Deerfield News Connection

April 1, 2024

 

Reshaping HOA Governance: Giving Homeowners a Voice

 

The court date is rapidly approaching this Tuesday, April 2, 2024, at 1:00 pm, where the following topics may be presented and touched on during the hearing.

 

Bylaws 

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One important aspect of forming a Homeowner Association (HOA) is the creation and filing of written documents explaining the formation and structure of the organization. At the outset, Fields Development Company, as the developer, would have been responsible for creating the Bylaws. To date, a set of Bylaws has never been created for the Deerfield Resort Homeowners Association.

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Why are Bylaws important? Homeowners Association (HOA) bylaws serve as the foundational governing document to outline the rights, responsibilities, and procedures for homeowners within the community and provide a framework for homeowners to participate in HOA affairs, such as attending meetings, voting on important issues, and serving on the board of directors. All things the homeowners of Deerfield have not been able to do in the past.  Without bylaws, homeowners lack clear guidance on how the HOA operates, how decisions are made, and how they can participate in the governance of their community.

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Bylaws are easily amendable once the newly elected Board of Directors is in place.  Board members will be able to take a survey or coordinate directly with homeowners in order to make changes based on homeowner feedback.  However, without Bylaws, the transition process is made more difficult for the Board and homeowners. A standard set of Bylaws created in advance of the transition helps by providing the process for homeowner participation during the transition process. Beginning with a standard set of homeowner Bylaws will enable the newly elected Board to coordinate with homeowners to take their input as to community

priorities. Without established mechanisms for resident involvement, homeowners are left without a voice in shaping their community's future.

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Why is the change in direction and tone perplexing? Despite the fact that a set of bylaws was developed by all parties (Defendant, Plaintiffs, and Court Receiver) and presented to the court in a June 2023 hearing as essentially completed, the Defendants are currently refusing to continue any further discussions on the Bylaws. 

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 Covenants, Conditions, and Restrictions (CCRs)

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During the initial development phase, a developer of a planned community drafts the Covenants, Conditions, and Restrictions (CCRs) to establish rules and regulations regarding property maintenance, architectural standards, land use, common area maintenance, and other aspects of community living. These CCRs are then recorded with the appropriate government authorities and become binding on all property owners within the community.

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Fields Development Company as developer of Deerfield Resort has never provided proper CCRs (Covenants, Conditions, and Restrictions); instead, they simply wrote restrictions that reinforce their control over the community. In fact, the Defendants/Developers state their desire to control the community in perpetuity with every amended restriction filed since 1985. They have done this without Deerfield Resort homeowners knowledge; thus, continually preventing the homeowners from having input in the management and maintenance of Deerfield Resort. With no conditions or covenants and only restrictions that preserve the Developer's power, it could be argued that the homeowners association lacks the necessary framework for balanced governance, potentially resulting in arbitrary decision-making, limited homeowner rights, and a lack of accountability. 

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The Defendants/Developer will only agree to minimal adjustments to the CCRs as they want to keep control of their ability to amend restrictions within Deerfield Resort after the Board is formed and the HOA is transitioned to homeowner governance. The court-appointed Receiver and the Plaintiffs do not agree with this scenario. The Receiver drafted a standard set of CCRs which protect the Deerfield Resort community, and the rights of the developer to develop their remaining properties. But the Fields have rejected those CCRs and insist on keeping the sole right to amend the CCRs. Both the Receiver and the plaintiffs have rejected this unreasonable demand.

 

Why does this matter? This is a conflict of interest that could lead to decisions that benefit the developer at the expense of the community's well-being or property values. If the developer maintains control over the CCRs, homeowners will have limited autonomy and may find themselves restricted in their ability to make changes or decisions about their properties or community without developer approval. In fact, these restrictions have been complicating the transition process from developer to homeowner control, as homeowners are struggling to assert their rights and gain full control over the governance of their community. 

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Mediation Settlement Agreement 

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The mediation settlement, agreed to by both parties and signed by the judge in December 2023, listed three financial terms. First, the Plaintiffs pay their security and maintenance fees for 2020 through 2023. Secondly, the Defendants pay their security and maintenance fees for 2020 through 2023. Thirdly, the Defendants pay $160,000 towards Plaintiffs attorney’s fees.

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• The Plaintiffs have paid the total owed and that amount is currently being held in a trust account by the Plaintiff’s attorney. Those funds are not being sent to the Defendants because, as admitted by the Defendants in depositions, they have commingled funds with Fields Development Company and other of their business ventures. The Plaintiffs want their HOA fees to be used solely for Deerfield Resort Homeowners Association purposes.

 

• The second financial responsibility in the mediation settlement is for the Defendants to pay their security and maintenance fees for 2020 through 2023. To date, the Plaintiffs' attorney has not received any confirmation of payment of these fees.

 

• Lastly, the Defendants delivered a check to the Plaintiff’s attorney for the $160,000 for attorney’s fees and it was returned by their bank, twice in one week. This may be because of insufficient funds, improper or unauthorized signature, or other reasons. This is consistent with a history of returned checks found in financial records provided by the Defendants.

 

We welcome all homeowners within the Deerfield Resort community to attend the hearing scheduled for April 2, 2024, at 1:00 pm at the Campbell County Courthouse in Jacksboro. There is also a Zoom option, with the link provided below.

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https://www.zoomgov.com/j/16063008147?pwd=TTlIdFI2MGRhK0p0WkdSSVRPcnhHUT09

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MEETING ID: 160 6300 

PASSCODE: Boniface