Legal Complaint & Updates

Harvest Point Legal Fund - Update 📄 𝗦𝗨𝗠𝗠𝗔𝗥𝗬 𝗢𝗙 𝗧𝗛𝗘 𝗗𝗘𝗠𝗔𝗡𝗗 𝗟𝗘𝗧𝗧𝗘𝗥 On August 15, a formal demand letter was sent to the Harvest Point Master Owners Association regarding two primary issues: 𝗵𝗼𝗺𝗲𝗼𝘄𝗻𝗲𝗿 𝗿𝗲𝗽𝗿𝗲𝘀𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗼𝗻 𝘁𝗵𝗲 𝗛𝗢𝗔 𝗕𝗼𝗮𝗿𝗱 𝗮𝗻𝗱 𝗮𝗰𝗰𝗲𝘀𝘀 𝘁𝗼 𝗔𝘀𝘀𝗼𝗰𝗶𝗮𝘁𝗶𝗼𝗻 𝗿𝗲𝗰𝗼𝗿𝗱𝘀. 𝟭. 𝗛𝗢𝗠𝗘𝗢𝗪𝗡𝗘𝗥 𝗥𝗘𝗣𝗥𝗘𝗦𝗘𝗡𝗧𝗔𝗧𝗜𝗢𝗡 𝗢𝗡 𝗧𝗛𝗘 𝗕𝗢𝗔𝗥𝗗 The original Harvest Point Bylaws required that once 𝟰𝟬% 𝗼𝗳 𝘁𝗵𝗲 𝘂𝗻𝗶𝘁𝘀 had been conveyed to homeowners other than the Declarant, at least one Board member had to be elected by homeowners. According to the letter, that 40% threshold was reached in the fall of 2022. Paragon subsequently solicited homeowner nominations and began the election process, but that process was never completed. In December 2023, while the Board consisted entirely of individuals affiliated with the Declarant, amendments were adopted that: • Eliminated the provision requiring the homeowner-elected Board seat; and • Changed the threshold for ending Declarant control from 𝟳𝟱% 𝘁𝗼 𝟵𝟱% 𝗼𝗳 𝘂𝗻𝗶𝘁𝘀 𝗰𝗼𝗻𝘃𝗲𝘆𝗲𝗱. The letter acknowledges that the governing documents gave the Declarant authority to make amendments during the Declarant Control Period. However, it explains that having authority to amend the documents does 𝗻𝗼𝘁 𝗻𝗲𝗰𝗲𝘀𝘀𝗮𝗿𝗶𝗹𝘆 𝗿𝗲𝘀𝗼𝗹𝘃𝗲 𝘄𝗵𝗲𝘁𝗵𝗲𝗿 𝘁𝗵𝗶𝘀 𝗽𝗮𝗿𝘁𝗶𝗰𝘂𝗹𝗮𝗿 𝗮𝗺𝗲𝗻𝗱𝗺𝗲𝗻𝘁 𝘄𝗮𝘀 𝗹𝗮𝘄𝗳𝘂𝗹, especially because the homeowner representation right had already been triggered. The letter states that these circumstances raise a serious question as to whether the amendment was 𝗮𝗿𝗯𝗶𝘁𝗿𝗮𝗿𝘆, 𝗰𝗮𝗽𝗿𝗶𝗰𝗶𝗼𝘂𝘀, 𝗼𝗿 𝗮𝗱𝗼𝗽𝘁𝗲𝗱 𝗶𝗻 𝗯𝗮𝗱 𝗳𝗮𝗶𝘁𝗵 for the benefit of the Declarant and its successors rather than the membership as a whole. The demand therefore called for the Association to 𝗿𝗲𝘀𝘁𝗼𝗿𝗲 𝘁𝗵𝗲 𝗵𝗼𝗺𝗲𝗼𝘄𝗻𝗲𝗿-𝗿𝗲𝗽𝗿𝗲𝘀𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗽𝗿𝗼𝘃𝗶𝘀𝗶𝗼𝗻 (𝗼𝗿 𝗶𝘁𝘀 𝘀𝘂𝗯𝘀𝘁𝗮𝗻𝘁𝗶𝘃𝗲 𝗲𝗾𝘂𝗶𝘃𝗮𝗹𝗲𝗻𝘁) 𝗮𝗻𝗱 𝗽𝗿𝗼𝗺𝗽𝘁𝗹𝘆 𝘀𝗲𝗮𝘁 𝗮 𝗵𝗼𝗺𝗲𝗼𝘄𝗻𝗲𝗿-𝗲𝗹𝗲𝗰𝘁𝗲𝗱 𝗕𝗼𝗮𝗿𝗱 𝗺𝗲𝗺𝗯𝗲𝗿. 𝟮. 𝗔𝗖𝗖𝗘𝗦𝗦 𝗧𝗢 𝗛𝗢𝗔 𝗕𝗢𝗢𝗞𝗦 𝗔𝗡𝗗 𝗥𝗘𝗖𝗢𝗥𝗗𝗦 The letter separately demanded access to Association records under Tennessee nonprofit law. Among the records requested were: • Board and membership meeting notices and minutes for the previous three fiscal years • Annual budgets and budget-versus-actual/variance reports for the previous three fiscal years • The most recent financial statements and balance sheet • Documentation supporting the basis for HOA dues increases during the previous two fiscal years • Recorded documents showing assignments of the Declarant’s rights, including assignments involving Cardinal Homes, D.R. Horton, or their affiliates • Documentation confirming the current percentage of units conveyed to homeowners rather than the Declarant The Association was asked to make these records available for inspection and copying and to provide a substantive written response 𝗻𝗼 𝗹𝗮𝘁𝗲𝗿 𝘁𝗵𝗮𝗻 𝗦𝗲𝗽𝘁𝗲𝗺𝗯𝗲𝗿 𝟭, 𝟮𝟬𝟮𝟲. 𝗪𝗛𝗬 𝗧𝗛𝗜𝗦 𝗠𝗔𝗧𝗧𝗘𝗥𝗦 This letter did more than simply ask questions. It formally identified the homeowner-board-seat issue, requested corrective action, demanded specific Association records, and expressly reserved the homeowners’ legal rights and remedies. The letter also made clear that the matter could potentially be resolved 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗹𝗶𝘁𝗶𝗴𝗮𝘁𝗶𝗼𝗻 and expressed a willingness to discuss a reasonable path toward compliance. 𝗜𝗡 𝗦𝗛𝗢𝗥𝗧: The demand asked the HOA to honor the homeowner representation that was triggered under the original Bylaws and to provide records that will help homeowners better understand the Association’s 𝗴𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲, 𝗳𝗶𝗻𝗮𝗻𝗰𝗲𝘀, 𝗱𝘂𝗲𝘀 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝘀, 𝗗𝗲𝗰𝗹𝗮𝗿𝗮𝗻𝘁 𝘀𝘂𝗰𝗰𝗲𝘀𝘀𝗶𝗼𝗻, 𝗮𝗻𝗱 𝗽𝗿𝗼𝗴𝗿𝗲𝘀𝘀 𝘁𝗼𝘄𝗮𝗿𝗱 𝗵𝗼𝗺𝗲𝗼𝘄𝗻𝗲𝗿 𝗰𝗼𝗻𝘁𝗿𝗼𝗹. This was an important step toward obtaining greater 𝗿𝗲𝗽𝗿𝗲𝘀𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝘁𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝗰𝘆 for Harvest Point homeowners. A small group of concerned neighbors representing 20% of our community funded the legal efforts to get to this point. We have now reached a turning point and need the support of the broader community to move forward. If 200 neighbors contribute $50 each, we reach our goal quickly. Please consider making a contribution today. Let’s make this happen together! The contribution QR code & check payment options will be listed in the first comment. Thank you!😊