Lawsuit on lack of services could bankrupt HOA

Navigation

Lawsuit on lack of services could bankrupt HOA

Submitted by Admin on Wed, 06/04/2008 - 10:43am. Living The HOA Way

By Drew Houff | The Winchester Star

CROSS JUNCTION — If the plaintiffs win their lawsuit, Lake Holiday may go bankrupt — because the gated community in northern Frederick County would no longer be able to collect assessments on its 2,700 residential lots.

That’s the view of Wayne Poyer, president of the board of directors of Lake Holiday Country Club Inc., the association that oversees the development.

Poyer said the lawsuit — brought by some Lake Holiday property owners who say the association does not offer adequate services — challenges his organization’s right to collect assessment fees.

A scheduling hearing is slated for July 3 so that attorneys for the opposition — led by lead plaintiff Mildred B. Bemis of Oakton, who owns property at Lake Holiday — and the Lake Holiday Country Club Inc. can select a date for proceedings to continue.

The numerous plaintiffs in the case filed the lawsuit in Frederick County Circuit Court last August. They are seeking repayment of assessment fees because some promised services allegedly were never provided by Lake Holiday Country Club Inc.

Poyer said his organization’s right to collect assessment fees from property owners is specified in the Virginia Property Owners Association Act.

"We’ve been using the act as the underpinning of our operation," he said. "As defined under that act, our right to collect assessments is how we have money to operate."

Frederick County Circuit Court Judge John R. Prosser ruled on April 25 that all lot owners at Lake Holiday are necessary parties to the case, and were required to be joined as defendants in the lawsuit.

Poyer said the lot owners who are not plaintiffs in the case are being defended by one of two associations: Friends of Lake Holiday, represented by attorney Robert T. Mitchell Jr.; and the Alliance to Save Lake Holiday, represented by attorney Mark E. Stivers.

Individual property owners may present any filings to be considered in the case by June 16 — the first business day after the 50 days stipulated in the notification that the defendants received from the Circuit Court.

Poyer said winning the lawsuit is crucial for the association and the property owners it serves.

"If the judge were to grant all of the motions in the complaint, we could no longer exist in our current form," he said. "We would be bankrupt if we have to pay back the assessments."

Poyer said such a ruling also would mean that the homeowners would have to find ways to pay for services at Lake Holiday, since Lake Holiday Country Club Inc. would no longer be allowed to operate as a statutory property owners’ association.

Some of those services include road repairs, operation of a community clubhouse, and snow and ice removal.

"I hope we do win," Poyer said. "I know we will find a way to protect all of our property owners."

In a telephone interview on Tuesday, Bemis said the lawsuit is trying to protect the interests of the plaintiffs who have gone unserved by the association for a number of years.

She said she and her husband bought property at Lake Holiday more than 30 years ago.

"We were young when we bought the land, and we planned to live there," Bemis said. "When we bought land, we were told that we would have water and sewer service in two years. Now, many years later, my husband has died, and I still don’t have water and sewer."

The association is not directly responsible for Lake Holiday’s water and sewer services. It sold the utility to Aqua America of Bryn Mawr, Pa., more than a year ago.

"I have to pay taxes on the land, and I pay the assessment because if I don’t, they will come after me," Bemis said "I don’t need that."

She lamented that she pays the association’s assessment without receiving its services — while many other residents of Lake Holiday receive those services.

"I don’t get any of the privileges they do," Bemis said. "We are assessed, but ... I don’t have gates guarding my place, and I don’t use the clubhouse.

"We shouldn’t have to pay this assessment if we aren’t receiving services. That’s why we have sued the board — everyone should be treated equal."

Bemis said she didn’t plan for all of the landowners at Lake Holiday to become either defendants or plaintiffs, but the lawsuit is designed to help bring attention to her property.

"I figure I was not any worse off [with the lawsuit]," Bemis said. "We were promised water in two years when we bought the lot in the 1970s."

Source

» email this story |

Lake Holiday suffers from

Submitted by Sickofthisplace (not verified) on Fri, 06/06/2008 - 10:41pm.

Lake Holiday suffers from severe mismanagement. In a 2 ½ year period, the Board spent over 1 Million in legal fees in a community of 700 homes. Lake Holiday is getting ready 4-5 Million dam repair bill, and wasting so much money on lawyers is completely irresponsible! Another low point, a Lake Holiday committee member sent around a 5 page letter mocking another member’s handicap. Unfortunately, the same small group seems to retain control of the HOA board, and nothing seems to ever change at the place.

As a bit of background, I purchased a membership lot for almost $10,000 in 1975. I am still waiting for utility service to my lot. Can you believe that? Without utility service my lot is worthless. The Lake Holiday HOA owned until just recently owned the utility company providing water and sewer. The HOA and it’s President promised getting the utilities to me and probably hundreds of other lot owners. They have collected millions of dollars from people like me based on the false promise that they would use these funds to improve roads and provide utilities. I have heard numerous times at meetings that the Board was developing a plan to extend the utility lines but nothing has ever happened.

In 2002, the President of the Association said that selling the Lake Holiday Estates Utility Company required a membership vote but a membership vote was never taken on the Utility sale. Then in 2006, the HOA sold the utility built with my dues. After the sale was final, the HOA said they had no responsibility for the utilities and used the proceeds of the utility sale to build a new $1.2 million clubhouse.

My lot sits two lots away from a home with existing utility service. Last year, I learned about an important rule in the utility company’s tariff called, Rule 16. This rule has been in place for over 30 years and the accepted method by the SCC to extend utilities to the membership lots at Lake Holiday. This rule was concealed from me and all membership lot owners. The President of the Association tried to remove it without even sending me a notice about the change. I learned about this rule not from the Lake Holiday Board but another property owner. I would have made a formal Rule 16 request decades ago. I was tricked into waiting and waiting for Lake Holiday to extend utilities to my lot. Unfortunately, this community has been plagued with endless mismanagement and these problems never seem to get resolved and just keep piling up.

In January of 2008, the Virginia Supreme Court ruled that the authority to collect dues has to be in the deed to your property, but in many sections at Lake Holiday there’s absolutely no requirement in the deeds to pay dues. Lake Holiday was advised of this problem with the deeds by their lawyers but ignored the advice and collected millions in dues anyway. Like a scared bunny, President Wayne Poyer is making the rounds of the local media outlets shouting going bankrupt to anyone that will listen. He’s so concerned about the place going bankrupt that he’s not making any attempt to settle the case - not believable! He’s going to take his chances in court. He’s going to take his chances against 3 recent Supreme Court rulings? This whole mess about the dues was created by the Board. They didn’t honestly explain to members about the problems with the deeds and people are sick of their endless lies and mismanagement!

This place is one big mess.

» reply | email this comment | quote |

This HOA is run by the 600

Submitted by LH00009 (not verified) on Tue, 07/08/2008 - 8:04am.

This HOA is run by the 600 homeowners but there's over 1000 vacant lot owners. The homeowners treat the vacant lot owners (lot owners waiting for over 30 years for utilities) like crap. Vacant owners have paid millions to the HOA in dues. Now there's a question a lawsuit about whether the millions in dues were collectible in the first place. The millions in dues built a flashy clubhouse for the homeowners. Our millions in dues also lowers the cost of trash for residents, the pretty 4th of July fireworks, and on and on. We are trapped into paying and paying but never getting utilities to our worthless lots. We are not vacant lot owners but SAPS that pay a lot in dues for nothing!

» reply | email this comment | quote |

Can you provide me with the

Submitted by rlawso12296@ear... on Mon, 07/28/2008 - 1:21pm.

Can you provide me with the plaintiff's lawyers name? I am in a similar situation and I am trying to find a lawyer to represent me. I want to sue my HOA and one of my handicapped friends also wants to sue them for the same reasons you have stated above. All my current attorney wants to do is write letters and bill me. I want someone that will take action.

» reply | email this comment | quote |