Botched Lawsuit #2: Sky Ranch HOA v. Lennar

Alleging construction defects, on November 20, 2017, the Sky Ranch HOA sued the developer, Lennar, for damages in excess of $100,000. The allegations included defective drainage, landscaping and irrigation systems.

Sky Ranch v. Lennar. Construction Defect

The HOA did not have the authority for the lawsuit because they failed to get approval from the members. The HOA should have had a vote of the members, which is required per the CC&Rs. There was no vote of the membership at a meeting, nor via ballot. We were denied our vote in the matter.

There is an entire section (19.3) of the CC&Rs dedicated to Construction Defect Disputes. There is even a subsection (19.3.3) called “Association’s Construction Defect Claims.” That paragraph provides the mandate for the vote.

There are a number of reasons that homeowners might have wanted the opportunity to vote against the lawsuit. The same section of the CC&Rs, 19.3.1.1, requires the HOA to follow maintenance recommendations and schedules. Failure to do so “may reduce or preclude Owner's and the Association's right to recover damages relating to such Lot or Association Property.” The lack of maintenance is obviously apparent, thereby lessening the value of such a suit.

Prior to filing a civil action regarding the property, the HOA is required to have a meeting. The HOA must provide written notice to each Member. The notice must specify “(a) that a meeting of Members will be held to discuss problems that may lead to the filing of a civil action, (b) the options, including civil actions, that are available to address the problems, and (c) the time and place of the meeting.” There was no public discussion that included the members. There was no notice to discuss the problems and options, as required.

Twenty-eight days after filing the lawsuit, the HOA posted a cryptic agenda for a meeting to be held at the home of the HOA President. If this was their purported announcement, it lacks the specific details required (see above). The meeting was not open to the membership, so a vote of the membership was not possible. Incidentally, it lists three items called “Personnel Matters,” though the HOA has no personnel.

A Memorandum of Settlement Agreement between the HOA and Lennar was signed by the HOA president on June 25, 2020.  The HOA assumption of maintenance for Lot L was the focus of the memorandum.

Frustratingly, the HOA had managed to snatch defeat from the limited victory that had been won previously.  Because Lot L is near our home we were involved with negotiations involving us, Lennar, the HOA, and the City.  The HOA was represented in the meeting by Dave Quinsey and HOA attorney Bill Bud.  In an effort to end the issue, Lennar agreed to install irrigation and plants.  The HOA rejected the offer.  Now, following the settlement, the HOA will have to clean up the excessive native vegetation and install new plants to comply with the fire regulations. 

Despite promises to the contrary, the HOA remains silent about the details of the settlement.