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 Deerfield News Connection

June 21,  2024

 

Court-appointed Receiver’s Efforts to Resolve Deerfield Resort Issues

 

On April 30, 2024, H. Scott Reams, the appointed Receiver for Deerfield Resort Homeowners Association, Inc., filed a motion seeking court intervention to address urgent issues affecting our resort community. These issues have been hindering the transition to an owner-controlled HOA. In his report, he outlined several key challenges and provided recommendations for resolving them.

 

Key Issues Highlighted

 

Since 1986, Fields Development Company has treated the HOA as a closely held entity, running its operations without community involvement. Following the 2021 court ruling ordering the transition of the Deerfield Resort HOA to owner control, the issues outlined below have significantly delayed progress to achieve community control of the HOA. 

 

  • Unclear and Conflicting Restrictive Covenants:  There are multiple conflicting sets of restrictive covenants for Deerfield Resort, lacking clarity on enforcing HOA membership and fee assessments. According to Mr. Reams, "All four sets of restrictions state that lots in Deerfield Resort are for residential purposes only, lots within the resort may not be further subdivided, and contain provisions that the developers could further amend the restrictions. The restrictions do not appear to contain enforceable provisions that would require membership in an HOA or permit an HOA to assess and collect fees or assessments from all residents." This situation hinders the establishment of a cohesive and functional HOA, undermining efforts to achieve community control and stability. For property owners, this directly results in confusion about their responsibilities, potential financial liabilities, and the stability of their property values due to inconsistent governance and enforcement of community standards. (Note: Within days of the submission of the report, Fields Development Company filed a fifth set of restrictions on May 2, 2024. See the 5th Amended restrictions filed by the Fields hereThis was done without notifying Mr. Reams, the Court, or the Plaintiffs.)

       

  • Undefined Resort Boundaries: Mr. Reams contends that although all sets of restrictions indicate they apply to "Deerfield Resort," the actual area encompassed within the resort has never been defined. There is no recorded plat for Deerfield Resort's boundary, and Paula Lejeune testified that the developers are still discussing which areas are included within the resort. This lack of a clear boundary definition makes it challenging to determine eligibility for HOA membership. Without clear boundaries, it is difficult to determine which properties are inside our community, who is a member, who can vote in elections, and who can use the resort's common areas. . This ambiguity can lead to disputes, negatively impact property values, and hinder the overall stability and cohesion of the community.

  • Financial Hurdles:  According to Mr. Reams, “The problems facing the Resort and property owners are significant, varied, and some are probably even unknown at this point.” Soon the HOA will become the owners of resort common areas, including recreation areas and a large private roadway network. However, the HOA lacks adequate financial reserves to manage these assets; and, as noted above, uncertainties persist regarding its ability to enforce mandatory fees or liens. There is an urgent need to identify all of the HOAs future assets and develop an understanding of the costs associated with those obligations. These financial uncertainties, compounded by the lack of building a reserve fund over the past 38 years, point to unknown financial obligations and potential unexpected special assessments, further affecting property values and quality of life.

  • Outstanding HOA Liabilities:  There are ownership and management issues surrounding Deerfield Water System LLC. In 2022, as the water system was listed by the Fields as being owned by the homeowner association, fines assessed by TDEC on the water system were against Deerfield Resort Homeowner Association, Inc. This raises questions about the true ownership of the water company and its assets, potentially impacting the HOA’s responsibilities and liabilities. Failure to clarify could result in property owners being held responsible for outstanding fines and liabilities assessed by regulatory bodies like TDEC.

  • Social Media:  Internal dissent, fueled by social media campaigns, further complicates community dynamics. Mr. Reams describes that some people “have taken to social media in an effort to influence the thinking of property owners in the Resort. Some of the posts that the Receiver has seen or that have been reported are misleading, if not totally inaccurate.” The Receiver aims to establish an election website for transparency, and to inform all property owners about the election process. Once restrictive covenants and bylaws have been approved by the court, he will oversee the election and communicate with all Deerfield Resort residents through this Deerfield Resort webpage.

 

                                     

Receiver’s Motion

 

Mr. Reams asked that the court order the actions as listed below.

 

  • Grant Receiver Broader Authority: Modify the order appointing the Receiver to provide sufficient authority to conduct the activities necessary to transition to an HOA-run resort, along with the duties and powers to order compliance.

 

  • Appointment of Advisory Community:  Establish an advisory committee to assist the Receiver. This committee would include the Receiver, one member appointed by the Plaintiffs, one by the Defendants, and two non-party members appointed by the Receiver, all subject to Court approval.

 

  • Establish Deerfield Resort Official Website:  Set-up an official website, initially supervised by the Receiver to communicate with Deerfield Resort property owners, and coordinate elections activities. 

 

  • Schedule for Transfer of Community Assets:  Establishing a timeline to identify properties within Deerfield Resort is critical for determining HOA membership. This step is essential to move the election process forward promptly and effectively, ensuring clarity and participation among residents. Additionally, common areas within the resort will be identified to facilitate proper management and maintenance under the HOA's oversight

 

  • Control of Restrictive Covenants:  Transfer the power and control over the restrictive covenants from Fields Development Company to the HOA.  

 

  • Payment of Delinquent Fees: Direct plaintiffs who are behind on their fees to pay them immediately into the HOA account managed by the Receiver. Currently, these fees are held by their attorney in a trust account. On June 6, Judge Boniface indicated that she wanted those funds paid to the trust account of Receiver Scott Reams, independent of Fields Development Company and supervised by the court. 

 

Call to Action for Deerfield Resort Residents

 

  •  Read the Receiver’s Report: Familiarize yourself with the detailed report to understand the scope and severity of the issues facing our community. Read the Report

  •  Attend the Court Hearing on Tuesday, June 25th. at 1:00pm:   If you would like to attend the hearing, it will be in the Chancery Court of Hamblen County, Tennessee, in the courthouse located at 511 W. Second North Street, Morristown, TN 37814. If you are unable to attend in person, here is the Zoom link (Meeting ID: 160 6300 814  Passcode: Boniface)

  •  Get Involved: Follow our webpage, read updates, share information with your neighbors, and voice your concerns. Your involvement is crucial in pushing for transparency and resolution.

Together, we can work towards a more transparent, functional, and vibrant Deerfield Resort. Your active participation is vital in making this happen. 

 

5th Amended CCRs filed by Fields Development Company, May 2, 2024

Amended CCRs Aug 2018

 

Amended CCRs Aug 2000

Amended CCRs Dec 1986

Original CCRs April 1985

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