Shared by Deborah Goonan, Independent American Communities
Bulk rate telecommunications contracts are a pet peeve of many homeowner, condo, and cooperative association residents. Back when many of these communities were being planned, the developer often worked out a deal with one exclusive service provider. It might have made sense at the time – at least for the developer and the service provider – but now all owners and residents are stuck with one service, for better or worse.
In the case of various associations located in Tollgate Village, Bridgemore Village, and Canterbury subdivisions, there is now a class action lawsuit filed against developers for allegedly creating a monopoly for Crystal Clear Technologies, a provider that has a reputation for poor service.
This is an issue in many other states besides Tennessee. If you happen to live in an association with one of these prearranged service contracts, your monthly or quarterly fees will include your share of the telecommunications bill. If you want to use a satellite service or alternate internet service provider, you’ll have to pay extra for that. You cannot deduct the cost of the service you never use, because it is built into your assessments.
Not a good deal.
If this class action lawsuit is successful, I would expect many other Association Governed Residential Communities to file similar complaints.
For details, see the news release link provided below.
The Tennessean: Thompson’s Station residents sue over TV/Web service
A group of Thompson’s Station residents is suing developers and a telecommunications company they say schemed — along with DirecTV and their respective homeowners’ associations — to give the tiny Internet service provider a monopoly over their growing neighborhoods.
Attorneys representing the homeowners are seeking class action status for the lawsuit, which was filed in federal court on Tuesday.
It alleges that the developers of the town’s Tollgate Village, Bridgemore Village and Canterbury subdivisions made arrangements with Crystal Clear Technologies to be the neighborhoods’ sole Internet and TV-service provider.
Those arrangements, the complaint alleges, forced residents to pay above-market rates for shoddier service than they might have gotten directly from a larger provider.
According to the complaint, Carbine & Associates essentially controlled Crystal Clear — the two companies operated from the same business address and have the same registered agent.
At the time the agreements were made, in about 2006-07 Carbine also controlled the homeowners associations of its two neighborhoods, as is standard for a development in its early stages.
When residents signed their own agreements with the homeowners associations, they were required to pay for Crystal Clear Internet and TV services, locking them into the service regardless of whether they planned to use it, according to the lawsuit.
Meanwhile, the agreements also prevented homeowners from directly buying telecommunications services from another provider, the lawsuit alleged.
But although Crystal Clear was supposed to provide both TV and Internet services, the lawsuit alleged, the company ended up contracting out its TV service to DirecTV, wedging itself into a position as an unnecessary middleman.
Attorney Benjamin Gastel, who is representing the residents, said that the arrangement was odd and “crossed the line into illegality,” because it required customers to pay for a service, even if they didn’t plan to use it.
He estimated that there are about 1500 homes in the three neighborhoods affected. And new residents are still signing the agreements.