Notable HOA Lawsuits (Summer 2019)

By Deborah Goonan, Independent American Communities

New and former board members fight over access to records, a condo owner sues HOA over denial of radon mitigation, a CDD declares bankruptcy, and more.

Former HOA board members sue their own HOA

According to a FoxNews report from West Houston, there’s trouble brewing in Clayton Woods subdivision.

Last year, some new board members took over, only to learn that their HOA was deep in debt with almost no money in reserve.

The new board requested financial records from three outgoing board members. They waited for a year, but never received the records they requested. The HOA sued their former board members, hoping that would force the outgoing board members to show the new board how their money has been spent for the past 20 years.

Unfortunately, the HOA’s lawsuit was unsuccessful.

But now those three former board members have attorney fees. So they’re suing the HOA and asking for $100,000.

It was just a matter of time before something like this happened.

The community is now divided between owners who support the new HOA board, and owners who support the old HOA board.

The attorney for the former board members says that governing documents for Clayton Woods Association require the HOA to pay legal defense fees for current and former board members.

Just another ironic twist in the fundamentally-flawed design of HOA-governed communities.


West Houston residents being sued by former members of their homeowners association

By Randy Wallace, FOX 26 News
Posted Jun 17 2019 10:05PM CDT
Video Posted Jun 17 2019 09:43PM CDT


Condo owner sues association over its denial of radon mitigation request

A previous post on IAC shared the plight of Tony Turlenko, owner of a condo at South Preserve II at Waterside Village Association. Turlenko’s tenant expressed concerns about radon, after the unit tested positive for the odorless but toxic gas.

Long-term exposure to radon has been linked to some forms of cancer. Experts recommend mitigation of high levels of radon from residential dwellings.

Turlenko requested permission from his HOA to install a radon mitigation system, but he received a surprising response.

The condo association said it would grant approval under one condition — the Turlenkos would be held legally responsible if, by diverting radon from their unit, it funneled radon into neighboring units.

The Turlenkos considered this an unreasonable condition, and refused to sign a legal release. Then the HOA denied their request for a radon mitigation system.

Concerned about their health, Turlenko’s former tenants cancelled their lease and moved out.

Now the condo owner is suing  the condo association for $5,000 over their denial of the radon mitigation request. Meanwhile, Turlenko’s former tenants are suing the landlord to get their $1,300 security deposit back.


Condo association sued over radon
By GREG GILES News Editor, Venice Gondolier
Jun 26, 2019

Family of injured boy sues Lakeview area condo association

Last March, a 5-year old boy was retrieving his football on the property of Grand Briar Condominium Association, when a drainage grate collapsed beneath his feet, causing him to fall into a 6-foot deep hole.

According to reports, the boy suffered a critical puncture wound to his stomach. The boy is recovering from his injuries.

But now the boy’s family is suing the condo association for failure to maintain a safe drainage grate. The condo association has made no public statements about the accident or the lawsuit.

The video below captures the accident on condominium association property.


Family sues condo association after boy, 5, is seriously injured falling through grate in Lakeview
Friday, June 14, 2019 1:01AMCHICAGO (WLS)

Victims of CDD Ponzi scheme declare Chapter 9 bankruptcy

At the height of the real estate market more than a decade ago, developers Fred Davis “Dave” Clark Jr. and David Schwarz promised buyers of units in Baywatch at Grand Venezia a world-class resort on Tampa Bay.

Clark and Schwartz formed the Clearwater Cay Community Development District (CDD) and issued $34 million in bonds. Luxury apartments, originally built in 2001, were converted to Baywatch Condominiums, with units selling for around a half-million dollars. Investor-buyers were hoping to cash in on vacation rentals.

Then the market tanked, and construction came to a halt.

Clark and Schwartz were ultimately investigated, arrested and convicted of running a multi-million dollar Ponzi Scheme in Florida and Las Vegas.

Needless to say, Grand Venezia is not so grand. Most of the promised amenities were never built, but condo owners got stuck repaying the CDD bond debt, to the tune of $1,100 per unit, per month.

With the developers now behind bars, condo owners on the CDD board decided to do something unheard of — the CDD recently declared Chapter 9 bankruptcy. Its board is asking the court to renegotiate and substantially reduce bond debt, since property owners in the CDD never actually received the full benefit of $34 million.

Naturally, bond holders (Oppenheim Funds and Invesco) are fighting back, insisting that CDD taxpayers are obligated to pay, regardless of the circumstances.

An interesting case to watch.


The nuclear option: Clearwater condo owners push back against bond debt
By Richard Danielson | Tampa Bay Times
Published June 28
Updated June 28


HOA board expects insurer to pay for putting out the fire in its stump dump ‘amenity’

In May, Bella Vista property owners association (Arkansas) was ordered to put out a fire in a smoldering stump dump, spending millions of dollars In the process.

Developer Cooper Communities used the dump for old tree stumps and other construction debris. According to one local report, the HOA continued to use the dump on leased land from 2003-2016.

After that, no one took care of the dump, and a fire started in 2018.

The smoke from the fire is blamed for making nearby residents sick, including a small boy.

Bella Vista’s HOA filed a claim with their insurer to cover their loss from putting out the fire, referring to the dump as an ‘amenity’ provided by the builders many years ago.

(Unbelievable. Who really wants to live near a landfill?)

The HOA’s insurer says that a stump dump is certainly not listed on the insurance policy a covered amenity. The company also claims it never would have insured the HOA in the first place, had it known about the dump. They refuse to pay, and want a court to rule that the insurer has no liability in connection with a dump fire.

Looks like the parties will debate the issue in court. ♦


Bella Vista property owners sue insurer over dump fire

by Tracy Neal | NW Arkansas Democrat Gazette | June 28, 2019 at 1:07 a.m.

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