***** Major News Flash! ***** ***** Major News Flash! ***** ***** Major News Flash! *****
Yep….I am still having a good old time plowing through the Master Deed and Bylaws of Deer Ridge Mountain Resort (AKA GGRC and RML.) Such fun! But I have found THREE more pivotal, and ongoing violations of the Deer Ridge documents as a result of the actions, and in-actions, of GGRC and RML Board of Directors and the General Manager, Joe Thomas.
These are critically important violations that all owners at Deer Ridge need to understand – so this is worth your time. In my opinion, the following will show you that:
- Annual meetings and board of directors elections have violated the requirements of the Bylaws of GGRC.
- The construction of the pavilion was a violation of the Master Deed for Deer Ridge.
- The starting and continued funding of Ridge Management, AKA RML, was and is an ongoing violation of the Master Deed for Deer Ridge
These violations add up to hundreds of thousands of wrongly spent dollars – and don’t even include what appears to be over HALF A MILLION DOLLARS of wrongly applied monthly HOA fees and special assessments against owners.
We are talking about a lot of YOUR money having been misused – requiring you to fund even MORE dollars for your “share” of the current Asinine Assessment. So, the following is worth your time to read.
As before I am going to see if I can make this simple with little snippets I took from the Master Deed and Bylaws. You can download the whole document here on this blog by clicking Master Deed and Bylaws.
Now…to understand this post, you really ought to read the prior post “Deer Ridge – Your Monthly HOA Fee And Special Assessment Are WRONG!” If you click that title, you can go read the post that shows that ALL of the monthly HOA fees and special assessments have been wrongly calculated for YEARS!
Go read it and come up to speed on that before we move forward with today’s topic. I’ll wait….
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Back so soon? Good, this means you’ve been keeping up on your homework!
As I mention there, I am plowing through these two controlling Deer Ridge documents because of my contemplated lawsuit against Deer Ridge Mountain Resort, AKA GGRC and RML, for not providing copies of documents to any and all owners.
Because of this, I started looking at different things – and figured I needed to go back and re-read the Master Deed and the Bylaws that are the governing legal documents for Deer Ridge.
Violation – Annual Meetings
We’ve owned here at Deer Ridge for over four years and love it here! During those four years, and I believe for many years before that, the annual homeowners association meeting has been held during the last part of April each year.
It’s a pretty time of the year – and seems to work well with all the golfers who are purposely distracted by the GGRC golf tournament. After all, if the Board and Joe Thomas can use golf tournaments and dinners to divert attention from the real business issues that genuinely need attention, they can better continue their flagrant Master Deed violations.
The trouble with having the annual meeting every year in April? The Article XI of the Bylaws REQUIRES it be held before the end of March!
Notice that this says the annual meeting is to be held during the first quarter of the calendar years…that means that it MUST be held before the end of March. Period.
Now, there IS a way to change this – via Article XX of the Bylaws, Amendments.
Based on my understanding of the Deed Records of Sevier County, there has never been an official amendment to the Bylaws, with at least 67% of the owners approving such amendment, to ever change the requirement to have the annual meeting before the end of March. Note that it REQUIRES that ANY amendment be embodied in a recorded instrument on the Deed Records before it becomes “operative.”
Hence, I will contend during the lawsuit that since becoming an owner, there has not been ANY annual board meetings held in accordance with the Bylaws – and therefore there has not been any valid election of Board members during that time – and any decisions, assessments, etc. made by the illegally formed Board are null and void and without effect.
Again, this is just another example of the Board’s and Joe Thomas’ clear disregard of the Master Deed which is the controlling document for everything that is supposed to happen at Deer Ridge. They can’t just choose to play by the required rules just whenever they want. They are REQUIRED to follow the rules ALL of the time. Period.
The Board and/or Joe are grossly negligent in not abiding by even this simple requirement of the Master Deed and are jeopardizing GGRC to claims of ineffective decision making.
Violation – Joe’s Folly – The Totally ILLEGAL Pavilion
If you have read my other post here on Joe’s Folly Pavilion then you will know what a horrible business decision it was to move forward with that new facility – especially when they had a comprehensive business plan showing them it was an idiotic idea before they started construction.
You got to hand it to Employee Joe – when he gets his mind set on something, he gets it done – one way or another – whether it is legitimate or not – whether it is idiotic or not! As they say here in Tennessee, “Git ‘er done!” (I was born and raised here, so I can poke fun at us locals!)
Or, as Joey and the Board sing, “Git ‘er done – no matter what the Master Deed says!” (The tune is the same as Elton John’s, “Bennie and the Jets.”)
What is interesting is that the Board reported in the Board meeting notes that the pavilion project was canceled – but lo, and behold, just a few months later Joe had his Folly Pavilion anyway.
No vote. No discussion. Joe wanted it – and somehow he got it.
Problem is: Once again they broke the rules to do it – completely ignoring the requirement of the controlling documents of our property. This is what the Master Deed requires, according to Article XII:
As you can see, this part is crystal clear: NO alterations or additions to the Common Elements without a 75% affirmative vote of the total vote by all the Owners.
Did you get a vote? I didn’t either. So, over $80,000 of OUR money appears to have been spent illegally by the Board and Employee Joe. In court, I will demand that they show this was an authorized expense. Of course, since there was NEVER a vote, they won’t be able to prove that it was legitimate.
And, that is not the only alterations or additions that have been completed at Deer Ridge.
- I didn’t get a vote on the current changes and additions to the maintenance building.
- I didn’t get a vote on the changes to the pool deck, whirlpool or the new siding for the walls surrounding the pool.
- I didn’t get a vote on the major renovations that were spent on jazzing up the reception area and Joey’s offices.
- I didn’t get a vote in ALL the other alterations or additions that have occurred at Deer Ridge.
Did you?
The other part of the above snippet says that if something IS approved, only those who benefit from it have to pay for it. The whole touted reason for building the pavilion albatross was to encourage more reunion groups renting more rental units. Well, I am not part of RML and get ZERO benefit and only grief from it, so NONE of my assessments should have been used to pay for anything whatsoever to do with Joe’s Folly – even if it HAD been legally approved.
The trouble is that ALL of us had to pay for this stupid idea of Joe’s. Even though it was illegal without that 75% vote.
Which is why I want a full, comprehensive cost accounting audit of everything associated with Joe’s Folly Pavilion done by an unaffiliated third party forensic CPA firm. And, one of many reasons, I want Joe Thomas fired – for at least gross incompetence and gross negligence.
Without that 75% vote, the Board violated the requirements of the Master Deed. Without that 75% vote, they, and Joe Thomas, either fraudulently or through gross negligence, wasted my money and yours by constructing this pavilion.
If they didn’t know about or understand the constraints of Article XII, then they are grossly negligent. If they DID know, I consider it fraud if they spent my money knowing they did not have a right to spend it!
Either way, I plan on including this issue in my lawsuit against GGRC and RML.
I want my money back that was stolen from me – plus at least treble damages!
Violation – Ridge Management – RML – It’s Formation and Operation Are Violations Of The Master Deed
Ahh, good old Ridge Management. The bane of Deer Ridge and the never ending abyss into which all owners pour money.
Too bad it is is ILLEGAL!
Let me show you my logic again…by using the controlling document for everything that happens regarding Deer Ridge – the Master Deed.
According to Article IX of The Master Deed – Assessments: these are the ONLY legitimate reasons that owners can be charged assessments for their unit at Deer Ridge.
Note that the Common Expenses ONLY include what is “necessary for the care, repair, replacement, maintenance, preservation and improvement of the Submitted Property and shall establish and maintain a adequate reserve fund to cover these periodic expenses.”
Now, it goes on to say,
The Board of Directors shall have the power and duty to fix and determine from time to time the sum or sums necessary and adequate to provide for the Common Expenses of the Regime and such other expenses as are provided for herein, in the Act or deemed necessary and appropriate expenses of the Regime.
What that means is that the Board can decide the right amounts for the Common Expenses and charge that to all owners in accordance with the Master Deed Percentages – but they CANNOT go off and set up an operating business and charge owners for funds to operate that business!!!
Hence, Ridge Management, AKA RML is illegally formed and funded with your assessment dollars!
All owners do NOT benefit from RML (actually, my contention is that no Deer Ridge owners benefit from RML) – so Joe Thomas and the Board, through either gross negligence and/or fraud, have funded RML through illegal assessments to all owners of Deer Ridge. Additionally, it is my contention that the full extent of this illegal funding to RML has been intentionally hidden in the budgets submitted by Joe Thomas and the Board – and those fraudulent budgets are the budgets shown to all owners.
When I bought my property at Deer Ridge, it was with the idea and knowledge that I was making a real estate investment – with all of the potential risks and rewards that are a normal part of real estate.
However, as a result of the Board and Joe Thomas knowingly and, in my opinion, illegally starting and funding RML, I and all other past and current owners at Deer Ridge have been FORCED to participate in the business risks of an operating business. In this case, it is for a property management company that does NOT benefit all owners.
What if….. Joey and the Board had this totally “fictitious” brainstorming session over drinks one night,
“Hmmm…the Pavilion hasn’t turned out to be such a good idea, after all.
“Oh, well. It was only $80,000 – and it wasn’t MY money we were playing with! Just more Monopoly money from the owners.
“I know! Let’s turn this pavilion into a restaurant and call it ‘Joe’s Folly Food and Fun.’ Why, it would be good for all the owners because that way there would be an on premises restaurant – and the owners and guests wouldn’t have to even leave Deer Ridge to have a tasty meal. And, if there were any owners who didn’t use our new restaurant, or use it ENOUGH – well, they would just be traitors and be downright unAmerican – stealing money from Deer Ridge!
“Hmmm…maybe we could even charge owners a penalty for each and every meal they cooked in their kitchen instead of eating at our restaurant.
“Hmmm…that might not fly….
“Owners…who do they think they are? They think they own the place! Don’t they understand I have a business empire to run here!
“I know, just charge the owners during Primetime Season – and every time there is a full moon. Owners shouldn’t even be here during Primetime Season any way – this will show them.
“Hey, and I can sneak on a Restaurant Usage Opportunity Fee to all the guests who rent here – and surprise them with that like we do the surprise Maid Fee when they check out. I just love to watch the expression on guests’ faces when they get to that line item – and we show them we have a right to do it with the tiny print on the web site.
“The owners certainly don’t need to vote on this restaurant – it is obvious to God, and everyone, that this is good for all owners – plus it’s good for the economy and good for America – and, besides, the finished restaurant would be such a nice surprise to everyone next time they show up on property. Besides none of them are smart enough to read the Master Deed to know what can and cannot be done.
“Now, let’s see….I will need about $250,000 to turn this turkey errr pavilion into a restaurant…..I will need to add A/C, furniture and fixtures, kitchen equipment, signage – we gotta have some signage. And, I should get paid, hmm….a $50,000 bonus for coming up with such a GREAT idea for Deer Ridge Mountain Resort!
“Plus, I deserve ANOTHER monthly salary, oh say, $5,000 a month as Restaurant Manager…on top of my other monthly salaries from being GGRC Manager, RML Manager and Ridge Realty Manager….after all, condo sales are down – and I got to make up the money somehow…
“Better make that total $350,000 for the new restaurant – what’s an extra hundred grand among friends – especially when all we have to do is add all of this to the monthly HOA fees or maybe even do a special assessment for every owner at Deer Ridge. Besides, all the owners are loaded – and can afford whatever amount I think is needed.
“Oops, if we do that, hmmm…instead, let’s call it $350,000 for ‘nuts and bolts’ for the main property. And it won’t matter if the restaurant makes money or loses money. We’ll just keep funding it from all the Deer Ridge homeowners – one way or another!” After all, it is good for the property – and good for all of America.
“God bless America! Praise the Lord – and pass the plate!”
Of course, all of the above is just a little satirical humor – and has nothing to do with any reality I personally know about.
However, the point is: Whether it is a restaurant – a grocery store – or a property management company, anything like that puts ALL the owners of Deer Ridge at major risk – for all the things that can go wrong with running ANY business.
When I bought at Deer Ridge, I was NOT buying into some operating business – and this ongoing obligation to fund RML through HOA Fees and special assessments was NOT disclosed.
The trouble is that ALL of us have had to pay for this stupid idea of being in the property management business. Even though it sure appears illegal to me. Which is why I want a full, comprehensive cost accounting audit of everything associated with Ridge Management done by an unaffiliated third party forensic CPA firm.
I also want RML sold ASAP – not to Insider Joey who tried to steal it before with a $100,000 purchase price with $90,000 of the price as a non-recourse note from Joe Thomas back to GGRC – but a sale done right -in accordance with the methodology I described before. Click RML Sale for details.
The Board violated the requirements of the Master Deed. Any funds related to starting and operating RML are NOT part of the definition of “Common Expense” in the Master Deed. ONLY those items defined as Common Expense can be part of the allocations requiring payment by the owners of Deer Ridge. Period.
The Board, and Joe Thomas, either fraudulently or through gross negligence, wasted my money and yours by putting us all at risk of running a business called Ridge Management.
If they didn’t know about or understand the constraints of Article XII, then they are grossly negligent. If they DID know and still went ahead and started and ran RML, I consider it fraud if they spent my money knowing they did not have a right to spend it!
Now that they DO know for certain that it is NOT an appropriate use of even one dollar of our money, the Board and Joe Thomas are required to stop all operations immediately – and dispose of RML forthwith. In my opinion, for them to continue operating RML beyond today would clearly be fraudulent behavior.
Either way, I plan on including this issue in my lawsuit against GGRC and RML.
I want my money back that was stolen from me – plus at least treble damages!
Upshot – Without These Master Deed Violations – GGRC Would Have More $$$ And Not Require The Current Special Assessment
Have you all started noticing an ongoing pattern here – where Joey and the Board have TOTAL disregard for the rules for Deer Ridge?
- Gross overcharges and undercharges of all HOA costs, fees and assessment by unit type, not in conformance with Master Deed.
- Annual meetings not in conformance with Bylaws.
- Major repairs and construction done, not in conformance with Master Deed.
- RML formed and funded, not in conformance with Master Deed.
- What else? We will see what we can add to this list – besides Joey and the Board doing everything they can to block access to the books and records of OUR homeowners association.
- What else are they trying to hide???
The Board and Joey right now want all of us to give them $353,500 for what they say are needed repairs – including $50,000 for “nuts and bolts.” And, they are completely unwilling to show owners ANY of the underlying documents to justify their $353,500!
Suspicious, huh?
Kind of reminds me of the $20 million commode seat that was a very infamous line item in the military budget a few years ago. Just like that seat, the $353,500 assessment is NOT for what Luther’s letter describes. It is to fund projects and companies like the pavilion and RML – and to hide the real purpose from the owners of Deer Ridge.
If our money had not already been squandered by Joey and the Board, our reserve account would be sufficient to pay for the work that really needs to be done on this property – and all of us would NOT have a $353,500 special assessment staring us in the face.
More Coming On This Post – Stay Tuned And Watch For The Updates!
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