IN Judge rules in favor of HOA, says City of Charlestown’s fines are unconstitutional

Judge agrees with HOA’s complaint that City of Charlestown acting in collusion with private developer

 

By Deborah Goonan, Independent American Communities

 

I have been following reports from Charlestown, Indiana, for more than three years. That’s how long Mayor Bob Hall has been working on his grand redevelopment plan for the city.

It all started with declaring the neighborhood “blighted.” And some of the homes were in bad condition. But many of them were still in good condition – and remain so to this day. Although Pleasant Ridge neighborhood homes are small, decades old, and somewhat outdated, many are still clean, comfortable, and affordable for those who own or rent them.

For more than three years, the City of Charlestown has been issuing code violations and hefty fines to owners of homes in Pleasant Ridge. But on Monday, Clark County Judge Jason Mount agreed with the Pleasant Ridge HOA – a neighborhood association organized to fight against eminent domain – that those fines were both excessive and arbitrary.

The Judge agreed that the city has been unfair in enforcing its housing codes. The evidence shows that developer John Neace has acquired multiple Pleasant Ridge properties in poor condition, only to board them up and even rent some unsafe homes to tenants, without ever taking action to cure multiple housing code violations.

In the meantime, the city was charging owners other than Neace hundreds or thousands of dollars per day for apparently trumped-up violations. According to court records, it was all an effort to force owners to sell their homes to Neace, so he could move forward with razing the entire neighborhood for redevelopment.

Attorneys with Institute for Justice have been working on this case pro bono since at least 2014. And they have been able to encourage homeowners in Pleasant Ridge to organize a neighborhood homeowners’ association for the purposes of protecting their property rights against the City of Charlestown and Neace’s company, Pleasant Ridge Development, LLC.

Reader take note that the Pleasant Ridge Neighborhood Association is an entirely different type of HOA than the ones I normally write about here on IAC. It is a voluntary neighborhood association created of, by, and for residents of the neighborhood. There are no mandatory assessments or fees in Pleasant Ridge, and no volunteer HOA board enforcing onerous restrictions and architecutural standards. All infrastructure is maintained by the City of Charlestown, and there is no common ownership of property.

But make no mistake. You can bet that Mayor Hall and developer Neace envision that the redeveloped Pleasant Ridge neighborhood will consist of more densely packed multifamily housing. That housing is likely to be a combination of rental apartments, condominiums, townhouses or other single family housing, initially governed by a developer-controlled HOA. In other words, it will be yet another association-governed, common interest community, or even a mixed use community.

Who stands to gain from redevelopment?

Certainly the developer and any affiliated real estate brokers. And, of course, property and community association management companies. Ditto for commercial landlords. Most of all, City Council and the Mayor will benefit, by expanding the tax base and generating additional revenue for public services, all while offering minimal public services to the newly redeveloped planned community.

Who loses if and when Pleasant Ridge gets redeveloped?

The owners of 50-60 year old modest homes in Pleasant Ridge stand to lose their homes, some of them owned free and clear of a mortgage. Those owners are being offered a paltry sum – as little as $10,000 – for their homes. That’s not nearly enough to purchase another home, and not even enough for a decent down payment.

Tenants lose, too. They are forced to move on short notice (by Dec 31, 2017), and will be hard pressed to find another home with affordable rent. Chances are high that, even if new rental properties are built in Pleasant Ridge in a year or two, the rents will be much higher than what tenants have been paying up until now.

What about future owners of brand new housing in Pleasant Ridge?

They will be able to live in a more modern, cleaned up neighborhood close to town. But their property rights will be limited by Covenants, Conditions, & Restrictions (CC&Rs), and they will have to pay mandatory HOA or condo assessments and fees in addition to higher property taxes.

And in the next generation, when those homes are somewhat outdated and a bit worse for the wear, a new group of real estate investors are likely to acquire much of the housing, take over the board of the association-governed community, and force a termination for redevelopment.

Only next time, a new developer won’t have to deal with years’ long eminent domain litigation. There will be no need to negotiate a fair deal with each and every property owner. And there probably won’t be any pro bono attorneys willing to help vulnerable homeowners, either.

You see, in association-governed housing communities, current state laws allow 75-80% of unit owners to override the rights of remaining homeowners, forcing a termination of the association, and forcing dissenting owners to sell to a new developer or real estate investment group.

(See Condo Termination – Conversion-Emiment Domain Category for documented examples.)

Looking at the big picture, it’s not just about the current eminent domain battle in Charlestown. It’s about the progressive erosion of private property rights in the U.S., all for the benefit of a few well-funded real estate developers and their political cronies in local government.

Below are three recent video reports from Charlestown, Indiana, as well as a link to a news release from Institute for Justice.

To read my archived blog posts with the back story on Charlestown redevelopment, click here.

Judge rules in favor of Pleasant Ridge residents fighting to save homes

WLKY Updated: 11:12 PM EST Dec 4, 2017
Lauren Adams

CHARLESTOWN, In. —
Fighting to keep their homes for more than a year, some Southern Indiana residents are encouraged after a judge ruled in their favor Monday. What is being done in Charlestown’s Pleasant Ridge neighborhood, according to Indiana Judge Jason Mount, is likely unconstitutional.

Citing nearly $10,000 in fines, the homeowners’ association claimed they were being fined way too often and too much, while the developer was being left alone. On Monday, Judge Mount ruled the the city gave “a free pass” to Pleasant Ridge Redevelopment, LLC, controlled by John Neace.

Read more (video):

http://www.wlky.com/article/judge-rules-in-favor-of-pleasant-ridge-residents-fighting-to-save-homes/14033275

 

Victory for Pleasant Ridge homeowners; hurdles still ahead

Monday, December 4th 2017, 9:56 pm EST
Monday, December 4th 2017, 10:42 pm EST
By Jobina Fortson, Reporter

CHARLESTOWN, IN (WAVE) – Melissa Crawford was still basking in the day’s victory outside a packed city council meeting on Monday night.

“It’s just the best Christmas ever,” Crawford said. “I think I might decorate for Christmas now.”

Crawford owns a home in the Pleasant Ridge Neighborhood in Charlestown. Early Monday, a judge put a stop to the city slapping high housing code fines on homeowners in the Pleasant Ridge neighborhood.

The city began aggressively inspecting homes in 2016.

“Everybody around town knows the deal here,” Josh Craven, president of the Pleasant Ridge Homeowners Association said.

The goal was to force homeowners to sell to a private developer, run by businessman John Neace.

Court documents released last August showed that Charlestown’s mayor and Neace’s company were working together.

Read more (Video):

http://www.wave3.com/story/36992213/victory-for-pleasant-ridge-homeowners-hurdles-still-ahead

 

JUDGE: PLEASANT RIDGE HOMEOWNERS UNFAIRLY TARGETED BY CITY’S FINES

A Scott County judge put a stop to how the city of Charlestown, Indiana issues code violations to private homeowners. In his 35 page findings of fact, the judge says the fines were an effort “to compel people to sell their properties to a private developer.”

Author: Robert Bradfield
Published: 11:31 PM EST December 4, 2017

CHARLESTOWN, Ind. (WHAS11) – It made be considered an early Christmas gift for Josh Craven and his Pleasant Ridge Neighborhood Association.

A Scott County judge put a stop to how the city of Charlestown, Indiana issues code violations to private homeowners. In his 35 page findings of fact, the judge says the fines were an effort “to compel people to sell their properties to a private developer.”

“We’re happy now that a judge looked at it and said, ‘Hey, the way these people have been treated you did it the totally wrong way,'” Craven told WHAS11.

The subdivision has been at the center of controversy during the last year when city council members voted for the area to be redeveloped. Pleasant Ridge Redevelopment then bought dozens of homes with the hope to demolish and rebuild.

Craven says some of the homeowners who didn’t want to sell were then hit with code violation fines while those homes now owned by the redevelopment company were not.

“The landlords were forced by owning 20 properties and 300 to 400 dollars per day on each property, you’re looking at 8, 9, $10,000 a day that these people would have had to pay,” Craven explained.

Read more:

http://www.whas11.com/mobile/article/news/local/judge-pleasant-ridge-homeowners-unfairly-targeted-by-citys-fines/496858137?scroll=0

 

 

See also this Institute for Justice press release:

Judge Shuts Down Charlestown Land Grab, Grants Preliminary Injunction to Pleasant Ridge Residents
Court Rules Charlestown’s Attempt to Bulldoze Pleasant Ridge Neighborhood Unconstitutional; The Ruling Immediately Stops Illegal Fines

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