DEERFIELD RESORT CONNECTION
January 26, 2024
Meeting with the Court Receiver
On December 15, 2023, there was a meeting between the parties to the HOA litigation. This meeting included teams from the Plaintiffs and Defendants, counsel for both sides, and Mr. Reams, the Receiver. This meeting’s purpose was to coordinate the process for transition from a developer-directed HOA to an owner-directed HOA as ordered by the court in Spring 2021.
The meeting led by the Receiver, included the topics below, introduced and guided by the Receiver.
Definition of Boundary of Deerfield Resort: In order to determine eligibility to run and vote for the Board of Directors, the boundary of Deerfield Resort was discussed to identify lots that are included within the Resort. Under Tennessee law, the Deerfield Resort HOA is a mutual benefit corporation, which means it is a membership organization. The basis for HOA membership is ownership of a lot within the community. The Receiver asked the Defendants to define the boundaries – preferably through a legal description and associated map.
Communication with Homeowners: Mr. Reams explained that he requested and expected a list of homeowners in October 2023 but has not received it. Consequently, this delayed his ability to send out letters to lot owners to explain his role in the transition, the board nomination and voting process, and send out 2024 HOA fee invoices. He wanted to send this information in the fall to prevent any potential disruption in HOA service caused by a delay in the timely collection of fees. But he could not communicate with property owners without the list to be provided by the Defendants. The Defendants said that the list was available and that they could provide it to him by Monday, December 18, 2023.
2024 Deerfield Resort HOA Dues: The Receiver had questions about the 2023 and 2024 HOA budgets, including capital projects completed or proposed, lot owners invoiced, and fees collected. He asked these questions in order to determine the appropriate 2024 fee level. He learned from the Defendants that there was no budget for 2023 or 2024, that all lot owners had not been invoiced, and no capital projects have been undertaken or were planned for 2024. He asked when the 2024 budget could be ready. The Defendants said that they could provide it by Monday, December 18, 2023. Again, he explained that he needs the list of homeowners, in excel format, to enable him to send out invoices for the 2024 HOA dues.
HOA Fee Income Oversight: During the meeting, Mr. Reams suggested varying degrees of 2024 fee collection oversight ranging from his holding and managing the account and forwarding funds to the Defendants on a month-by-month basis based on appropriate documentation, to the establishment of a separate account, under the existing federal tax identification number of Deerfield Resort Homeowners Association, which he will monitor.
Election Process: Mr. Reams indicated he believed the election process had been defined and agreed to by the parties, and he said that he intends to use the online service, Election Buddy, to collect and tabulate votes. The convenience enables residents to vote from where they happen to be at the time of the annual meeting. Once he has the list of owners, he will communicate the board nomination and election process to all residents.
At the outset of the meeting, all understood the need for a series of meetings to move the transition forward. Subsequent to the meeting, the Defendants communicated that they will not participate in future meetings.
As of January 19, 2024, supporting documentation requested by Mr. Reams has not been provided, including boundary map with legal description, amendment of restrictions to include commercial properties identified by reference map and parcel numbers, identified timing for transition from developer-directed HOA to owner-directed HOA, preparation and provision of 2024 budget, the total number of parcels within Deerfield Resort – including number of lots that are vacant and/or have structures, and a current list of owners in excel format for the election process.
Please note that none of the topics listed above have been resolved. Mr. Reams explained that he will not undertake action on behalf of Deerfield Resort HOA that is not approved by the court first. This means that he will submit motions to the court for approval prior to undertaking tasks on behalf of the HOA.
Updates will continue to be provided as the process moves forward.