree.

So therefore you have to be wrong.

Simple thought process while deflecting your own comprehension limitations.

Lesson more and post far less........You can't learn when your mouth is constantly moving.

KerryL1 (California)
Posts: 14,550

Posted:

I didn't read your remark as suggesting that Ray was lying either, JohnC. No idea why Amanda thought so. Just saying' ; )

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I think your still seeing this through "Rose colored glasses". The reality is going to set in and set in soon. The reality stating that no could sell during the lawsuit process. What do you think now is going to happen? If I was an owner, I would now put up my house for sale and say "screw paying my portion of the 18K". How you going to make me collect? That portion I owe the new owner is not responsible for. Who is even collecting this money for the 18K? What happens when someone doesn't pay their portion? Seems to me, since you all are against liens for money owed, your not going to lien the person for their portion. You going to sue them for it? Ain't that more money to collect to sue? Plus the person can sell their home and basically disappear?

The developer can incorporate themselves on this utility deal. Which guess what? Provides them with even MORE power than they had before. When incorporated they have certain personal protections. You can't sue them personally. You have to sue the incorporation. Which is insured. Plus since your no longer an HOA, the lawsuit is now done on an individual basis unless you all class act it.

There were other ways around this issue that you all did not take. You did some real damage that you don't even see yet. Mortgage companies aren't blind to all this litigation. Made your property a higher risk. Which increased your rates for refinancing and can effect offering of loan packages such as FHA.

Sorry but by removing your HOA corporate structure puts every at risk on an individual level versus protection as a whole. Next time I would do more research on what a HOA actually means before going after it so aggressively. You may find out by not having one is NOT a good thing...

Former HOA President

BanksS
Posts: 403

Posted:

Melissa,

Let it go hon. It's now just like any neighborhood without an HOA except that the water/sewer is provided by the developer. The developer has restrictions that were agreed to in the settlement in what he can charge the owners for that service. I personally don't see any risk here. There are millions of neighborhoods in this country without an HOA and they manage to function without one.

Chill, relax, take a deep breath. Ray seems fine with it and that is what matters.

AmandaR2 (South Carolina)
Posts: 566

Posted:

Quote:

Posted By JohnC46 on 03/25/2015 5:34 AM
Amanda

You say:

I'm glad to see that the courts finally saw the declarant for what he really was.

How can you accuse the declarant of being good, bad, or indifferent without any information more then one persons postings? In your mind are declarants always the bad guys?

It was you John, that provoked my response. You seemed to be putting words in my mouth not the other way around.

Maybe you guys didn't pick up on that. ;)

But it's beside the point and we really should stay on topic don't you poster with so many years in think?????

AmandaR2 (South Carolina)
Posts: 566

Posted:

JonD,
While all your attention is flattering, you are wasting your time because what you say does not bother me on a personal level in the least. So please don't address me in your post's because your only disrespecting the OP, and that's not fair. I won't mention your name so please do not continue to harass and call me out personally.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I don't have dog in this hunt... However, to say that suing your HOA is worth it and then post the results as if it were needs another look. It does not look like the owner's realize when they got what they wished for, that they got what they wished for...

No problem with them having a sewer/utility set up. The problem is that it's NOT their sewer/utility setup under their own corporation. Which the HOA would have provided. Instead, they put the developer back in charge of setting it up. The very person they were trying to get rid of. It now allows the Developer to set it up under HIS own corporation. Not favorable for the owners... Who could have instead kept the HOA for the purpose of utility/sewer.

Seems to me, paying out $418K over 5 years of lawsuits just to end up with this kind of deal? Not optimal and more like a Peric Victory... Is that really worth suing for?

Former HOA President

AmandaR2 (South Carolina)
Posts: 566

Posted:

Quote:

Posted By KerryL1 on 03/25/2015 2:13 PM
I didn't read your remark as suggesting that Ray was lying either, JohnC. No idea why Amanda thought so. Just saying' ; )

Kerry, I would like to address something directly with you, you many times have posted disgust when other certain posters (myself included) go "off topic" yet it is okay for you to post comments that are not on topic yourself when you choose? to people that you do not like? (just sayin)

BanksS
Posts: 403

Posted:

Quote:

Posted By MelissaP1 on 03/25/2015 3:53 PM

No problem with them having a sewer/utility set up. The problem is that it's NOT their sewer/utility setup under their own corporation.

Why do you perceive this as a problem? I get my water from a large water utility, electricity from a co-op, and gas from a gas company and garbage from a private company. My problem is that the HOA is providing the sewer service and it's been a nightmare. It would be much better out of the hands of the HOA and I would think much less complicated for the HOA.

The developer has to provide w/s service for Ray's neighborhood which means billing, collecting, maintenance. In my state these things are heavily regulated. The developer will be responsible for all of the state and federal environmental laws pertaining to w/s as well. These can be very complicated.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Banks

I believe what people are questioning/wondering is if the developer was so "heavy handed" that people wanted to break away from him, what is preventing him for being heavy handed for water and sewage?

In many ways, I do not see how they "broke" away.

RayC4 (Virginia)
Posts: 173

Posted:

Quote:

Posted By JohnC46 on 03/25/2015 7:25 PM
Banks

I believe what people are questioning/wondering is if the developer was so "heavy handed" that people wanted to break away from him, what is preventing him for being heavy handed for water and sewage?

JohnC, that ;prevention' is twofold:

1) as Banks points out, providing water utility services is a highly regulated operation. The state health dept did not look kindly at this situation and were reluctantly pulled into the litigation kicking and screaming. My point is -- they will be watching this guy like a hawk.

2) As I detailed above, the water rates will be controlled by 'external' factors (e.g. cpi, County procedures, published rate indexes for our state, etc). You have to remember that this was a settlement agreement signed off on by all the homeowners. I concede my wife and I may be idiots, but what are the odds that ALL the homeowners here are also idiots? Trust me, they wouldn't sign on to anything that allowed this developer any 'control' over them. Nor would our attorneys.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Ray

How much do you think that your community saves each year under the new arrangement?

Think that information would help put the $200k that the association spent in perspective.

Sikubali jukumu. Read all posts at your own risk.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By RayC4 on 03/25/2015 8:30 PM

Posted By JohnC46 on 03/25/2015 7:25 PM
Banks

I believe what people are questioning/wondering is if the developer was so "heavy handed" that people wanted to break away from him, what is preventing him for being heavy handed for water and sewage?

JohnC, that ;prevention' is twofold:

1) as Banks points out, providing water utility services is a highly regulated operation. The state health dept did not look kindly at this situation and were reluctantly pulled into the litigation kicking and screaming. My point is -- they will be watching this guy like a hawk.

2) As I detailed above, the water rates will be controlled by 'external' factors (e.g. cpi, County procedures, published rate indexes for our state, etc). You have to remember that this was a settlement agreement signed off on by all the homeowners. I concede my wife and I may be idiots, but what are the odds that ALL the homeowners here are also idiots? Trust me, they wouldn't sign on to anything that allowed this developer any 'control' over them. Nor would our attorneys.

Ray

Do not put words in my mouth. I never said nor implied any of you were idiots.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

No one here is indicating anyone is an "idiot". We are saying there is another perspective to look at the situation. The old saying "You can't see the forest for the trees" sometimes applies. Ya are still in the woods looking at the field of light just outside... Some of us are in that field already and seeing the results when you come out...

I am NOT indicating what has occurred is wrong for your situation. It's just that the perception of your situation may not be as you think it is...

Former HOA President

AmandaR2 (South Carolina)
Posts: 566

Posted:

I don't understand what's going on in this thread. IMO it just seems like Ray was stating what happened in his neighborhood. I thought he just was doing that so maybe someone going through a similar situation can see there were both positive and negative results. He and his neighbors seem content but it came at a cost. IMO in the end all that matters is it works for them.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Ray posted saying the advice "Suing your HOA is suing yourself and your neighbors" may not be valid. That their results are to indicate that it is worth spending the money on a lawsuit. They got X results because of their 5 year effort and thousands dollars of legal costs.

I am posting that the results are not necessarily a "victory". That suing your HOA is still best done in the context of having a valid solution/result in mind as a GROUP in the end. The results of this lawsuit don't necessarily reflect what seems as a planned out result. It's the result they got. Which isn't necessarily in their best interest long term.

Red flags popped up as stating getting rid of their HOA. Which ended their corporate protections as owners. Allowing their developer to yet again form their own corporation to manage utilities/sewer gets them right back where they started. Doing a "Buyout" amongst each other is going to be a HUGE collection feat. Eliminating liens? Mmmmm....

I am glad Ray posted his information. I think it shows what results can happen when you decide to sue your HOA. It's just you may need to have a different perspective on the results so you can handle the results. Which I think the owner's will find out when they try to collect that 18K buyout...

Former HOA President

RayC4 (Virginia)
Posts: 173

Posted:

Quote:

Posted By MelissaP1 on 03/26/2015 7:35 AM
Doing a "Buyout" amongst each other is going to be a HUGE collection feat. I think the owner's will find out when they try to collect that 18K buyout...

Melissa, I think I've stated several times that the $18K is part of a COURT ORDER. There will not be any gnashing of teeth on the part of the homeowners (or anyone else) over "collection problems." Anyone deciding not to pay will deal with the Circuit Court Judge who issued the order.

I respect your opinions on this forum. But for some reason you won't acknowledge the facts I've offered so it's time to invoke cloture with you on this.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Sorry but I think people who are gung ho in eliminating their HOA does not see the bigger picture. Good luck... I think you all will find in the next year that things will drastically change... All of your own making...

Former HOA President

RayC4 (Virginia)
Posts: 173

Posted:

Quote:

Posted By JohnC46 on 03/26/2015 6:12 AM

Posted By RayC4 on 03/25/2015 8:30 PM

Posted By JohnC46 on 03/25/2015 7:25 PM
Banks

I believe what people are questioning/wondering is if the developer was so "heavy handed" that people wanted to break away from him, what is preventing him for being heavy handed for water and sewage?

JohnC, that ;prevention' is twofold:

1) as Banks points out, providing water utility services is a highly regulated operation. The state health dept did not look kindly at this situation and were reluctantly pulled into the litigation kicking and screaming. My point is -- they will be watching this guy like a hawk.

2) As I detailed above, the water rates will be controlled by 'external' factors (e.g. cpi, County procedures, published rate indexes for our state, etc). You have to remember that this was a settlement agreement signed off on by all the homeowners. I concede my wife and I may be idiots, but what are the odds that ALL the homeowners here are also idiots? Trust me, they wouldn't sign on to anything that allowed this developer any 'control' over them. Nor would our attorneys.

Ray

Do not put words in my mouth. I never said nor implied any of you were idiots.

JohnC, my apologies. Those were entirely my words, not yours, and were intended to (badly) dramatize the point that the multiple homeowners involved gave this serious situation much thought before 'signing on.'