It’s a bad real estate market out there.  I know – you heard it here first.

According to the latest analysis of home price trends in 384 markets based on the Fiserv/Case-Shiller Indexes, it will be well into the second quarter of 2013 before median home prices across the nation probably bottom out. Click Housing Recovery Slips Out of Sight to read the CNN report.

That’s two more years where the general real estate market will get worse – with prices probably falling ANOTHER 15% to 25%.  If we go into a double dip recession, which is now appearing likely, additional price drops could end up being more severe.

As bad as that is, the situation for selling condos at Deer Ridge Mountain Resort in Gatlinburg, Tennessee is even worse.

Selling A Deer Ridge Condo – Reality Check

Besides it being the worst real estate market since the depression, Deer Ridge owners have several other MAJOR strikes against them that make our units virtually unsaleable to anyone:

• Deer Ridge has THE highest monthly HOA fees, per square foot, of ANY condo in the entire Gatlinburg / Pigeon Forge / Sevierville or Knoxville area.  At $410 to nearly $500 a month, we simply are pricing our units out of the marketplace – especially when comparing the ratio of HOA fee to the price of the condos.
• These outrageously high HOA fees will probably rise by $70 to $100 a month MORE when the “board” sets the budget for 2012.  This could end up making our monthly HOA fees a staggering $500 – $600 a month on properties that sell for $35,000 to $90,000.
• Buyers for Deer Ridge units have the inexcusable burden and liability of having to support and fund a motel business, RML, that is losing all owners over $150,000 a YEAR and is bankrupting our GGRC HOA.

For many folks who could afford a Deer Ridge condo with a normal mortgage, the HOA fees here knock them out of qualifying for financing and reduces, yet again, the small universe of potential buyers who might, just maybe, have an interest in owning a condo at Deer Ridge.

The Glut – At Least 43% Of Deer Ridge Owners Want To Sell

If all of that wasn’t bad enough, there is “The Glut.”

As of now, there are 23 known units at Deer Ridge that are already officially on the market for sale.  21 properties are shown on the MLS listing (click image to get a copy of the document) – PLUS another owner listed his unit last week – and another owner is trying to sell her unit as a For Sale By Owner. 

On top of all of that, we know of at least another 13 owners who have indicated that they want to sell their Deer Ridge condo – but see it as currently pointless to even list it for sale.  This is known as shadow inventory.

This means that out of the 84 total units at Deer Ridge:

• 27% of the units are officially on the market.  This, by itself, is a HUGE red flag to most buyers when that high a percentage of units at one development are on the market at one time.
• 43% of the owners want to sell – when you count both those on the market plus the shadow inventory of those who really want to sell.
• That’s nearly HALF of the owners of ALL condos at Deer Ridge want to sell!
• And, you are directly competing with other owners to grab the attention of very few prospective buyers for Deer Ridge.
• On top of that, all owners at Deer Ridge are having to compete with the mass of sellers dumping their properties all over Gatlinburg and Pigeon Forge as a result of the economic and real estate downturn.

Folks, that 43% of all units at Deer Ridge represents a Glut – and creates even more red flags that are waving in the faces of any prospective buyer of a Deer Ridge unit.

My guess is that many of the shadow inventory units will desperately and aggressively come out of the shadows and be placed on the market if the board has their way and raises the HOA fee by $70 or more in the next three months so they can continue to cover the massive hemorrhage caused by RML’s huge negative cash flow.

If that happens, more and more owners will try slashing their asking price just to try and dump their units at Deer Ridge – with everyone trying to out slash all the other, competing sellers at Deer Ridge.

Another Disadvantage:  Selling Through Joe Thomas and Ridge Resort Realty

So, how do you compete to get your unit sold when almost half of all owners are trying to sell basically the same unit?

For one thing, don’t list with Joe Thomas and Ridge Resort Realty.

Surely, by now you know that he is ONLY interested in selling any units to non-residents who will use their unit for a few weeks a year and list it with RML for rental income.  In my opinion, he will NOT try to sell to anyone who does not fit this tourist / motel rental profile, folks!  He will NOT try to sell to anyone who might use a different rental company.

This is especially true if you are currently using RML since he knows he gets management fees from you as long as you are stuck with your unit.  If your unit sells, it is a financial risk to him since the new buyer might not sign that RML agreement that keeps a non-competitive 50% of rental collections.

This means, in my opinion, if you are listing your unit for sale with Joe Thomas, you have a much WORSE chance of finding a buyer than if you list your property with someone else.  Other owners are using other brokers – so they have a competitive advantage over you if you are using Joe Thomas.  The other brokers don’t care who buys your unit or if they plan on renting out your condo after they buy it.

Recommendation:  Terminate your listing agreement with Ridge Resort Realty and list your unit with another broker.  At least this one disadvantage would be solved – and you would gain an advantage over all the other owners at Deer Ridge who don’t understand this issue.

Another Disadvantage:  Give RML A 60 Day Notice – And Save Yourself Up To $1,000 A Year Or More.

As you all know, RML raised its management fee to a whopping 50% of all dollars they get from renting your unit.  The market is, at most, 40%.  RML is continuing to charge non-owners 40% to manage their properties – but raping owners with their above market 50% fee.  This represents a 25% increase in the dollars out of your pocket and into the pockets of Joe Thomas.

Clearly, Joey and the rest of the Gang don’t give a damn about owners or they wouldn’t have raised your fee from 40% to 50%.

It may seem “convenient” to just use RML to manage your condo rentals – but there are a LOT of other rental companies in Gatlinburg that want your business.  These other rental companies would compete for your business with a better rate and better service than you are going to get from Joe Thomas and RML.

Don’t be passive for false “convenience.”  That’s what Joe Thomas counts on: That you will be too passive, too lazy, too complacent to find a better management company where you get to keep $1,000 or more in your own pockets each year.

Give Joey the required 60 day boot – and get a better rental company!

(See below about how one company only charges 35% – and on a property that has half of  our HOA fees for a much nicer and even smaller complex.

The Only Solution – If You Ever Want To Sell Your Deer Ridge Unit

The only solution to the gross disadvantage that Deer Ridge condos have in the market requires four steps:

1. Sell or shut down RML and get out of the motel business and stop the $152,000 a year hemorrhage that is bankrupting GGRC. (Be sure and give your 60 day notice to RML and have your unit already listed with another rental management company!)
2. Fire Joe Thomas – this small 84 unit complex can’t afford his $100,000 employment package.
3. Hire an independent HOA management company for $20,000 a year – including all bookkeeping. Click Bid to see an actual bid by one company to manage Deer Ridge for only $1,680 per month including all bookkeeping!
4. After the above three steps are done, cut all monthly HOA fees in HALF – and still have a positive cash flow for GGRC!

All of the above can be done over the next 60 days with the support of over half of the owners.

Another Reality Check:  You ARE Stuck With Your Deer Ridge Unit

Even with the above steps, you are probably stuck owning your Deer Ridge unit for at least two more years.

But with the above Four Step Plan, your HOA fees are cut in HALF while you still own…your property value will go up and your property is immediately more marketable once the real estate market improves.

Doesn’t it make sense to immediately implement that Four Step Plan – and cut our HOA fees in half NOW?

Stay Tuned For The Four Step Proxy

We are having our attorneys draft a proxy in accordance with Article XI of the Bylaws requiring a special meeting and vote strictly to cover the Four Point Plan.  With your help, we won’t have to wait for our lawsuit to shut down RML and stop the negative cash flow.

If you agree with this and want your HOA fees cut in half, and are willing to sign such a proxy, let me know and we will notify you as soon as the proxy is ready.

PS:  Want To See A Sample Of How A Gatlinburg property should be run:   The Highlands Condos of Gatlinburg, Tn.

The owners at The Highlands in Gatlinburg are not at risk for covering a property management company’s negative cash flow like we are with RML – even though they have an onsite management company.

Werner Enterprises, Inc. is located on premises and only charges a 35% management fee (versus 50% at Deer Ridge.) Werner Enterprises does extensive marketing and furnishes housekeeping, linens and supplies in each unit. But by having a totally independent property management company from the HOA, the HOA Board can focus on the owners’ interests and not to be involved in a “For Profit” business that has MANY interests that are contrary to the real interest of the owners.

Their HOA Fees:

• 1 bedroom $225.00 per month / paid quarterly
• 2 bedroom $282.00 per month / paid quarterly
• 3 bedroom $338.00 per month / paid quarterly

Their HOA Fees Include: Water, sewer, cable TV, building insurance, trash collection, common area electricity, pest control, pool and hot tub operations and even firewood (in season).  Compare their 1 bedroom charge of only $225 to the outrageous HOA fees here at Deer Ridge where we pay $410 a month for the same things – but we don’t get the firewood included.

That means we are paying 82% higher monthly fees than they pay for their 1 bedroom units. And that’s before the “board” tries to raise our HOA fees AGAIN in November by another $70 a month.  That would make our fees 113% higher than the Highland’s fees.

Hmmmm….isn’t that interesting – since our Master Deed shows that Luther Parker and the rest of the “board” are currently overcharging all 30 owners of 1 bedroom units at Deer Ridge (36% of ALL units) by this same 82%!!!!

The Highlands have only 54 units to share in common expenses…which should make each unit’s HOA fees higher…but it doesn’t since they don’t have to support Joe Thomas‘ $100,000 plus compensation package and the massive negative cash flow of a money losing motel operation like RML.

This is what we at Deer Ridge compete with – even though these condos sell for $140k – $325k.  and the views rival ours here at Deer Ridge.  See the details by clicking The Highlands.

Folks, this should show you that it is PAST time for a MAJOR change at Deer Ridge. Vote to implement the Four Step Plan!

Apparently, GGRC and RML are so desperate for cash that Joe Thomas and the rest of the Gang of Six are attempting to double bill Deer Ridge owners.

Case in point:  They claimed that owner Todd Novak had not paid a past water bill from a few years ago.  After Todd went to all the trouble to dig up the proof that he had, in fact, paid that bill, Joe Thomas and the office staff then claimed Todd had not paid another bill.

This time, Todd took GGRC / RML to court with a Small Claims action filed on May 11, 2011.

In spite of the testimony by Joe Thomas in front of the judge, the Court apparently did not find Joey’s testimony convincing in light of Todd’s proof and documentation.  As a consequence, the Judge ruled on May 23rd in Todd’s favor, granting him the following judgement against GGRC / RML:

This Is NOT The Only Case

The obviously false claims by Joe Thomas that Todd owed payments on old bills appears to be spreading to other owners too.  For example, this is the demand letter another owner has received:

As shown above, this owner also has the canceled checks showing she did not owe the claimed $540.

Have YOU Been Overcharged Too?

Individually, this may not look like much of an issue.  But together, they indicate a trend of trying to dig up long past billings and claiming that multiple Deer Ridge owners have not made some long ago payment.  Todd’s win in Court shows that, at least in his case, the claims of Joe Thomas were false.

• Is it that Joey and the Gang are hoping to go back far enough in time that owners haven’t saved their canceled checks as proof?
• Is this an ongoing, desperate attempt by Joey to get cash from wherever he can even if he falsely makes claims like he apparently did in Todd’s case?
• How many OTHER owners are getting hit with this same kind of letter, this same kind of false claims over long forgotten paid bills?
• Conversely, is it that Joe Thomas is so incompetent that his operation can completely miss payments that were due – thereby making ALL of his accounting and ALL of his reports equally suspect of major errors?

Either way, in my mind, this shows, once again, that Joe Thomas is grossly incompetent at his job – or is it possibly an indication of ongoing fraudulent claims like the ones concerning Todd?  Clearly, the Judge did not believe Joe Thomas and his testimony in Court.

Maybe, you and other owners should not believe Joe Thomas either.

Fire Joe Thomas Now

Either way, in my mind, Joe Thomas should be fired, for cause, immediately.

It makes me wonder, in my mind, why the “board” continues to employ Joey and even give him a recent 10% raise in light of the multitude of evidence of his gross incompetence and gross mismanagement of GGRC and RML.

Does it make you wonder, too?

UPDATE:

Probably in response to the below posting and the growing outcry from other owners, Joey and the “board” just uploaded an insurance “quote proposal” from 10/07/10 onto the GGRC Blog.

Click Insurance Quote for a copy.

We have no idea if this “quote proposal” is, in fact, the policy that is currently in place, or if the payments are current, or if the annual premium shown on it as $45,480 that was due last November is correct.  My guess is that the final real policy was for more money than is shown on this “quote proposal.”  However, if this proposal turned out to be the real policy, GGRC according to the Master Deed, is required to have the full $45,480 in a separate insurance escrow account by September 1, 2011.

This means that there should be $36,384 in the escrow account as of June 1, 2011.  (I am taking bets that they don’t even have an escrow account – let alone having a segmented $36,384, thereby putting ALL owners at financial risk.)

The GGRC blog posting only has the document posted without any narrative discussion – so there is no word in the posting by Joey and the Gang as to the escrow account or its required funding.

Funny, you would think if they were doing things right, they would have gloated that I was wrong about the escrow account and the required funding.  Go figure.  However, in light of the new posting about Bouncing Payroll Checks, the below information is even more critical to all owners at Deer Ridge!

END OF UPDATE

An Additional MAJOR Risk To All Deer Ridge Owners

As previously mentioned in a prior post, we believe that there is very strong evidence that Joe Thomas and the “board” have, once again, put ALL Deer Ridge Owners at economic risk – this time with our property insurance.

Our annual insurance premium is approximately $45,000 to $60,000.

To protect all owners, the Master Deed (see below) requires that all premiums are escrowed in a separate escrow account to ensure that the funds are available when the annual premium becomes due…and that the full amount of the premium is required to be totally escrowed at least 60 days prior to the due date of the annual insurance premium.

New, Upcoming Motion With Court

By our calculations, the amount that needs to be immediately escrowed probably ranges from $30,000 to $42,000.

As a consequence, we plan on filing a new motion with the Court to force Joe Thomas and the “board” to immediately transfer these funds from the current GGRC operating account into a separate court administered escrow account for the protection of all owners.

What will be very interesting to see:  If the board even has sufficient amounts in our operating account to meet this required obligation of our Master Deed.

If these amounts are not escrowed, it is my opinion that this, by itself, is sufficient reason to fire Joe Thomas and the entire board for “cause” for gross negligence and gross incompetence.

However, if these amounts are not available in our operating account at this moment in time, it is my opinion that this, by itself, is sufficient reason to fire Joe Thomas and the entire board for “cause” for MASSIVE gross negligence and MASSIVE gross incompetence.

PRIOR POSTING

Below is the information we had previously posted that gives the proof of the requirement and the list of documents we are immediately demanding from Joe Thomas.

Insurance Escrow Account – Another Violation By The “Board”?

I am highly concerned about the economic viability of GGRC in light of RML’s huge $152,000 negative annual cash flow. Even Larry Ohm’s admitted loss of $55,000 for RML for all of 2010 would cause this same concern.  With that concern in mind, I am highly concerned that Joe Thomas and the Board of Directors have been negligent with regard to Article X of the Master Deed.

Article X, entitled “Insurance”, provides in Section 3 that all owners are to pay a separate check for their pro rata share of the Common Expense for insurance so that it can be deposited into a separate trust account.

I am highly concerned that there has never been any requirement of any kind by Joe Thomas and the board for any owner to abide by this requirement since my purchase in 2005.

I am further concerned that all owners at Deer Ridge are not being afforded the economic protection provided by Article X Section 3 of the Master Deed. I believe there may not be any separate escrow account established and properly funded in accordance with Section 3 of Article X.

Since the annual insurance premium is substantive at approximately $60,000, my calculations show that approximately $6,000 should be escrowed each month so the amount of the account balance should be sufficient to pay the annual $60,000 sixty days prior to the due date as required by the Master Deed.

Proof Of Protection For ALL Owners Against A Lapse In Insurance Coverage

It is critical for ALL owners that we have sufficient funds to pay our property insurance annual payment when it is due – and not risk ANY potential lapse in coverage that could very detrimentally affect us all.

By way of verifying that Joe Thomas and the board have properly abided by the Master Deed on these issues, I, will be IMMEDIATELY requesting the following be provided to me, in accordance with the Tennessee Horizontal Property Act:

• A copy of the current, and most recent three years, annual insurance policy cover page, showing due date of insurance premium, coverage and coverage dates.
• A copy of the current and past 24 months of bank statements for the separate escrow account that is required to be maintained for the insurance payment.
• Since I am also concerned that Joe Thomas and the board have fulfilled their commitment and promise to maintain a separate escrow account for the “special assessment”, I also request a copy of the current and past 15 months of bank statements for the separate escrow account that is required for the “special assessment.”

By my count, this should only require copying fewer than a hundred pages.

Assuming that Joe Thomas and the board have, in fact, properly abided by The Master Deed and Bylaws, I would assume there would be no problem in immediately providing these relevant and reasonable requests for information on my investment at Deer Ridge.

As a matter of fact, I would recommend that YOU, as an owner at Deer Ridge, immediately request these documents yourself since you also have a right to see them.  If you get them, please send me a copy.

What’s Your Experience With These Documents?

As to whether these documents and accounts exist, let me ask all owners:

• Have YOU ever written a separate check to the Insurance escrow account as required by our Master Deed?

If your answer is NO, then I think we probably already know the answers as to whether Joe Thomas and the board have been violating yet MORE parts of the governing documents for Deer Ridge Mountain Resort.

Even More Evidence of Gross Mismanagement and Gross Negligence By Joe Thomas And The Board?

It will be interesting to see if these documents and accounts exist – or, more expectantly, are yet again even more violations of our Master Deed and Bylaws by Joe Thomas and the board.  If these documents and accounts don’t exist in their proper format, it is my opinion that this, by itself, is sufficient reason to fire Joe Thomas and the entire board for “cause” for gross negligence and gross incompetence.

Stay Tuned – We Live In Interesting Times!

In my opinion, Larry Ohm, CPA, Treasurer and “board” member of GGRC, aka Deer Ridge Mountain Resort, has been lying to owners for years. Click the YouTube icon to watch in high def and full screen so you can see the numbers.

He attests that the books that he and Joe Thomas cook up are a fair reflection of the operations of both GGRC and RML. In my opinion, these are fabricated lies to mislead the owners at Deer Ridge.

This video shows you why I believe that to be the case.

Find the detailed math at www.DeerRidgeOwners.com/realrml

Prove me wrong if you don’t believe me. But don’t be fooled by the lies and the small checks you get from RML — you are losing a LOT more money than you are netting from using RML. Help stop the bleed from RML — Now!

We have filed a $3 million lawsuit against Deer Ridge Mountain Resort Gatlinburg, Tennessee, its General Manager and all individual board members. Several of these issues may be decided very soon in response to our Motion for Summary Judgment.

This video gives the background on one of these issues: The illegitimacy of RML, a wholly owned subsidiary of our HOA costing us $152,000 / year and has squandered nearly AT LEAST $1.3 MILLION over the past 16 years.

Our $3 Million HOA Lawsuit is against the HOA, Deer Ridge Mountain Resort, AKA Gatlinburg Golf and Racquet Club (GGRC) HOA. It is also against General Manager and “board members” Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, David Barone and Tom Reise, all as individuals.

Full details on lawsuit at: http://DeerRidgeOwners.com.

Primary goals of lawsuit:

1. Force HOA Board and General Manager to abide by both Tennessee State Law and Deer Ridge governing documents.
2. Do away with RML and Ridge Resort Realty as illegitimate ultra vires entities – and stop the $152,000 a year loss to our HOA, GGRC, each year caused by RML.
3. Force the HOA, GGRC, to abide by the Master Deed Percentages and stop financial discrimination against 36% of all owners.
4. Force the HOA to stop overcharging the 30 one bedroom owners by a whopping 82% each month.
5. Force the HOA to stop overcharging the 30 one bedroom owners for assessments, water, and other services.
6. Stop the board from making any alterations or additions to the Common Elements without both the 75% vote of all owners AND the 90% vote of all mortgage holders for all units at Deer Ridge.This is a specific requirement of our Master Deed but has ALWAYS been ignored by the Board. Over $200,000 illegitimately spent in last 5 years.
7. Force the HOA, GGRC, to abide by Tennessee State Law and finally provide the REAL books and records in the format required by the Horizontal Property Act of Tennessee.The Board has continuously fought providing these books and records to owners for more than FIVE YEARS. (Makes you wonder why, huh?)

We will have separate presentations on all four issues for Summary Judgment — so stay tuned for those videos at our blog and our YouTube Channel!

Summary Judgment And Temporary Injunction

 As you know from one of my recent postings, we finally have a hearing date set for my litigation against Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, David Barone and Tom Reise.  Copies of all four motions that will be heard on April 26, 2011 are shown below.  Click on each photo to download the entire Acrobat file for each document that has been filed with the Court.

We are covering several issues during this hearing that will be pivotal for this case that could cause a major, consequential and immediate impact to the way that Deer Ridge Mountain Resort is operated. We are asking that the judge issue an immediate ruling on his interpretation of the Deer Ridge Master Deed and Bylaws which we believe have been grossly and purposely misinterpreted by Joe Thomas and the rest of the Gang of Six.

 The changes resulting from a favorable ruling could include:

• The Judge’s ruling could determine, once and for all, how everyone’s monthly assessment is calculated, including HOA fees, water and cable TV bills. If we win this one point, all 30 of the 1-1 units should no longer be overcharged 82% every month on their HOA fee!
• The Judge’s ruling could determine, once and for all, how much, if any, will be owed by each owner on the current “special assessment” and the right amounts that should have been charged on all prior “special assessments.”
• The Judge’s ruling could determine, once and for all, whether the current charge to all owners for this year’s portion of the “special assessment” will be blocked by our motion for temporary and permenant injunction.
• The Judge’s ruling could determine, once and for all, whether RML and RRR (Ridge Resort Realty) are legitmate or not…and whether they were created as ultra vires acts by “board” members, making them possibly personal liable to repay all costs associated with RML and RRR for the past several years.  (My calculations show that RML alone has cost owners at least $118,000 a year…so multiply this by The Six years we’ve owned and that equates to over $700,000 that might be owed back to GGRC by the individual “board” members.)
• The Judge’s ruling could determine, once and for all, that all improvements and alterations require both a positive vote by 75% of all owners AND 90% of all mortgagees.  If the judge rules in our favor on this, that means that about $82,000, or 23% of the entire $353,500 Asinine Assessment were illegally spent by the “board” since they adamently refused to follow the Master Deed and Bylaws on this point, even knowing it was required.  If this ruling goes in our favor, the “board” can be judged, again, to have been acting ultra vires…which means that each of the “board” members could be held jointly and severally liable for the full amount of the illegitimate expenditures.
• This same ruling should make the “board” members also personally liable for all those past improvements and alterations that were done where they ignored my demands for the past 6 years to solicit the required 75% vote of all owners.  These include:
• • Joe’s Folly – The $80,000 picnic pavillion that should have never been built.
  • New pool decking – $30,000
  • Reception area and office improvements – $25,000
  • Maintenance building improvements and addtions – $15,000
  • Chairs for weddings, etc. - $3,200
  • Playground equipment – $3,000
  • New computers and office equipment – $5,000
  • Vehicles, golf carts, etc.  ???
  • Game room equipment  ???
  • Commercial laundry room equipment for RML ???
  • All of these monies were spent by the board without proper authority and approval by the owners at Deer Ridge.
• Some of these amounts are guesses and I am sure this list of improvements and additions is not comprehensive.  But once we are finally allowed to see the real books and records as provided by Tennessee state law, we expect that we will be able to add lots more to this list and correct the numbers here.  
• Even without the addtions, the above list adds up to more than $161,200 that would be ultra vires violations by the “board.”
• All totalled, this could make the “board” members individually responsible to personally pay back over $940,000. 
• If we divide this amount by the 5 board members, that would equal $188,000 that each would be responsible to pay.  However, it is my understanding that all board members are “jointly and severally” liable for this amount…which means that each board member is fully responsible for the whole amount if and when one board member or another doesn’t pay. If this happens, I can easily envision lawsuits being filed by one “board” member against another demanding that they pay their fair share of any court ordered reimbursements back to GGRC. If lawsuits between “board” members were to happen, all kinds of “smoking guns” disclosures might be uncovered.

The Other Key Motion

We also filed a Motion to Compel so that this Despicable Gang of Six is forced by the Court to finally turn over the Deer Ridge books and records.

• It’s been nine months since we filed our motion for production of documents with the Court — but so far Joe Thomas and the “board” have not complied.
• We have been waiting for nine months for Joe Thomas to turn over the books and records on GGRC that all owners have a right to see.
• Joe Thomas keeps adamantly stating that he has properly maintained the Administrator’s Book as required by Tennessee state law.  Joey keeps saying they have this information, in the right format — but they don’t seem to be able to produce it.

I wonder why?

Now, Joey and the Gang are trying to mark all of Deer Ridge’s books and records as “confidential‘ to keep us from sharing them with YOU – all past and present owners At Deer Ridge who also have a right to see and thoroughly study the books and records concerning OUR investment in our property at Deer Ridge.

They claim these books and records and the emails between the six Gang members “… may cause injury, prejudice or [particularly] embarrassment” to Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, David Baron and Tom Reise.

As our Motion states, these “embarrassing” consequences fall in the category of “sometimes the truth hurts.”

Additionally, our motion to block their “protective” order stipulates we completely agree that obvious information such as Social Security numbers, credit card numbers and the like will be treated as confidential….but NOT all the rest of the information that we will find in these documents.

We fully expect to find all kinds of “embarrassing” actions and statements, done and made, by this Gang of Six.

We fully expect to also find all kinds of other questionable activities that have been committed by these individuals.

And, we, and several other Deer Ridge owners, plan on looking VERY carefully and diligently for any and all signs of any potential civil and/or criminal malfeasance that might have, just maybe, been committed by any, or all, members of the Gang. As of now, we’ve not seen any documentation that proves malfeasance — but then again, we have yet to get the full books and records we’ve been requesting for over five years. Right now, we only have our overwhelming intuition that screams about ongoing malfeasance.

Maybe we won’t find any such malfeasance — but if we do, any and all guilty parties will suffer a whole lot more than simple “embarrassment.”

Maybe that’s why the Gang members are continuing their desperate FIVE YEAR long attempts to keep this information secret. They seem terrified their secrets are going to finally see the light of day.

We believe that’s one of the reasons that Joe Thomas and the Gang have fought so hard, for so many years, to keep this information out of the hands of the owners who deserve full visibility, full disclosure and full accountability from those who have been handling over $1 million a year on this property for a decade.

• What IS it that terrifies them so much about what we will find in those books and records?
• We ARE going to get to the bottom of this.
• We ARE going to get access to all the books and records that Joey and the board have tried for years to keep secret.

And, we intend to do everything we can to block their motion for “protective” order — so that we can share ALL of this information with EVERY owner At Deer Ridge Mountain Resort.

Note – Temporary Injunction To Block Special Assessment Payment – Should You Pay?

Notice that Section 4 of the Motion For Summary Judgment includes wording that we “seek a temporary and permanent injunction prohibiting and restraining the Board from attempting to make any alterations or additions to the Common Elements except in compliance with the seventy-five (75%) percent and ninety (90%) percent requirements of Article XII subsection 2 set out above, including the $340,000 “Special Assessment .. currently being billed to Association members.”  (The $340,000 is a typo that is being corrected to reflect the full $353,500.)

Bottom line:  We believe this wording blocks any and all collection by GGRC for the “special assessment” if the judge agrees with our motion. You should be your own judge of this document and its intent and decide for yourself if you are required, in light of this pending court action, to make the currently due special assessment payment.  We believe it is germaine that 23% of this special assessment is for walkway railings and lighting improvements that did not have the required 75% / 90% vote.  Also, germaine is that the calculated amount for every unit does not abide by the Master Deed Percentages – which means that the amounts of all payments due from all owners would be significantly different.

This seems like two very good reasons to me that the Judge should award both a temporary and permanent injunction against this Asinine Assessment.

Lots More Info

Please check out the following links for more information on these issues – and what we hope to gain from our $3 million lawsuit against  Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, David Barone and Tom Reise.

• Date Set For Summary Judgement And Motion To Compel Filed Against GGRC, Joe Thomas And Board 
• Videos on Deer Ridge Owners Litigation Coming To This Blog AND To YouTube!
•  HALF Of Your Annual Deer Ridge HOA Fees Pay To Support RML’s Negative Cash Flow 
• Deer Ridge Board – You Better Learn A New Latin Term – Ultra Vires
• How To Fire Joe Thomas And Save GGRC Tens Of Thousands $$$ Each Year
• Independent Legal Opinion: GGRC Board Guilty Of Numerous Violations / $353,500 Assessment Is Null And Void

Copies Of Motions Filed with the Court

Motion For Summary Judgement & Temporary Injunction - Click For Document	Motion To Compel - Click For Document
Motion To Dismiss and Judgment on Pleadings - Click For Document	Motion For Protective Order - Click For Document

Stay Tuned! 

We live in interesting times!

Tick…tick…tick.

PS:  I am not an attorney and these opinions are my own.  Please be sure and refer to the full disclaimer language in the side bars and the Terms of this website. 

PPS:  Be sure and watch this blog for upcoming news about our new domain name:  HOABoardAbuse.com and our two new video channels on YouTube.com:  DeerRidgeOwners.com and HOABoardAbuse.com.  In-depth videos are being produced to fully explain, to all Owners and the World, exactly what is happening both at Deer Ridge and at other abusive HOA Board run properties across the Nation.  These videos will be posted on both DeerRidgeOwners.com and YouTube.com. 

 Stay tuned – you never know what videos might go viral!

If you have not paid the Asinine Assessment for Deer Ridge Mountain Resort, you probably have already been sued by Joe Thomas and the rest of the Gang of Six.

In addition to their specious $1 million lawsuit against me, I have also been served with a Sessions Court suit for the non-payment of the assessment which I believe is completely illegitimate for at least four reasons.

If you live out of state, you may have already been sued by not yet been served by the constable or process server.  Once you are served you will have a yellow piece of paper like the one to the right which is a copy of their suit against me.

Your Five Options

If you have been sued, you have five choices, or paths, available to you in my personal opinion:

1. Pay them the money.
2. Declare bankruptcy.
3. Ignore the lawsuit and allow them to get a default judgment against you which would then allow them to foreclose on your condo.
4. Hire your own attorney and fight them in court using one of the four reasons, or some other defense.
5. Join with us in our current $3 million lawsuit against GGRC, Joe Thomas and the rest of the Gang of Six and fight them.

I certainly do not recommend any of the first three choices.  Your decision on which of the above paths is right for you is obviously up to you – but I would rather pay a lot more in legal fees to fight this unjust and illegitimate assessment than let these jokers continue to violate state and Deer Ridge regime law.

Joe Thomas and the rest of the Gang of Six have been doing as they please, without regard to our Master Deed and Bylaws, for way too long – and it is time to finally stop them and force them to pay out of their own pockets for the multitude of ultra vires acts they have perpetrated against Deer Ridge Owners for so many years.

My Defense Against Their General Sessions Court Suit

My attorney is already taking steps to block this Sessions Court suit on two issues, as I understand them:

1. Our $3 million lawsuit was filed a week before their Sessions Court suit which gives our suit priority.
2. This case is too complex for a simple Sessions Court non-payment suit.  We already believe we have four reasons to invalidate the suit.  Some of these will require declaratory judgments regarding valid interpretations of various parts of our Master Deed and Bylaws.  These declaratory judgments will be an integral part of the jury’s decisions regarding our case and hence are beyond the scope of the Sessions Court.

The above is my best guess at this point since the attorneys are still discussing an agreed order regarding this matter – but at this point, I fully expect that we will quickly win these points.

Your Best Choice – Join As A Co-Plaintiff In Our Suit

If you join as a co-plaintiff in our existing lawsuit, you benefit from lower legal costs and by participating in a lawsuit that probably pre-dates their Sessions Court lawsuit against you.  As a co-plaintiff, you can also share in any major awards and reimbursements of legal fees we may gain from our $3 million lawsuit against them.

I am not an attorney – but if you are interested, please contact me ASAP and I will put you in contact with my attorney so that you can make a fully informed decision.

You can now download one document that is a complete scan of one Deer Ridge owner’s notebooks of all his documents related to GGRC and RML from 1987 through 2009.

This may or may not be comprehensive – there were probably other documents during that time frame that didn’t make its way into this notebook.

To get your own copy of this document, just click History.

This Information Is Yours – And Can’t Be Blocked By Joe Thomas And the “Board”

However, as hard as Joe Thomas and the Board make it for owners to get copies of anything, we thought it would be worth the hours of effort it took us to scan in these 825 pages of history – so that all owners could have a digital version of their own.  This way, this information will never get lost, misplaced or destroyed – but live on forever – making folks accountable.

These 825 pages took us over 16 people-hours to pull pages from the notebook, remove staples and flags, scan in and convert the pages to searchable text, replace flags, return pages in the same order to the notebooks and to post the prepared Acrobat file on the Deer Ridge Owners blog at www.DeerRidgeOwners.com as a “Document You Can Download.”

That is a LOT of time and effort – but something we wanted to do for all Deer Ridge Owners.

Keyword and Key Phrase Searchable!

In case you don’t know, if you download this document or any of the Acrobat files we provide and add it on your own computer’s hard drive, you can do key word and key phrase searches of the entire document!

When we do these scans, we took the time to convert them into text.  It slows things down a lot – but it makes these documents a highly useable gold mind of information.

For example, if you search this document for the term, “Joe Thomas” you find his full name occurs 387 times and the word “Joe” occurs 654 times. Likewise, the word “assessment” occurs 105 times.

We have already spotted several “smoking guns” – which Joey and the Board are going to have a VERY hard time refuting since we plan on also using these History documents in our upcoming litigation.

Enjoy the history lessons.

Joey and the “board” are running scared – scared that the owners will all find out just how few of them are paying their illegitimate Asinine Assessment.

Joey and the “board”are trying all they can to block both Neil and I from having access to the GGRC books and records that the laws of the State of Tennessee guarantee us that we can see.  They know that once we see the books and know how few have paid the assessment and we report that information here on the blog, they will have a major problem trying to force other owners to pay.

The usual abuse of power by the “board” typically has to do with multiple, major violations of Deer Ridge Law – those contained in our controlling documents – The Master Deed and The Bylaws.

This Time Joe Thomas and Luther Parker Are Breaking The Law – Tennessee State Law – By Blocking Owner Access To Deer Ridge Records

This time they are directly breaking Tennessee state law by blocking our access to these records. I just emailed Joey, Luther Parker, Charles Sexton (attorney for GGRC and who knows who else involved with Deer Ridge? – but that is a different potential conflict of interest that we will get to soon.)

What I emailed them, and other interested owners, was a SECOND NOTICE. See below.

Ignore The Notices And Threats of Late Fees From Joe Thomas?

It is up to you – but I advise you to do what I am doing – to ignore the late letters, threats of late fees, etc. regarding your non-payment of the Asinine Assessment.

As describe before, the recent independent legal opinion we just obtained indicates that this “Special Assessment” is completely illegitimate on at least FOUR major points.

Note that, in spite of multiple requests, Joey and the “board” have not been able to produce ANY independent legal opinion as a counterpoint to the one we have obtained. We believe this is HIGHLY indicative that Joey and the “board” have NO authority for either the “special assessment” or for their blustering demands for payment.

Don’t give in to their illegitimate bullying about an illegitimate assessment.

Instead, use some of that money to help pay the necessary legal fees to block the assessment and force Joe Thomas and the “board” to stop breaking both Tennessee State Law AND Deer Ridge Law.  Once we get a court to issue a permanent injunction, you won’t have to pay the assessments, any interest, etc. on this illegitimate special assessment.

But we need your help.

Helping us pay for this litigation is a LOT less expensive than paying for $50,000 for “nuts and bolts” and a LOT less than paying your two year total assessed amount.

If we can get $500 or a $1,000 from more Deer Ridge owners, we can immediately stop their demands and harassment.

Please mail your check to me at A-202, 3710 Weber Rd., Gatlinburg, TN 37738 – please make the check payable to the “Deer Ridge Litigation Fund” OR click the link below to pay via credit card or echeck.

We Just Need $5,000 More To Stop The Assessment

We just need $5,000 more from other owners to add to what we have already collected from participating owners.

Once we received this additional $5,000, we intend to IMMEDIATELY file the lawsuit with ALL of our claims in this one lawsuit. Part of this lawsuit will immediately seek a temporary injunction stopping the Asinine Assessment and all threats from Joey and the “board.” The same lawsuit will also quickly pursue a summary judgment on at least 10 of the major points in the independent attorney’s letter – including making the injunction against the Asinine Assessment permanent!

Once this is out of the way, we will pursue the other part of this lawsuit – including our claims against Joe Thomas and this abusive and illegitimate “board” – making them individually responsible for their gross negligence and abusive, arbitrary and capricious decisions that were outside the scope of their authority.

The sooner we get your donations to the “Deer Ridge Litigation Fund” – the sooner we can cut off the harassment from Joey and the “board” over non-payment of the Asinine Assessment.

Donate Now

***  SECOND NOTICE  ***

I have not received a response to the below email….this is your second notice.

Failure to provide this information to ANY owner in a timely manner is a violation of Tennessee State Law.

I demand to have access to ALL of the requested information during the week of March 15, 2010.

Robert Goodman
A-202

At 10:40 AM 3/11/2010, Robert wrote:

Luther Parker and Joe Thomas,

In accordance with the Tennessee Horizontal Act, 66-27-113, I hereby request an immediate review of the GGRC, RML and Ridge Resort Realty “Administrator’s Books” as defined by the Act:  This is a single book that contains a detailed account in chronological order, of the receipts and expenditures affecting the building and its administration and specifying the maintenance and repair expenses of the common elements and any other expenses incurred.

My request is to see these “Administrator’s Books” AND “the vouchers accrediting the entries made thereupon” for the past four and a half years.  This request is NOT to see general ledgers, financial statements,  etc. – but to only see the “Administrator’s Books” that contains a detailed account in chronological order as specifically defined and REQUIRED by the Act.

Since the “Administrator’s Books” must be accurate, completed and ALWAYS up to date, I require that they cover the time frame of August 8, 2005 through the day before the scheduled day for my examination of the “Administrator’s Books.”

Since, again, the “Administrator’s Books” must ALWAYS be up to date and specifically in THIS format, this should present Joe Thomas with NO difficultly immediately complying with the LAW.

Note that the LAW requires that: “Both the book and the vouchers accrediting the entries made thereupon shall be available for examination by all the co-owners at convenient hours on working days that shall be set and announced for general knowledge.”

Just so there is no confusion about exactly what GGRC, RML and Ridge Resort Realty MUST provide any and all owners at Deer Ridge, I have copied the exact wording of the Act and include it below.

Also, note that page 1 of the independent attorney’s legal opinion letter (see attached) reaffirms my right to this information – and the usual Joe Thomas stupid “games” will not be tolerated.  The same legal opinion also provides that I have a RIGHT to COPIES of any of this information.

Any non-compliance by you and/or Joe Thomas will have immediate legal ramifications with the Attorney General of Tennessee – along with other judicial implications.

I strongly recommend you do NOT make your March 1, 2010 OR your 2011 “special” assessment payments to Deer Ridge.

Based on an independent legal counsel review of our Master Deed and Bylaws, his legal opinion is that this “special” Deer Ridge assessment is invalid for at least FOUR reasons:

1. The GGRC Master Deed and Bylaws do NOT allow for ANY kind of “special” assessment of any kind.  They only allow for monthly assessments that are set before December 1st of each year.
   
2. The amount of the assessment for every owner is WRONGLY calculated.  The “board” has applied what the attorney calls “arbitrary and capricious” cost allocations for ALL charges currently being paid by ALL owners at Deer Ridge.  This includes your monthly HOA fee, the amounts for water, cable TV, telephone AND the calculated amounts that are being charged for this “special” assessment.  The attorney says that ALL of these items MUST be in accordance with the Master Deed Percentages.  Hence, any amounts currently being charged to each and every owner for this “special” assessment is wrongly calculated and should not be made!
   
3. The “board” was required to provide COPIES of the detailed bid requests and bids to any and all owner to substantiate the Asinine Assessment’s outrageous $353,500 price tag – and NOT to just list, “Nuts and Bolts – $50,000!”  Since they were unwilling to do so, this assessment is voided.
   
4. The attorney has stated that the “board” is NOT the board.  The board is required to be elected at the annual meeting and the annual meeting is REQUIRED to be held in the first three months of the year – not in April.  The attorney states that the board is not the board and is powerless to implement ANYTHING.

For at least these four reasons, do NOT make your assessment payment for GGRC.  You can read the full legal opinion from outside counsel by by clicking Legal Opinion.

Declaratory Judgment And Injunction

Instead of each of you paying $3,400 to $5,500 for this illegitimate assessment, join with us in obtaining a court ordered injunction to legally STOP this illegitimate “special” assessment and get a declaratory judgment from the court that will force this “board” to finally abide by our Master Deed and Bylaws.

To get an injunction, we need to file a lawsuit asking the court to rule on the interpretations of the GGRC Master Deed and Bylaws.  We need your help with the legal fees that will be required to stop this assessment – and also to have the injunction and declaratory judgment provide for the full and complete return of monies paid in by owners who have already paid.

We ask that each owner to join with us and contribute $1,000 to cover legal fees and court costs to finally get this stuff resolved.  If you can only do half of that amount or even less, those contributions would also be helpful and appreciated.  The more contributions by owners, the more that can be litigated and the more likely we will win the case.  (Bear in mind, nothing in court is ever a 100% sure thing!)

Our goal will be to also have the lawsuit go after recovery of all of our legal costs so those monies can be repaid to the owners who are willing to stand up and fight this fight.  You can pay securely online via credit card or echeck by clicking Donate or mail a check to me at the address shown below and making the check payable to “Deer Ridge Litigation Fund.”

This $1,000 is a LOT cheaper than paying the outrageous amounts ranging from $3,400 to $5,500 for this illegitimate “special” assessment. Any unused funds will be returned, pro rata, to those Deer Ridge owners who contributed.

We have received several indications that monies already paid by owners into this “special assessment” are being squandered for other purposes – and we want to help make sure that all owners get all of their money back BEFORE it is completely squandered on a multitude of “uses” that were not even listed on the notice from the “board.”

Judge For Yourself

I have my opinions about things. Luther Parker and the “board” have their opinions about things.  Here, for the first time, we have a LEGAL opinion from an independent attorney about what is really happening with your investment at Deer Ridge.  The “board” has not shown any comparable, independent legal opinion.  I am not an attorney – and neither is any member of the “board.”

I invite you to read the entire five page letter from Senior Partner Lewis Howard, Jr. at the law firm, Howard and Howard (www.howardhowardlaw.com).

Also read my open letter to Luther Parker and the “board” titled “Independent Legal Opinion: GGRC Board Guilty Of Numerous Violations / $353,500 Assessment Is Null And Void” and judge for yourself and reach your own conclusions.

You can find both at www.DeerRidgeOwners.com.

Questions / Want To Help Block The Assessment With An Injunction?

Please contact me ASAP at litigation@deerridgeowners.com if you would like to help stop this illegitimate assessment.  Time really is of the essence on this!

With your help, we can stop what the attorney calls “the ongoing abuse of power” by the current “board” and return Deer Ridge to operating legitimately within the legal documents of our Regime.

It is past time to stop this “ongoing abuse of power.”

It is time to replace all of the current “board” with owners who will not abuse their power – and who will abide by the controlling documents of Deer Ridge.

Independent Legal Opinion:   GGRC “Board” Guilty Of Numerous Violations / $353,500 Assessment Is Null And Void

The following is a copy of an email sent to Luther Parker, other “board” members and Joe Thomas on February 18, 2010 describing the legal findings of a real estate law firm concerning Gatlinburg Golf and Racquet Club – GGRC – and its subsidiaries RML and Ridge Resort Realty.

The findings of the law firm will probably change EVERYTHING about the way Deer Ridge is operated and managed.

Luther and the Board:

As I mentioned during the Special Meeting of February 6, 2010, I had personally hired a Knoxville-based real estate law firm to review many of the major conflicts and issues that have arisen between myself (and other owners) versus the Board, Joe Thomas and the decisions and policies you have been attempting to implement.

My instructions to the law firm, Howard and Howard ( www.howardhowardlaw.com/ ) and Senior Partner Lewis Howard, Jr. were to objectively and candidly evaluate these issues with the goal of determining the legal validity and the merits of our pursuing a lawsuit against GGRC and/or the individuals who make up the current board along with Joe Thomas, the general manager.  This firm does not currently represent us for any pending litigation – but may be hired should we move forward.

The full legal opinion I received from them is attached to this email – with each and every part shown and discussed below – with my comments for each section.  Note:  I am not an attorney and do not practice law – so these are my interpretations of the sections of the attorney’s letter – trying to convey the realistic meaning from the necessary legalese.

Executive Summary Of Attorney’s Findings

For those who prefer to start with an executive summary, here are the bottom line findings by the attorney with regard to GGRC and the actions of the “Board” and Joe Thomas:

• You are REQUIRED to charge all owners ONLY in accordance with the Master Deed Percentages for everything:  monthly assessments, water, cable TV, etc.   This means no more 82% overcharge to all 1-1 owners.
• You are REQUIRED to provide all owners with COPIES of everything they request including invoices, check stubs, bids, etc.
• You are REQUIRED to get BOTH the 75% positive vote by owners AND the 90% positive vote by mortgage holders of all condo loans at Deer Ridge.  Therefore, ANY monies you spend on walkway ramps will be your personal responsibility to pay.
• You are NOT allowed to ever have ANY special assessments – hence, the Asinine Assessment of $353,500 is NULL and VOID.  No owners are required to fund a penny of this money – and any monies received MUST be returned to those owners who have already paid.
• You and other board members are going to be liable to repay ALL overcharges to both current and past 1-1 owners, along with interest.  (This means you will be required to pay us back over $10,000 in our case – and more or less the same to other 1-1 owners – past AND present.)
• RML and Ridge Resort Realty are NOT legitimate – and must pay back every penny of GGRC’s money ever used for them – and these companies must be expeditiously sold.
• All “annual meetings” held in April are not official Annual Meetings – hence, all decisions, and votes made, INCLUDING board member elections, are NULL and VOID.  This means that Luther Parker and every other member of the “board” are, in fact, NOT members of the Board and have no power whatsoever including setting assessments, making special assessments, setting rules and regulations, agreeing to any contracts about anything, etc.  We will sue to have a special master appointed by the court.
• No board member or committee member may receive ANY compensation INCLUDING reimbursements for travel, meals, maid service, free storage or special remodeling of board member’s OR committee member’s units.  When we do our review of the books and records, we are going to add up every penny that has ever been paid and individually sue each of you for the full and complete reimbursement of all of this money.
• The entire current “board” has committed multiple ultra vires acts that were outside the scope of authority granted you by the Master Deed and Bylaws even if you were a legitimate board.  As such, these acts show gross negligence on your part and on the part of your “unified board that speaks with one voice.”   As noted in the attorney’s answer to Question 12, these illegitimate acts of yours are actionable with all monies recoverable from you and all other “board members” and Joe Thomas personally – probably on a “joint and several” basis. That means we are going to go after the FULL amount for each illegitimate act from you and each of the board members until we collect EVERY penny that was spent on decisions that were outside the scope of authority.  Based on my prior blog postings, I have already identified over $120,000 that has been spent without the proper Article XII approvals.

Those are pretty much the highlights – and as you can see, most of the above will have a MASSIVE impact on GGRC, RML, Ridge Resort Realty and each member of the “board” personally.  It will also rightfully put $10,000, more or less, back into the pockets of all PAST AND PRESENT 1-1 owners who join with us in the lawsuit against those responsible for our gross overcharge of fees.

The above issues are the way things SHOULD have been done all along – and we WILL hold those accountable who have capriciously and arbitrarily chosen to ignore the controlling documents of Deer Ridge and GGRC Regime.

You all will NOT be able to claim ignorance on these issues – all of these issues have been brought to your attention multiple times over multiple years.

What Say You Luther?

You are hereby put on notice to immediately resolve all of the above issues.

If you do not, one of our expected remedies will be to file a derivative action suit on behalf of GGRC naming each of you, individually, as defendants in that lawsuit.  This particular lawsuit will allow us to recover funds from all of you, individually, and require that the entire board be fired, with cause, for gross negligence.  And, since this will be GGRC suing you, none of you will be able to use any past or current attorney who has represented GGRC.

Another legal action we intend to take will be to immediately gain an injunction blocking the special assessments and inter-pleading any and all funds already received to a court controlled account.  Another legal action we intend to take will be a declaratory judgment suit over the above interpretations of the Master Deed and Bylaws.

Another legal action we intend to take will be for multiple past and current 1-1 owners, such as myself, to sue the board members, individually, for the 82% overcharge of all costs going back for years.  Other, additional litigation is planned as needed.  Bear in mind that we intend to also sue each of you for full recovery of all of our legal and court costs – and since it is fairly apparent we will win the issues, we expect to win on the legal fee recovery too.

Discovery motions will be immediately made that will require GGRC to turn over COPIES of ALL books and records related to GGRC and RML, et al.

So, Luther, are you going to continue to try to self-servingly block full and complete implementation of all of the above issues – or do you want to save everyone time, hassle and money by settling all of these issues here and now before we take the next steps?  If you attempt to delay the above by squandering GGRC money for legal fees to protect yourself and other board members and Joe Thomas, you will be held accountable for this waste of money also.

You have THREE DAYS to satisfactorily respond to this email before I move forward with the necessary steps to accomplish all of the above.  This process will start with a postal mailing to all owners, providing them with a copy of the attorney’s letter, advising them that they should not make any assessment payments and asking for them to join with me as co-plaintiffs against you and the rest of the “board.”

So, what say you, Luther?  How do you want to get to the inevitable Point B?

The Attorney Letter – And Analysis

The following dissects the letter from the attorney with snapshots of each part of the entire document.

This first image shows the law firm, date, attorney and that it deals with GGRC issues.  The letter responds to 13 sets of questions I posed with regard to Deer Ridge and the operation and management of GGRC, the property and with regard to RML.

This point discusses that all owners have a right to COPIES of all the books and records.  Wanting to make sure it was even more clear, I received the following email from the attorney:

This makes it crystal clear that ALL owners have a right to COPIES of books and records related in any way to GGRC.  Period.

Bear in mind that as soon as we file any of our planned litigation, we WILL produce a motion for discovery FORCING you to turn over COPIES of all of these documents.

Also, bear in mind, Luther, if we have to litigate this and go for a declaratory judgment, you will most certainly lose on this point.  This should not even be a point of issue with a Board that was open, transparent and honest.

So, based on the above, are you and the Board going to continue to interfere with the owners have their legal rights to copies of the GGRC et al books and records?

Luther, this is the crux of most of the intolerable abuse of power by Joe Thomas and the Board.  You all have claimed reliance on these two sections to blatantly ignore the requirements of the Master Deed and Bylaws.  As you can see, the attorney is saying exactly the same thing I have been telling you – Article III, Section 9(c) does NOT let you get away with your “arbitrary and capricious reallocation of ownership in the common elements or the common expenses.”  Likewise, the same thing for Article V – which means you cannot simply charge the same amount to all unit sizes for any of the expenses.

Luther, ALL allocations and common expenses, including the HOA fees, the water, cable TV, telephone, etc. MUST be charged in accordance with the Master Deed Percentages.  Period.  You all do NOT have a choice.  You all CANNOT be arbitrary and capricious. You MUST abide by the Master Deed Percentages.  This should not even be a point of issue with a Board that was open, transparent and honest.  So, based on the above, are you and the Board going to continue to be arbitrary and capricious – or are you going to IMMEDIATAELY adjust all costs to reflect the Master Deed Percentages?

Point 3 relates to your statement in the November budget meeting that, “an 82% over charge to the 30 1-1 owners was ‘fair and equitable.’”

Clearly, it is NOT.

So, based on the above, are you and the Board going to continue to be arbitrary and capricious – or are you going to IMMEDIATELY adjust all costs to reflect the Master Deed Percentages – and stop overcharging all 30 1-1 owners by 82%?

Uh oh.  Trouble in River City for the Board.  Could it be that special assessments are NOT authorized whatsoever???  See the interesting details below.

As you can see, all of those overcharges you guys have made for years can be recouped by me and all the other victims of your “arbitrary and capricious” wrongly calculated assessments.  For me, that adds up to over $10,000 and I want all my money back with at least interest.  It doesn’t look like I can get monetary damages – at least on this point – though it may depend on what type of litigation we pursue.

NOTE:  All 1-1 owners now, and in the past, will have a CLAIM for the board’s arbitrary and capricious overcharges – to get back your money and interest and probably legal fees to sue them!  If you want to join with me as a co-plaintiff, please email me ASAP!

Here is a BIGGIE – RML and Ridge Resort Realty are NOT legitimate, just as I have claimed for years.  RML was illegally formed by the board in 1987 with zero vote of the owners for one thing – but even beyond that point, it is NOT an appropriate use of any funds as described above.

We expect to file a derivative action suit, as GGRC, against you, individually, and all the board members and Joe Thomas, individually, to force the IMMEDIATE divestiture of both RML and Ridge Resort Realty and for reimbursements of any and all costs associated in any way with the formation and operation of these two illegitimate companies.

I personally want every penny of MY money back that was ever spent in any way to support RML and Ridge Resort Realty.

If you would like me, with my 15 plus years of real estate experience to help with the quick and IMMEDIATE divestiture of these companies, please let me know.

As I have claimed, all Annual Meetings held in April are NOT Annual Meetings as defined by the Master Deed.  And, since the Master Deed REQUIRES that the Board of Directors is ONLY elected at the Annual Meeting, you, Luther Parker, and the rest of this current “Board” were NOT properly elected and any and all decisions made by you all are null and void and without effect.  As such, I intend to file suit to have the Court appoint a Special Master to oversee all operations of GGRC and the immediate divestiture of both RML and Ridge Resort Realty.

Now, if you really hurry, since this is February 18th, you COULD get a quick 30 day notice out to all owners moving the April “Annual Meeting” to the first quarter as required by the Master Deed.  That would allow for the proper election of the new board without the need for a court-appointed Master.  However, if you wait or still try to hold the “Annual Meeting” in April, and I am successful with my point of law, this means that the Master would be running GGRC until the first quarter of NEXT YEAR.

So, what say you Luther?  Are you going to quickly try to abide by the controlling documents of our Regime – or are you going to toss it all into the court appointed Master’s hands?

There are SEVERAL very interesting parts to the attorney’s response to this Question 8.

First of all, just to be clear to Tom Reise – you guys are NOT in the “driver’s seat” and you cannot simply ignore the provisions of Article XII REQUIRING you to get the 90% vote of the mortgage holders of all condo units at Deer Ridge!   If you all proceed in ANY way with the demolition or construction of your aluminum walkway railings, you will be in direct violation of the Master Deed.  Period.  You have been WARNED.

The second interesting concept here is the one mentioned in one of my recent blog postings:  ultra vires acts.  I warned you all in that posting that you had each better talk with your individual attorneys because ANYTHING you do, or HAVE ALREADY DONE, that are outside the scope of authority granted you by the Master Deed and Bylaws, subjects EACH of you personally to be grossly negligent.  This means that you will NOT be able to rely on the D and O insurance to protect you, nor to use legal counsel of GGRC to defend you.

It also means that some owners, me included of course, can name you all individually in a derivative action suit.    You all need to really understand how a derivative action suit works – since that means we can sue each of you, on behalf of GGRC as our plaintiff.  Now, that sounds interesting.  And, it means that all the owners would get paid back from your pockets – not from GGRC’s bank account.  For me, that will be most fitting – considering the long term abuse of power that has existed at Deer Ridge.

Now, are you SURE you want to start spending YOUR money replacing those walkway railings?

Alas, this was the one point that did not YET go our way.   We are still investigating ways to get this one to happen too, but we may have to wait until we replace three of the current board members.  We also expect that Tennessee and other states will follow Nevada’s lead in REQUIRING all HOA board meetings be digitally recorded.

Now, things get very interesting.

NOTE TO ALL – BASED ON INDEPENDENT LEGAL OPINION,
IT LOOKS LIKE NO ONE IS REQUIRED TO FUND ANY PART
OF THE $353,500 ASSESSMENT!

That felt good to say.  This part was so amazing that I even went back to the attorney and asked for clarity.   He assured me saying he stands by this answer.  What this means folks is that the board, even if they were properly elected – which this one is NOT – can never do a special assessment.  They can only raise the monthly fees to properly build a reserve fund (the monies that were in the reserve fund as recently as three years ago have seemingly disappeared – probably in covering the negative cash flow from operations of RML.)

Additionally, even if it had been legal, the Board’s unwillingness to provide us copies of all the records tied to this Asinine Assessment would have invalidated the assessment.

If you would like to join with me in blocking your upcoming assessment, please let me know ASAP.  We intend on filing an injunction against GGRC and the Board from even attempting to enforce this assessment until full resolution of our lawsuit(s).

Clearly, the “Board” has not acted fairly and equitably with regard to me, or other full time owners at Deer Ridge.  Stay tuned for a LOT more about this.

Luther, we believe that there will be a massive amount of evidence that will show that you and the other “board” members and Joe Thomas have repeatedly committed ultra vires acts that were outside the scope of authority granted you by the Master Deed and Bylaws.  As such, these acts will hopefully show gross negligence on your part and on the part of your “unified board that speaks with one voice.”   As noted in the attorney’s answer to Question 12, these illegitimate acts of yours are actionable with all monies recoverable from you and all other “board members” and Joe Thomas personally – probably on a “joint and several” basis.

That means we are going to go after the FULL amount for each illegitimate act from you and each of the board members until we collect EVERY penny that was spent on decisions that were outside the scope of authority.  Based on my prior blog postings, I have already identified over $120,000 that has been spent without the proper Article XII approvals.  I am sure as we dig into the records, we will discover a LOT more.  Would you like to write us a check for the full $120,000?  Or, would you rather have Margie or David pay all of that for you?

This Question 13 answer is pretty crystal clear Luther.  No one gets a penny for serving on the Board.  This means NO reimbursement for anything including travel, meals, maid service, free storage or special remodeling of board member’s OR committee member’s units.  When we do our review of the books and records, we are going to add up every penny that has ever been paid and individually sue each of you for the full and complete reimbursement of all of this money.

For example, let’s talk about Margie since she seems to have been on the Board for years.   If she got $300 per meeting for travel and attended 5 meetings a year, which is $1,500.  Let’s assume other stuff added up to another $500 a year for a total of $2,000 a year in illegitimate benefits.  If she had gotten these ill gotten gains for say 10 years, this means that Margie will immediately owe us $20,000.

If this same amount was paid out to ALL board members and some committee members, the total amount that could be owned back could exceed $200,000.  That’s almost enough to get all the work done at Deer Ridge that REALLY needs to be done.

Of course, my personal intuition is that she and other board members have received a LOT more quid pro quo that will have to be paid back – but we will see.

Have You Noticed A Trend Here?

I assume you have noticed that I have been spot on RIGHT on everything I have been saying for years on my blog – and that your vilification, slander and libel contained in your diatribe letter you recently mailed to all owners was obviously full of lies and disinformation as a way to attempt to falsely discredit me.  This objective legal opinion validates virtually EVERYTHING I have been saying for years.  And, if need be, we will take the board members to court to prove it with finality.

I, along with many other owners, are sick and tired of the board’s “arbitrary and capricious ways” of illegitimately running GGRC and Deer Ridge – and I continue to be highly motivated to resolve these issues once and for all so that this property is finally properly governed by its Master Deed and Bylaws.

Luther, if you want these matters settled, you have three days.  The clock is already ticking.

Govern yourself accordingly.

Robert
A-202

Joe Thomas and the board make a big deal out of the fact that we have audited financial statements for GGRC and RML – and that, because of this, owners don’t have any need for copies of the books and records.

They make out that this “comprehensive oversight by an outside accounting firm” should give all owners complete confidence that all the books and records of our homeowner’s association are being done correctly.

This is a fallacy — and many owners are being lulled into false complacency just because they are being told the books and records are “audited.”

Hickman and Company A.K.A. Hickman and Associates

These folks have been our auditors at least for the past 8 years since I know they did the audits for 2002.

Is this some large regional, certified public accounting firm that has the proper, internal controls and procedures to thoroughly audit an organization and uncover any misdeeds or malfeasance that may be present in our homeowner’s association?

Judge for yourself.

Their website can be found at http://www.hickmanaccounting.com/about/

As you can see from their website, “Hickman and Associates is a tax and bookkeeping firm located in historic downtown Sevierville, Tennessee. A family firm, we have proudly served the community with three generations of for over fifty years.  Hickman and Associates currently has four employees (all family members.)”

While these folks may very well be good bookkeepers and accountants, it is not clear from their website that any of the four of them is currently a CPA.  It also is not clear whether this firm has ever had any recent peer review by the American Institute of Certified Public Accountants.  The AICPA requires most CPA firms which claim to do audits have this periodic peer review to help ensure that audits are done correctly.

Again, I know of absolutely nothing negative whatsoever about this company, it owners or employees or its bookkeeping and accounting services.  I will take on face value that they must have at least one certified public accountant who participates in the annual GGRC and RML audits they do for Deer Ridge.

Accounting Company Concerns

Even if Hickman are the best accountants and bookkeepers in the world, another major concern is that such a small firm may be overly dependent upon the business handed out by Joe Thomas.  For such a small company, two audits and the bookkeeping services for Deer Ridge could make up a significant of their annual revenue.

During the Special Meeting that was held on February 6, 2010, Joe Thomas stated that we pay Hickman and Associates, et al the following each year:

• $1,300 for the GGRC audit and $1,800 for the RML audit.
• $5,400 for the GGRC bookkeeping and $21,000 for the RML bookkeeping.
• Total annual payments to Hickman from GGRC and RML:  $28,600

What percentage of Hickman’s four person accounting company’s annual revenues does the above $28,600 represent?

If, hypothetically speaking of course, Joe Thomas threaten to take “his” GGRC and RML accounting business elsewhere unless the books were “cooked”, would such a small firm feel compelled to bend the rules or “look the other way?”

Consider that much larger CPA firms have been influenced by similar circumstances. (Example: Bernie Madoff’s auditor, David Friehling, CPA of Friehling & Horowitz, a tiny CPA firm that operated from a 13-by-18-foot office.  Or, consider the 89 year old, 28,000 employee firm, Arthur Andersen CPA, that went out of business as a result of their federal criminal conviction for manipulation of the books for a company called Enron.)

Again, Hickman is most probably a very reputable firm with great people — but the above should be major red flags to all Deer Ridge owners that just because financials are audited does NOT mean that they are right – or that owners are protected from fraud.

What Exactly Is Audited?

Even if the CPA firm is doing a reasonably competent job, there are major opportunities for potential malfeasance at Deer Ridge.

Could something like that be happening at Deer Ridge using the small accounting firm that depends so much on Deer Ridge business?  Again, it may or may not be an issue here with Hickman and Associates — but how can we know for certain?

The first thing to know about most audits is that all transactions are NOT checked.  Most audits would only include “spot checking” sporadic accounts – and in many cases the CPA firm is directed by the client company to only check specific accounts that they know are pristine.

Let’s look at Hickman’s own cover letter for the audits they do for Deer Ridge:

“These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

“We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.”

So, what does this mean?

They claim no responsibility whatsoever for the financial statements themselves – washing their hands of it like Pontius Pilate – distancing themselves from whatever was contained in those Joe Thomas directed financials.

Secondly, and this is key, their audit only includes a smattering taste test of entries on those financials.  So, how much was tested?  Which accounts were tested?  Who, really, decided which accounts were tested?

No matter those answers, it is clear that our audit was NOT the thorough review of all accounts and all bills and receipts that many folks have as their preconceived notion of an audit.

Some “Hypothetical” Examples of Possible Fraud At Deer Ridge

Let’s consider the wild and crazy idea that our much beloved general manager, Joe Thomas, was not the pillar of honesty and forthrightness that Luther Parker asserts.

I know — it’s hard to imagine that Joe Thomas would even take a nickel that did not belong to him.  But let’s assume, for argument’s sake, that there was a bad and evil general manager running Deer Ridge – instead of the saint we are so blessed to have controlling our money.

Is there any possible way that this fictional bad and evil general manager could possibly circumvent the audits of GGRC and RML?

Let’s consider some hypothetical examples:

• Our general manager decides to have his personal house painted for $12,400.  As part of the deal for choosing the painter, he requires them to mark the invoice that the work was done at Deer Ridge.  The general manager then marks the invoice with the proper chart of accounts number for Deer Ridge maintenance and then files the invoice with the other maintenance receipts for the year for Hickman bookkeeping to enter into the general ledger.

  In this case, even a good auditor doing a normal audit would probably not uncover this embezzlement.  The only way this might be caught would be by owners reviewing copies of all the books and records.  Even then, it would take someone who could connect all the dots to understand that no work at Deer Ridge was actually performed for this $12,400 expenditure.

  An even harder thing to catch would be a derivative of this:  The general manager is getting ready to award a $170,000 paint bid for painting all of Deer Ridge.  But he either requires the contractor to ALSO paint his house for the same dollars – or agrees to a higher bid of $185,000 if it also includes his house – but still only lists the Deer Ridge property as being painted.

  Again, even a forensic audit might have a problem catching this kind of malfeasance.  But owners seeing all the books and records, including all competing bids for painting the property, would probably catch this.

  And, here is the important part:  Knowing that any and all owners had a right to have copies of all the books and records, including all competitive bids, might worry a bad and evil general manager so much – that they would not want to risk being investigated.

• Next example, our general manager decides to go to Myrtle Beach, South Carolina on vacation.  He secretly cuts a deal with the manager or owner at a Myrtle Beach resort for free use of their luxury ocean front condo for two weeks – in exchange for the manager or owner of the Myrtle Beach resort to use one or more Deer Ridge Mountain Resort condos for him and his family.

  Of course, our general manager doesn’t OWN any condos at Deer Ridge – so he finagles the secret use of units managed by RML to fulfill his side of this bartered deal.  Since he doesn’t receive any money, there are no rents ever paid to the actual owners of the units at Deer Ridge.

  Again, even a reasonably competent auditor would probably not be able to uncover this embezzlement either.  The only way it could probably be spotted would be a review of copies of all the RML books and records including the computerized reservation system (excluding any and all credit card info of course.)

• Our fictional bad and evil general manager has some golfing buddies who want to party at Deer Ridge.  He tells them, “Pay me cash for just one night and I will give you a whole week’s stay in a nice unit.”  The general manager pockets the cash, marks the unit as unavailable and the owner never knows their unit was used.
• Our general manager decides to have big weekend parties during the month of October to celebrate Oktoberfest in the mountains.  He orders a massive amount of food and beverages for these occasions — but over orders intentionally so that he can take the lion’s share home for his personal consumption.
• Our general manager decides at budget time to pad various accounts so that he can have the maneuvering room to use money undetected.  For example, hypothetically speaking, he has a budget of $10,000 for “seasonal decorations.”  In this budget, he shows a receipt for $1,700 worth of pumpkins including buying one pumpkin for a whopping $300 (these were actual numbers for 2009 according to Joe Thomas at a recent board meeting.)

  However, back to our story, assuming the $1,700 was spent, there were no other seasonal decorations bought during the year.  This would give our general manager $8,300 slush fund to use anyway he wished and still be able to report that he stayed under budget. But, back to our pumpkins:  What if the real costs for those pumpkins were only $700 – and a bad general manager pocketed a $1,000 as a kickback?  Or, how do we know if the pumpkin company was really owned by the evil general manager’s wife or son?

• Our bad general manager edicts that all units in RML must have new mini-blinds for all windows so that all units are upgraded and standardized.  He orders all the blinds from one company and cuts a deal that they have to provide free delivery.  However, he is creative and takes their letterhead and makes his own shipping invoice for $2,500 which he pockets.

Again, those are a half dozen simple, hypothetical examples of how malfeasance could slip past most audits IF we didn’t have our current saint for a general manager.

No Checks And Balances At Deer Ridge

Based on comments made at the February 6, 2010 Special Meeting, Luther Parker admitted that there are NO checks and balances of ANY kind in place at Deer Ridge.

Luther stated that:

• There are NO written policy manuals for Deer Ridge and the operation of GGRC and RML.
• There are NO written Delegation of Authority forms that are signed and on file.
• There are NO written systems and procedures for GGRC or RML.
• There is NO written employee manual.

Folks, this is Management 101 stuff that they teach in freshman year of undergraduate school.

Additionally, it appears that no one on the current Board of Directors performs ANY kind of managerial review of any of the actual receipts for goods and services paid at Deer Ridge.

• No one ensures that every check that is written at Deer Ridge pays for what is used and needed at Deer Ridge.
• No one sees ANY of these documents – except Joe Thomas.
• No one even questions Joe Thomas on any of these issues.

In my opinion, all of this is grounds by itself for finding the entire Board of Directors guilty of Gross Negligence and Gross Incompetence!

Management 101 Stuff, For God’s Sake!

Even if we assume we have a 100.00% honest general manager, common business sense would dictate that you have these kinds of systems and procedures, policies and written delegation of authority’s and checks and balances in place to ensure that no nonfeasance or embezzlement can ever take place.

And, on top of all that, Joe Thomas and the board refuse to allow owners to have copies of all books and records that would help the owners ensure no malfeasance or embezzlement was taking place.

What are Joe Thomas and the board trying to hide?

Joe Thomas — The Deer Ridge $10 Million Man

According to the 2010 budget issued by the board in December 2009, GGRC and RML will handle cash receipts of over $1.1 million during this calendar year.  This includes HOA fees, special assessments and RML revenues.

Assuming this was a typical year, that means that Joe Thomas during the past nine years would have handled over $10 million related to Deer Ridge.

This is a massive amount of money.  Huge.

• And, NO checks and balances in place?
• NO systems and procedures, policies and delegation of authority are in place?
• No forensic audit to help ensure that everything is done right?

This is INCREDIBLY bad management by President Luther Parker and the entire board of directors.

I am sure that Joe Thomas greatly prefers to continue things as they are:

• Completely unaccountable to anyone about anything.
• Completely allowed free reign to pretty much do whatever he wants to do with the $1 million plus a year that passes through his fingers.
• Completely insistent that NO owner EVER gets to make copies of any books and records that might catch any malfeasance.

Folks, even if trust your employees, it is incredibly bad management to not have the checks and balances in place to make sure you are protected just in case you hire someone who is not honest.

And, all of this goes beyond holding the general manager position accountable.

Joe Thomas, as general manager, is guilty of gross negligence and bad management by not having a written employee manual, and other control documents, in place in case of lawsuits, EEOC actions, claims of organizational misconduct for drug abuse, claims of sexual misconduct, etc.   Even a $100, fill-in-the-blank software program could solve the problem regarding an employee manual.

Plus, good management practice dictates that ALL positions in an organization should have WRITTEN systems and procedures, policies and delegations of authority.  There are all kinds of risks to GGRC and owners by this gross oversight by both Joe Thomas and each and every board member.

It Is Past Time For A Change

Lots of changes are needed at Deer Ridge.

Immediately fixing this massive policy and procedures hole is one of them.  Firing the Board and Joe Thomas for gross incompetence and gross negligence are also at the top of my list.

But the immediate thing to do is to give ALL owners oversight into what is REALLY happening, financially and operationally, at Deer Ridge.

And, we do this by allowing ALL owners to have copies of ALL books and records – so that all of us can audit the books, so ALL of us can institute our own checks and balances – so that all of us can finally have some assurance that things have been done right.

So that we know if ANY of our $10 million has been embezzled or misappropriated in ANY way.

All it takes is Luther Parker finally agreeing to allow COPIES of all books and records will be made available to ALL owners – starting at 9 AM yesterday morning.

If he doesn’t, we ALL should be wondering:  Exactly what ARE they trying so desperately to hide from the owners?

We have just hired an established real estate-focused law firm in Knoxville to begin our legal pursuits against GGRC, Joe Thomas and the current Board of Directors of Deer Ridge Mountain Resort.

We have already paid the necessary retainer – so watch this blog closely for upcoming developments.

Do YOU believe that ALL owners of Deer Ridge deserve the following from their General Manager and Board of Directors:

• Transparency?
• Full accountability?
• Open and responsive communications?
• Right to audio recordings of all board meetings?
• Genuine access to copies of all books and records (except credit card info)?
• Copies of documents that prove that $353,500 is needed for the upcoming assessment (including $50,000 for “nuts and bolts”)?
• Genuine and through auditing?
• No special favors and illegal compensation for board members?
• Fair assessments and HOA fees?
• Adherence to all aspects of the controlling documents under which ALL owners purchased their units – The Master Deed and Bylaws?
• Fair treatment for all owner types:  RML owners, non-RML owners and residents?

If these are reflective of your belief system, then I invite you to help us achieve these goals.

The consistent and predictable actions of Joe Thomas and the current Board make it clear that they are opposed to every one of the concepts described in the above bullet points.  As a consequence, we have no choice but to pursue the above goals with legal action.

If you would like to help us achieve these goals, your contribution to our legal fund would help accelerate our success.

With enough in donations, we can hire BOTH an attorney AND a forensic accountant for the whole process through the Court in Sevier County to make absolutely certain we win EVERY point – and never have to fight Employee Joe and the Board on this stuff again.

Even a $100 contribution will help show that you are in favor of an open and FULLY transparent homeowners’ association at Deer Ridge Mountain Resort!

Thanks so much to those of you who have already contributed!  Just click the button below to donate to the cause.

Did you rent your Deer Ridge Mountain Resort unit through Ridge Management Ltd., RML, for all of 2009?

Wonder how your unit’s performance stacked up against the other units for rental?  Well, here’s a chance to find out.

An owner of one of the 2-2 units at Deer Ridge provided me a copy of their year end RML statement.  Here’s what their numbers looked like for 2009 (used here with their permission):

A Quick Analysis

• Owner X had gross rental income on their unit of $14,454 for all of 2009.
• In December, the income was $456 for 6 rental nights according to the above information.  This works out to an average nightly rental rate of $76.
• Since this is a 2-2, let’s assume that the average nightly rental was $105 per night across the whole year.
• This means that for $14,454 of gross income, this unit was rented for about 138 nights out of the 365 nights in a year.
• This means that this unit saw an economic occupancy of only 37.7% – or conversely, a vacancy rate of 62.3% for the year.
• These numbers are consistent with the entire Deer Ridge property as a whole, which has suffered from an average annual economic occupancy of only 39% for the past 8 years under the very questionable leadership of General Manager Joe Thomas.

Is Deer Ridge A Good Investment? / Bad Investment?

• Owner X saw distributions for the whole year of $4,504.  This works out to an average monthly check to them of about $375 per month.
• From this distribution, Owner X had to also pay:  Sevier County taxes, electricity, content and liability insurance, HOA fees and other maintenance from wear and tear and theft.  All of this added up to about an additional carrying cost of about $5,800 for the year.
• This means, that Owner X lost about $1,300 for the year – not counting debt service.  This also does not include the costs for any of the thousands of dollars the board is requiring for the upcoming Asinine Assessment.
• If the monthly mortgage payment was $320 per month, then the total LOSS for the year for Owner X was over $5,000!
• If Owner X keeps their unit for 10 years – and these same trends continue, this means that the aggregate loss for them will exceed $50,000!

Does this make it a good investment – or a bad investment for owning a condo at Deer Ridge?

The answer to that is not quite so black and white – and needs a much more in depth analysis to reach a valid conclusion.

Because so many owners, and prospective buyers, want to know if Deer Ridge is a good or bad investment, my next post will be a comprehensive analysis and downloadable document – so you will finally KNOW the answer!

How Did YOUR Unit Compare to Owner X?

In the meantime, how did your unit stack up to Owner X?  What was your economic occupancy rate with RML?  How much did you REALLY end up making or losing on your investment in Deer Ridge when you count all the costs?

Please comment below – and stay tuned for the next post!

The following email was sent to Luther Parker and the board of Deer Ridge Mountain Resort on January 2, 2010.  It was also sent to GGRC attorney, Chuck Sexton.

Luther,

You and Joe Thomas and the Board are hereby put on notice that any walkway railing “test” is a DIRECT violation of the Article XII of the Master Deed.  Period.

In your letter to all owners you state, “The ownership should be cognizant that the Building and Grounds committee, Board and Management, contractors and maintenance staff would like to do a test run on one walkway. Additionally, if the test run is successful, the Board would like to see this project completed by the April 2010 Owners meeting (if approved).”

Please reread Master Deed, Page 16, Article XII, number 2 to better understand that “There shall be no alterations or additions to the Common Elements or any part(s) thereof except as authorized by the Board of Directors and approved by not less than seventy-five (75%) percent of the total vote of the Co-Owners of the Regime.

Let me step through the complicated logic here for you:  NO means NO.

NO means that you can NOT destroy what we currently have – even to run a test without the 75% approval.  NO means that you cannot do ANY alterations.  Period.

Please have your attorney explain that to you if you need any additional clarity.

If you and Joe Thomas move forward with ANY alterations whatsoever at Deer Ridge without the REQUIRED 75% vote, then all of you, including every member of the “board” will be held personally accountable and financially responsible for this blatant violation of the Master Deed.

With your December 10th letter, you have ADMITTED that Article XII must be followed.

By doing so, you have ADMITTED that you and Joe Thomas and other members of the board, both past and present, have wrongly violated this provision in the past, squandering over $120,000 since I have owned at Deer Ridge.

This admission makes you and the board even more guilty if you move forward with this “test run” since now, with your December 10th letter, you can no longer claim, “Gee, I didn’t know any better…”

Additionally, bear in mind for the upcoming meeting on the Walkways, I will be there with proxies from other owners.

I will want to see detailed spreadsheets, estoppel certificates and other proofs that the Board is ALSO complying with the following ADDITIONAL provisions of the Master Deed, Page 16, Article XII, number 2:  “Where the approval of Co-OWners for alterations or additions to the Common Elements of this Regime is required, “the approval of Institutional Mortgagees whose mortgages encumber Apartments representing not less than ninety (90%) percent of the total unpaid dollar indebtedness as to principal on said Apartments at said time shall also be required.”

This will require you to obtain a complete and comprehensive listing of ALL mortgage holders for all 84 units at Deer Ridge, including any and all second liens, equity loans, etc.  It will require an estoppel certificate from each and every mortgage holder, verifying that they still own the loan, the amount of the unpaid principal balance, and that the person signing any ballot or proxy has the personal delegation of authority of the institution to sign said ballot or proxy.  This step will also require a detailed spreadsheet showing the required arithmetic to demonstrate that the Board has received the REQUIRED 90% of all mortgage holders.

The above is in addition to providing proof of the seventy-five (75%) percent of the total vote of the Co-Owners of the Regime.

NOTE AGAIN – ALL OF THE ABOVE IS ALSO REQUIRED EVEN FOR YOUR PLANNED TEST RUN OF THE WALKWAY RAILINGS!!!

Luther, one of the statements you made at the last board meeting was that I appear to have little trust when it comes to the board.  Well, this is one of many very UNtrustworthy actions you and the board take that makes me, and an increasing number of owners at Deer Ridge Mountain Resort, even less trusting of ANYTHING you and Joe Thomas do behind those closed doors.

Luther, you and Joe Thomas and the rest of the board can no longer get away with your approach of  the past of railroading things through and usurping the power and approval rights of the owners.

It stops now.

Robert

cc:  www.DeerRidgeOwners.com
cc:  Chuck Sexton,  Attorney for Gatlinburg Gold and Racquet Club – cssexton53@aol.com

Voice your opinion below in the Comments section and vote NO on your ballot for this $40,000 waste of OUR money.

Deer Ridge – The Mind Map

A mind map is a diagram used to represent words, ideas, tasks, or other items linked to and arranged around a central key word or idea.  I use these all the time to work with my clients as a way to convey complex planning ideas.

I decided to use one for the current pivotal problems at Deer Ridge to better convey the issues to the attorneys we will be working with on our lawsuit(s) – and even as a way to make things clearer to the FBI once they start to investigate the activities of Joe Thomas and the GGRC HOA Board.

This image version is hard to see – so click on the image to get a much more readable Acrobat version.

Once you see it in Acrobat, use the magnification controls to zoom in – and then use the Hand control to move around the image.  Sorry it is so big – but then again, so are the problems we have at Deer Ridge Mountain Resort.

Please let me know of other issues I should include on Version 2.

PS:  This is also now under Documents You Can Download.

Some Blog Statistics

I started this Deer Ridge Owners Blog about six weeks ago.

During that time, we have had:

• 38 posts with 82 comments, six pages and 20 different categories.  (I am getting a LOT of other, mostly encouraging, email from owners and others who support our cause – but who prefer, currently, to remain anonymous.)
• We have had 1,089 unique visitors, looking at 7,216 page views – that is a huge number of visitors for a small 84 unit condo – and a huge average number of pages viewed per visitor (6.63 pages per visitor) – so the visitors who come, read what has been written.
• 3,031 Internet spider visits – this is a separate count for all the times Google , Yahoo, etc, come visit and re-index the updates here.  As a consequence, we are showing up very high on a lot of Google searches for Deer Ridge, Gatlinburg this or that, including rentals, condos for sale, etc.
• We have had 824 RSS feeds – so a lot of folks want to automatically see every word that shows up on DeerRidgeOwners.com.
• The metrics target for the blog this month, November 2009, is for us to have 1,200 unique visitors just this month – so apparently we are ramping up fast in traffic.
• We apparently have a LOT of local real estate brokers watching – as well as other HOA members – both locally and from all over the country – wanting to see the outcome of our legal actions we are taking against the GGRC and Ridge Management boards – and all of the board members and Joe Thomas individually.
• Apparently, a lot of other web sites and blogs that are focused on bad HOA management and board members are adding links to DeerRidgeOwners.com.  (Note: you are welcome to include links to this blog if you have your own blog or website fighting your own HOA.)
• We have heard that several local real estate brokers in the Gatlinburg area are recommending that their clients NOT buy at Deer Ridge UNTIL these major issues raised on this Deer Ridge Owners Blog are finally resolved.  Several brokers have mentioned that if our lawsuits are successful, that the impact will probably be a HUGE increase in market value for many of the units here.

Here’s a screen grab of the stats:

Legal Update

Quick update…still interviewing attorneys…and biz is booming so been swamped with work that pays the bills…and all this lawsuit stuff is very time consuming…but still a life priority for me to get this suit in place ASAP.  Class action will still be eventual best approach due to nature of all of our claims….but class action seems too complicated for a lot of small law firms…and apparently takes a while to set up….so, will be filing a smaller, individualized suit to start with….on the most basic points.

Right now, I am most interested in getting a quick court ruling on the following basic points to get the Board and Joey under control.  I may even still end up doing these as one or more small claims actions just to get the ball rolling.

Once the precedents are set with rulings on the below points, LOTS of derivative lawsuits can be IMMEDIATELY brought forward…

Minimized Litigation Points To Keep Costs Low And Expedite Ruling – The First Five Points

1. Decision by the Court that Article V of the Master Deed in no way gives the Board and/or the General Manager the right to circumvent or trump the other provisions of the Master Deed and/or Bylaws and does not give the Board and/or the General Manager carte blanche to bypass the vote and opinions of the owners of Deer Ridge Mountain Resort.
2. That the Board must ALWAYS use complete and constant applicability of the Master Deed Percentages to EVERY cost, monthly fee, assessment, etc. for all units at Deer Ridge.
3. Recovery of my personal $10,000 plus overcharge by the Board not following the Master Deed Percentages along with interest at the highest legal rate, at least treble damages, court costs and legal fees plus additional, other full reimbursements and/or damages for all other wrongdoings committed by Joe Thomas and/or the Board.
4. Decision by the Court that the formation and operation of Ridge Management Limited, AKA RML, is not, in any way, a Common Expense, for GGRC as defined by the Master Deed and Bylaws and, as a consequence, any and all costs, fees, charges and assessments related to the formation and operation of RML were wrongly allocated to the past and current owners of units at Deer Ridge.
5. That the Board and Joe Thomas, or his replacement, are required to provide all owners with copies of any and all books and records related in any way to the ownership and operation of GGRC, RML and or the operations of the Common Property.

Other Tack On Points To First Lawsuit Claims Subject To Cost and Time – The Second Five Points

1. That secure, individualized mailboxes be installed for all owners as a Common Expense so that mail tampering can be minimized and have the property meet US postal code requirements for individualized mail delivery for multi-family residential developments.
2. That the Board be required to allow last minute attendance by any and all owners to all meetings related in any way to Deer Ridge Mountain Resort and for time set aside for attendees participation and comments.
3. That the Board be required to digitally audio record all parts of any and all meetings in any way related to GGRC and/or related entities in a legible manner and for those recordings to be made available online to all owners.
4. That the current special assessment for $353,500 be quashed until such time as the true and correct evaluation of the financial status of GGRC is settled and established by this lawsuit.
5. That the Board be required to offer any and all services, use of personnel and maintenance staff, etc. on an equal basis to all owners without discrimination of any kind.

I believe if the first set of lawsuits are strictly limited to these above issues, that it should not be very complicated at all to try this case – just have the judge or jury decide the proper interpretation of the existing documents.

After The First Win…

Once we get a clear ruling on the REAL meanings of our existing documents, then Joey’s and the Board’s house of cards will quickly collapse on everything else.

And, once we all have access to ALL the books and records on OUR property, we can then quickly discover what financial shenanigans have REALLY been going on at Deer Ridge – and what, if any, fraud and criminal misappropriations and / or embezzlement may or may not have been stealing OUR money from the Deer Ridge accounts.

If you would like to help with the legal fees to finally get Joey and the Board under control – and help all owners finally take back control of Deer Ridge, I invite you to click on the DONATE button in the RIGHT column of this blog.

Well, that’s the current game plan….stay tuned.  We live in VERY interesting times.

PS:  On Suing Ourselves

A few owners have voiced some concerns about me suing err ME when I sue GGRC – and where will the money come from if I, and the other 1-1 owners, win?

Well, I have personally been grossly overcharged more than TEN THOUSAND DOLLARS – and I want my money back.  The thing is, virtually EVERY 1-1 owner has been similarly grossly overcharged – and my guess  is that they want THEIR money back, too.  Fair is fair.

For me, the natural place to get this money – and even the money for the rehab of Deer Ridge that REALLY needs to be spent – can all be covered from found money – the money GGRC should receive from the arm’s length sale of RML to another property management company – once GGRC is forced to sell it from the above court actions.  I have experience selling my own, much larger property management company, so I know the right way to do this – and how to maximize the proceeds from a sale of RML – for the benefit of GGRC and all owners.

The other pockets I fully expect to get my money back from are those belonging to the individuals who are our board members and Joe Thomas, General Manager.  If we show in court that they are either fraudulent AND / OR grossly negligent – then they are not protected and can be individually sued – with judgments against them that can be collected on.

So, I don’t see it as suing ourselves at all – but suing those individuals who have tried their best to subvert the governing documents that define the way things SHOULD be done at Deer Ridge Mountain Resort in Gatlinburg, Tennessee.

Want to see what your $22,000 for Holiday Decor bought you for your investment at Deer Ridge Mountain Resort?  The following video was taken ONE WEEK after the decorations were first put up.

Questions I have include:

• Notice that we went from zero to $74,200 for payroll and benefits for GGRC. While they dropped the 2008 $40,00 charge for management and maintenance, we were also blessed with a Manager Fee for $25,000.  This brings the total payroll load for GGRC, not RML, to almost $100,000 ($99,200 for purists) – for a small 84 unit condo!   This was supposedly Joe Thomas and Treasurer Larry Ohm “separating the books between RML and GGRC.”
  • Why does GGRC need a Reservation Office cost?
  • Why does GGRC bear the full cost of Tom, our maintenance supervisor – yet, owners are denied use of Tom’s services because he is spending his time on RML and a LOT of time on the few cabins RML is now managing?  Why isn’t GGRC reimbursed by RML for Tom’s time?
  • The many owners who do not use RML are having to pay for a reservations desk and a maintenance person – even though we get ZERO benefit from their services!
  • This $100,000 shift of costs to the GGRC books are a pitiful attempt for Joe Thomas and the Board to make the books of RML look better – so it does not appear to be the cash drain it is to ALL owners of Deer Ridge!
  • An 84 unit condo association does not need, nor can it afford, a $100,000 payroll load.  If the owners of Deer Ridge were not saddled with all the costs of RML and owners were not REQUIRED to fund Little Joe’s No Tel Motel Mountain Resort, our HOA fees would NOT be used for this level of payroll.
  • If we weren’t squandering this kind of money, we would have to assess all owners a lot less on the current Asinine Assessment.
• Notice that the water bill dropped from $9,660 in 2008 to only $6,200?
  • We all thought that the water bill was fixed from Cobbly Nob?
  • My water bill hasn’t dropped – has yours?
  • I would really like to see the underlying bills on this, wouldn’t you?
  • Oh, that’s right!  Your Board and Employee Joe won’t let any of the owners get copies of these – or any of the other “expenses” of the property.
  • Actually, I would like to get copies of ALL the utility bills to ensure the $25,000 we spend on electric and the $12,000 we spend on gas to heat the pool and spa are genuine and only reflect the common area expenses – and do not include the utilities of certain owners, etc.
• Notice that they are saving us some money between 2008 and 2009 when the cost of Board and Owner meetings dropped from$11,525 to only $6,000!
  • Since Board members are prohibited by the Bylaws from any compensation of any kind, how on Earth are we spending nearly $18,000 between the two years to have Board meetings and an annual owners meeting???
  • If we weren’t squandering this kind of money, we would have to assess all owners a lot less on the current Asinine Assessment.
• Notice also that we spent $12,000 in 2008 and $10,000 in 2009 for “landscaping and holiday decor.”

• • That’s $22,000 spend on some pumpkins, corn stalks and bales of hay???
    Pumpkins, etc. that look horrible just a few days after they are put on display after the bears and other critters start feasting on them.  They look so bad that it is a net negative – not a net positive to tourists – in spite of squandering $22,000 over two years.
  • And that doesn’t count the two to three MAN DAYS of labor it took to do all of this – when Tom wasn’t available to do all the MUCH needed deferred maintenance around the property.
  • Can anyone say Bad Management and Bad Resource Allocation?
  • We already own all of the scarecrows, etc. – so why so much money?
  • Also, bear in mind that the Fall Festival is the only time stuff is supposedly bought during all the holidays.  Christmas is just lights and a tree we already own.  So, where DOES all that money really go?
  • As an owner, I don’t need their attempts at holiday decor AT ALL.  I see it as a total waste of owners’ money.
  • I can, maybe, see why RML for rental purposes MIGHT want a FEW decor items – but $22,000 over two years???
  • Can anybody say slush fund?
  • I would really like to see the underlying bills on this, wouldn’t you?  Oh, that’s right!  Your Board and Employee Joe won’t let any of the owners get copies of these – or any of the other “expenses” of the property.
• So, between GGRC payroll charges, board meetings, holiday decor, you Board and Employee Joe have squandered $180,000 – just over the last two years!!!  I’ve owned here for over four years, so at that same rate, over $360,000 has been wasted – just on this handful of line item expenses.  Hmmm…if that had not been squandered – since it is even more than the current $353,500 Asinine Assessment – we would not all being asked to dig into our pockets for the yet to be justified assessment by Joe and the Board of Directors.

Is this the way you want YOUR money spent at Deer Ridge Mountain Resort?  If not, let Joey and the Board know.

The budget meeting for 2010 will be held on November 13, 2009.  That’s when Joey and the Board will decide for all of us what needs to be spent on these line items and all other line items that WE pay for.

Wouldn’t you like more of a voice?  Start with your comments here – and cut and paste those comments and email them to the Board.

Maybe we can get them to stop squandering OUR money!

Update!  These photos were just taken a few minutes ago on October 12, 2009.  Our $22,000 pumpkins have all but disintegrated in the two weeks they have been up.  See for yourself – and tell me if that kind of expenditure makes sense of YOUR money?

Just did a quickie analysis on the $1,000 across the board assessment done by the Board a few years ago.

As you can see, the Board was either grossly negligent OR fraudulent in charging ALL owners the same amount for that assessment – instead of applying the REQUIRED Master Deed Percentages:

As you can see, I and 29 OTHER owners were charged almost DOUBLE what we should have been charged on this particular assessment – with clear disregard for the provisions of the Bylaws and Master Deed of Deer Ridge Mountain Resort.

36% of ALL Owners Overcharged a total of $14,628 – Just on this one item!

I don’t know about you – but I want my money back TODAY!  Along with interest at the highest legal limit,  at least treble damages, etc.

What else is going on at Deer Ridge that is so WRONG – that Joey and the Board are blocking access to books and records by all the owners?

How much more gross incompetence, gross negligence and / or fraud does the current Board of Directors need to see before firing, with cause, the General Manager of Deer Ridge, Joe Thomas?

PS:  The above “mistake” on the $1,000 per unit assessment from a few years ago is just a “taste test” of a much broader analysis and posting I am working on – if you liked the last major news on my blog, please stay tuned for another major news announcement in the next couple of days of even more, SIGNIFICANT, problems that are also, in my opinion, EITHER fraudulent behavior and / or gross negligence by Joe Thomas and / or the Board of Directors of Deer Ridge.

The following email was sent directly to Joe Thomas and the Board of Directors of Deer Ridge Mountain Resort on September 28, 2009:

Joe,

Fallen Leaves

As an owner at Deer Ridge, please provide me with the following information:

• An email attachment of the Word document that you use for printing current mailing labels for all owners at Deer Ridge Mountain Resort.
• The most currently completed and immediately available financial statements for GGRC and RML showing both current month and year to date information – preferably as Acrobat files although paper printouts will work too.
• With regard to the upcoming assessments to all owners, please provide copies of:
  • All request for quotes that were sent to bidders for all work encompassed by the upcoming assessment.
  • All specific, identified milestones, both major and minor, that delineate the work requirements expected of all contractors.
  • All bids, backgrounder information, brochures, etc. received from all bidders, whether seriously considered by the Board or not.
  • All reference checking that was done for each bidder – and the comments made or offered by the checked references.
  • All timelines for each component of work intended, any and all progress payments tied to milestone completion and expected schedule for each project to be commenced and completed.
  • All Certificates of Worker’s Comp Insurance from each bidder.
  • All other information given to the Board with regard to work required and bids received that relate to any and all work covered by this upcoming assessment.
  • I will be glad to pick up the copies of the above at the front office as soon as they are ready.  Likewise, I am glad to pick up the originals and copy them myself, and return the originals to the office the same day if that helps expedite matters.

In my opinion, Jim Hinchee, Building and Grounds Committee Chairman does a GREAT job in that role.  I completely agree with the statement he made in his recent report to the Board:

“On any major project, a set of written specifications as to exactly what is wanted should be included with the Request For Proposal. Reference to it should be made in any contract. Requirements for the contractor to clean up behind himself should be included and enforced. Acceptance tests or inspections should be performed by a member of staff prior to final payment of invoices or statements.”

My above requests assumes, of course, that the Board followed the logical protocol that Jim so clearly lays out above.

Several owners have the same questions and same needs for these documents as I do – so whatever you can do to expedite making this information available would be appreciated by all.

I do invite you, and the Board and all owners, to view the updated blog for Deer Ridge Owners at www.DeerRidgeOwners.com – and to participate with your own comments and questions that can be shared with all owners of our property.

Thanks,

Robert
A-202

Do you realize that we can probably sell off RML – Ridge Management – for enough money to get ALL of the repairs and improvements done – with ZERO cost, ZERO assessments to any and all owners of Deer Ridge Mountain Resort?

There are other, larger property management companies that could make money with RML due to

Roaring Forks Motor Trail

their economies of scale that Deer Ridge alone will never be able to obtain.  The value of RML’s incremental cash flow to these companies may get us a selling price that:

• Pays for ALL repairs and improvements.
• Gets us out from under the economic albatross of constantly having to feed more money into RML.
• Affiliates ourselves with a larger, more efficient, property management company that could better service those owners who want to rent their units – for a cost equal to or less than they are currently paying RML.
• Could even get us enough EXTRA cash that we have more for reserves – or even make a cash distribution to all owners.

Below are links to a comprehensive analysis of this topic that I done a while back.  The numbers need to be tweaked – but the numbers are still close since RML still manages about 67 units.

Take a look at the analysis – and see if you agree that, given a choice, selling RML is MUCH better than each and everyone of us paying $3,400 to $5,500 for the Asinine Assessment.

This could be a HUGE deal for ALL owners plus those in the rental pool end up with better management AND much less management fees impacting their own net rental income.  Please click each of the following links for the details:

• Pro/Con List for Selling RML
• Valuation Analysis of RML
• Marketing RML
• Backup Data

As will be OVERWHELMINGLY obvious to the most casual observer from ALL of this information, the Deer Ridge HOA should make selling RML its TOP PRIORITY and get this sold YESTERDAY.  Is there really ANYTHING else that should be a higher priority for the Board?