On April 9, 2024, Hot Springs Village Property Owners Jeffery Atkins and Dennis Simpson filed a class action* Complaint against the Hot Springs Village Property Owners Association. Simpson said, “As you might imagine, we have thought LONG and hard about this…”

Simpson continued, “On the advice of our legal counsel, they suggest no interviews. But Jeff and I have put together just a statement we would share. It is our opinion that the POA Board and Management has lost its way, and we intend to fix it. We’ve taken this action to protect the interest of all property owners and ask the Courts to preserve the integrity of the governing documents.” 

The Saline County Complaint alleges that the Plaintiffs were/are adversely affected by the actions and omissions of the Hot Springs Village Property Owners Association, the world’s largest gated community. The Complaint states that the HSVPOA Board of Directors, through the association and general management, is responsible for protecting the organization’s assets, members, and members’ investments, creating a fiduciary responsibility.

The suit says that the HSVPOA has an obligation to follow their own guidelines and procedures established in the Declaration and Covenants and Restrictions, but “there have been numerous instances of the HSVPOA creating a special assessment without a proper vote,” which violates the Declaration.

The complaint alleges that although the POA has previously lost court cases, it continues to operate in “a pattern of intentional misconduct.”

  • The POA has shown extreme disregard for the Plaintiffs’ wishes and has invited litigation by recently stating during a rental registration fee discussion, “If you don’t like, hire a lawyer and litigate.”
  • Despite having a fiduciary duty, the POA has facilitated and implemented improper financial transactions that adversely affect the Plaintiffs’ interests.
  • The POA has a duty and obligation to pay costs for extending utilities (sewers and water) and providing roads to lots not having such. The POA recently implemented a policy to “avoid their obligation by imposing a system whereby property owners would now have to directly pay for utilities and roads…”
  • The complaint states that the POA’s failure to pay for the installation of roads, sewer, and water utilities diminishes the value of underserved* lots.

The Complaint alleges implementation of special assessments without a Members’ vote

The Complaint also alleges the POA has implemented special assessments without a vote of Members. Examples of this include

  • “Buy-in” fee for $250 for purchasers of unimproved lots and $1,500 for improved lots
  • “Public Works” fee of $1,560 for roads to be built for each home
  • “Deed Transfer” fee
  • “Membership Assignment” fee
  • “Tree Cutting Permit” fee” enforcing different rules for lot owners and homeowners
  • Charging new buyers with assessments before receipt of deeds and also making them responsible for the entire year of assessments at once
  • A” “Rental Registration” Fee of $50 is charged to file and register a rental and to provide the owner’s contact information for HSVPOA personnel or police. The suit alleges this fee is to “help the POA increase income and potentially provide bonuses to management.

Competing with Members in Breach of Fiduciary Duty

The Complaint states that HSVPOA has implemented a system of using assessment dollars to compete for lot sales by offering a 50% commission to realtors on POA-owned unimproved lots, which undercuts other lot owners and breaches fiduciary duty and potentially antitrust laws.

Protective Covenants

The Complaint says that traditionally, the HSVPOA operated under a “complaint” basis for protective covenant infractions but failed to enforce these rules on a regular basis. Additionally, the complaint alleges that enforcement is arbitrary and unfair and can depend on who makes the complaint. Specifically, the Board fined the Plaintiff for cutting a tree without a permit, but his neighbor did the same without recourse.

Breach of Privacy

The lawsuit states the HSVPOA has implemented a new software system allowing Property Owners Association account balances to be visible to Assigned Members, family members of Assigned Members, or Dependents of Assigned Members which is a breach of privacy.

“The Defendant HSVPOA made disclosures to the public or to persons about Plaintiffs financials not previously known to the public, and Plantiffs had a reasonable expectation that such facts would remain private.”

Conclusion

The suit alleges:

  • Breach of fiduciary duty
  • Breach of contract and covenant of good faith and fair dealing
  • Constructive fraud
  • Breach of contract
  • Invasion of privacy

Requested compensation:

The Plaintiffs request compensation for damages and reasonable expenses and costs.


Atkins and Simpson v HSVPOA Complaint

*To my knowledge, this has not yet been certified as a class action. “To certify a class, a court generally needs to find that the proposed class is 1) numerous; 2) presents common questions; 3) that the class representative’s claims are typical of the class’ claims; and 4) that the class representative is an adequate representative.”

*Underserved lots are those without utilities and/or roads.

Note: I am not a legal expert. This is the Plaintiff’s side of the case. I have attempted to present this Complaint to the best of my ability without bias or favoritism. When it is filed, I will post the Answer to the Complaint (the Defendant’s side of the case). Atkins, Simpson v HSVPOA can be accessed here.

Click here to read the HSVPOA Board’s initial response to the Complaint.

By Cheryl Dowden


Click here to contact the HSV Gazette.


Click here to join our private Hot Springs Village Property Owners Facebook group. Be sure to answer the entry questions.


Click here to visit the POA website – Explore the Village.


Breaking - Atkins, Simpson File Suit Against HSVPOA 1