Homeowners Threaten Suit Against San Antonio Developer

Nov. 15, 2016
Molly Rogers, 512 374-2765; mrogers@trla.org
Nancy Nusser, communications director, 512 374-2764 (o); 410 934 9588 (c); nnusser@trla.org

Nov. 15, 2016 SAN ANTONIO – Homeowners from a planned community near Randolph Air Force Base are making a final attempt at negotiation before filing suit against developers for breach of fiduciary duty, willful misconduct, gross negligence and other violations of the Texas Property Code. Today, homeowners from the Sedona Master Community, many of them military veterans and retired teachers, sent a letter calling for mediation with developer Christopher Price, a partner in the San Antonio firm Schertz 1518, Ltd.

For the past year, homeowners have repeatedly complained to Price that annual association fees have risen too rapidly, from $275 to $540 over two years, without comparable benefit to the community. Developers also have repeatedly refused to relinquish control of the Sedona community’s board to homeowners, leaving them without voting rights or control over costs. Lawyers for the homeowners argue that under the Texas Property Code, control of the board should have been turned over to them when Sedona became a closed community in June 2014.

“We have tried over and over to get relief from the high homeowner fees,” said Rose Mary Hendrix. “Many of us here are retirees, and we can’t afford these fees. And even though they’ve doubled, the pool is still dirty, and the current developer hasn’t provided the amenities we were promised. Our community is being neglected but Price won’t relinquish control so we can take care of it ourselves.”

Homeowners want developers to reduce the $540 annual fee to the previous $360, establish a cap on future increases, and recuperate funds they fear have been misappropriated. They also want control of the board.

TRLA attorney Molly Rogers, who is representing the homeowners, said, “If we can’t reach a prompt, fair settlement, I will recommend that we file a lawsuit seeking injunctive relief, the full measure of damages allowed by law, attorney’s fees, and costs. The homeowners feel fee increases are out of control and that they have no protection from further increases. And there are signs of serious fiscal waste and misappropriation by the developers.”

The letter sent today pointed out that the Sedona community’s budget and expenses — obtained through a March 2016 open records request — do not justify the 96 percent increase in fees over two years. The documents indicate that much of the increase was attributed to a doubling in landscaping costs at the Sedona community, even though half of the lots set aside for green space have been turned over to the adjacent Crossvine planned community, also owned by Price’s firm. As a result, the letter points out, landscaping costs should have gone down not up.

Homeowners are concerned that Price is using the Sedona fees to subsidize development of Crossvine, where luxury homes are far more expensive. The breaking point for many Sedona homeowners came when Price signed a contract on their behalf that requires them to pay upward of $35,000 a year to use Crossvine’s amenities. Price, who is on the board of both HOAs, represented both parties in signing it.

“All those amenities for Crossvine bring up the value for Crossvine — not for Sedona,” said Kim Morton. “My husband didn’t do 27 ½ years in military service to our country to be treated like this. Our landscaping looks disgraceful. There’s no grass in places. The mailboxes are in the dark, so it’s unsafe. Crossvine has a lighted, covered facility that is handicapped accessible. And the bus stop there is designed so the children are protected from the elements. Our kids aren’t good enough for those things, but we’re paying for Crossvine to have them.”

Rogers said: “There are serious, multiple problems at play. When the developers increased the fees, they did not follow the minimal due process required under the property code. They actively discouraged homeowners from attending open board meetings and gave them the runaround when they asked questions and tried to assert their rights. The budgets provided do not justify the cost increase. They show that as much as $25,000 is missing without explanation. The best-case scenario here is that the Sedona HOA is being horribly mismanaged and homeowners are on the hook for the waste. “