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Riverchase (4)-CS 950406Richard D. Linger 822 Mallard Drive Coppell, Texas 75049 April 6, 1995 Messrs. Tom Morton and Jim Witt, __ Mayor and City Manager, the City of Coppell 255 Parkway Blvd. Coppell, Texas 75019 Re: Riverchase Homeowners Association, Inc. Gentlemen: Attached for your information and review is a copy of the latest correspondence between the Riverchase Homeowners Association, Inc. (the "Association") and myself. Since the Association operates within the city limits of Coppell, I believe that it is important that you be aware of this on-going dispute. This current correspondence has its roots in my past dealings with the Association. During 1993 and 1994, the only correspondence which I received from this organization until October was a series of assessment notices. There were no notices of annual meetings, no notices of regularly scheduled Board meetings, no newsletters, no communication whatsoever. In October, 1994 they advised me that they would be turning over collection of my assessment to an attorney. I immediately advised them that this was unnecessary if they would provide me with information about the Association, its Bylaws and CCRs, and its most recent audited financial statements. They proceeded to engage an attorney, and failed to produce any of the information which I requested. Subsequently, after being hounded by an attorney hired by the Association, I remitted the 1994 Assessment under protest. At that point, I advised the Association that I view this as an effort to extort money from me, since the Association had failed to validate its claim to me, and they refused to account to me as to the use of these funds. Since that time, I have received no communications from this Association except for 1995 Assessment notices. I have ignored their previous notices, expecting to receive notice of the Annual Meeting of the Association and a copy of the audited financial statements for last year. April 6, 1995 The Association is now advising me that they intend to employ an attorney in order to collect the 1995 Assessment as well as the disputed amounts they claim related to the 1994 Assessment. The attached letter clearly documents my position in this regard. By this time, I am sure that you are wondering why I am pursuing this matter. After all, the amounts involved are rather small (the 1995 Assessment is $72.00 for the full year). Well, there are a multitude of reasons why this matter is important: 1. I understand that I am a member of this Association as a result of my decision to purchase a new home in Coppell which is located in Northlake Woodlands East. Quite frankly, this surprises me, since there is no direct linkage between Northlake Woodlands East and Riverchase. In fact, these two sub-divisions are separated by a very formidable barrier, MacArthur Boulevard. Having obtained a copy of the CCRs for this area from a source other than the Association, however, I have learned that the original developer of Northlake Woodlands, Mr. Steve Parsons, approved the inclusion of this property into the Riverchase Homeowners Association in 1985. This action in and of itself perplexes me, since there was already a Northlake Woodlands Homeowners Association in place covering the property directly west of Mockingbird Drive. Was there a financial motive to the Developer at that time? And if so, is this motive contrary to the interests of the new homeowners in Northlake Woodlands East? 2. Quite frankly, having never been in personal contact with anyone from the Association, I am very reluctant to pay anyone unless they can validate their claim. To date, no one has produced any evidence to indicate that the SBB Management Company validly represents the Riverchase Homeowners Association, and that the Association is in fact a valid organization. The fact that the people who are attempting to collect money from me are unwilling to authenticate their claim by providing appropriate documentation leads me to a conclusion that they do not in fact want their identity to be known. This sounds suspicious to me. How about you? Perhaps most disturbing of all in this respect is the unwillingness of the to Association abide by the requirements of its Bylaws and the CCRs. To date, they have failed to produce any copies of audited financial statements for my review, despite the fact that this is mandated in the CCRs. They have also failed to provide notice of an Annual Meeting of the Members (Shareholders) for the past three years. 2 April 6, 1995 I immediately become suspicious of any organization which is unwilling to share its financial information with its Owners/Members. This generally leads me to believe that either the information does not exist, or that it contains data which the Board does not wish to be known. This could indicate that there have been instances of waste, mismanagement, and/or other improprieties. Makes you kind of wonder, doesn't it? 3. To date, my experience indicates that the Association is collecting funds from homeowners in Northlake Woodlands, but it fails to fulfill its obligations under the CCRs. In addition to the Association's failure to provide notices of meetings and financial information, it also does not appear to be enforcing the CCR's governing Use of Property and Estates. A vacant lot behind my house has been used as a dumping ground for a variety of building materials, and the weeds have grown to be three or four feet high. The Association has taken no action in this regard. Only the concerted efforts of my neighbors on Blue Jay have gotten the builder to recently bulldoze the site. However, two large mounds of weeds and debris remain. To the West of me on Mallard Drive, a recently completed house which remains unsold sits without landscaping. This is in direct violation of the CCRs, which require landscaping within 180 days of the structure being 95% complete. Separately, I am also aware of an on-going problem with the erosion of mud and debris into the street, alleyway and homeowner's driveways from the undeveloped land behind and along the lower end of Mallard Drive. This problem has been in existence for well over year, and the homeowners in this area have yet to achieve a satisfactory solution to this problem. I could continue, but hopefully you have gotten the point. Where are the benefits which the Members are to receive from these payments? 4. It is my understanding that the Riverchase Homeowners Association is responsible for the maintenance of the right of ways and medians along MacArthur Drive. This strikes me as very strange, given that MacArthur Drive is a major thoroughfare through Coppell. Do other homeowner associations maintain the rights of way along Denton Tap Road or Sandy Lake Road? It is my understanding that they do not. It therefore strikes me as incredulous that the Riverchase Association would be responsible for maintenance along MacArthur Road. If maintenance along MacArthur Road has not been assumed to the City of Coppell, then the Association has failed to represent the best interests of its members. I am especially interested in your comments on this subject. 3 April 6, 199,5 5. Finally, I find it amazing that, given the amount of new home construction which has occurred in both the Northlake Woodlands area and the Riverchase Area that the annual assessment for the Association has not been reduced substantially. Obviously, given the secrecy with which this Board operates, I cannot comment on the reasons for this oversight. But doesn't it seem strange to you? Gentlemen, it appears highly likely to me that the Riverchase Homeowners does not want to answer my questions because they do not want to be held accountable for the use of the money which they extract from the Members. If they will not answer to me, however, I am hoping that they will answer to you. I hereby request that the City undertake a review and/or audit of the operations of the Riverchase Homeowners Association, Inc. in order to address the concerns of my neighbors and myself who reside in Northlake Woodlands East. I am asking you to do this because this Association operates within the boundaries of the city of Coppell, and it is my understanding that the City has the obligation to investigate unlawful and potentially unlawful behavior within its limits. I believe that it is time that the suspicious behavior of this organization be scrutinized to ensure that several hundred homeowners within the city are not being victimized. Since the Association will not communicate with me, perhaps they will respond to you. I look forward to hearing from you soon as to your intentions in this regard. If the City of Coppell does not intend to take action in this respect, and the Association fails to respond to my requests, then it is my intention to bring this matter to the attention of the Attorney General of the great state of Texas. All corporations ultimately are accountable to their Shareholders. In the case of the Association, this is the Members. As word of my encounters with the Association spreads to my neighbors, I am receiving lots of encouragement to proceed. Apparently, I am not the only one dissatisfied with this situation. Perhaps, I am only the most active one. Gentlemen, I believe we are at the beginning of a great revolt by the homeowners located in the Northlake Woodlands East area. We are the victims of a developers decision, made long before we became homeowners. Our long term interests are not consistent with those of the original developer, who ultimately will be long gone while we still live in this area. We see no mutual benefit to participating in the Riverchase Homeowners Association. The Common Areas which represent most of the on-going benefits to be enjoyed in Riverchase will never be directly accessible to the Northlake Woodlands homeowners. We also see no reason why we should be assessed monies to pay for maintenance along MacArthur Boulevard. All citizens of Coppell and the neighboring cities enjoy the use of MacArthur, why should only a limited few be required to maintain it? 4 April 6, 1995 The ultimate resolution to this problem is withdrawal of the Northlake Woodlands East homeowners from the Riverchase Homeowners Association, and severance of the Riverchase Association's CCR's from the titles to our properties. I have documentation from the Closing on my residence that indicates that a new homeowners association already exists, but has not yet been formed for the Northlake Woodlands homeowners. If organization of a new association is the fastest, most expedient resolution to this issue, then I believe that it should be pursued as quickly as possible. Another alternative may be to extend participation of the existing Northlake Woodlands Homeowners Association to the lots which are East of Mockingbird Drive and West of MacArthur Boulevard. I have several neighbors who are prepared to work towards successful resolution of this matter. We look forward to participating with you and others who can bring this matter to a final resolution which is satisfactory to all parties. By the way, I am sure you are wondering who I am. I am a Certified Public Accountant working as the Assistant Controller for an international contract drilling Company. The various homes which I have owned in Texas and California have been subject to CCRs administered by Homeowner Associations since 1978. I have five years of past service on Boards of Homeowner Associations in the Kingwood subdivision on the Northeast side of Houston, where I served as Treasurer and Vice- President. I am also a Cub Scout Cubmaster in Coppell. My experience in other Homeowner's Associations has showed me the difference between "Good" ones and and the "Others". Presently, I believe that I am involved with one of the "Others". It is my goal to rectify this problem through the help and assistance of my neighbors and the City of Coppell. Sincerely, Richard D. Singer Attachment cc: Mr. Ken Hill, Esq. Mr. Rick Roberson Mr. Wayne Barnett 5 April 6, 1995 Riverchase Owners Association, Inc. c/o SBB Management Company 4801 Spring Valley # 115-B Dallas, Texas 75244 Re: Annual Dues Dear Board of Directors: This letter acknowledges receipt of previous correspondence from SBB Management Company dated March 28, 1995 with respect to the Riverchase Owners Association. In this respect, I am formally notifying the Association that I am contesting the 1995 assessment. This association continues to operate without regard to its responsibilities under the Bylaws of the Corooration and the Declarations of Covenants. Conditions and Restrictions for Riverchase. As a result, I recognize no obligation to reimburse this organization for any amounts which they claim to be due and payable until such time as they bring themselves into compliance. Once said compliance has been achieved, I will remit the 1995 Assessment due, and no other amounts representing purported interest, penalties, and legal fees. Any amounts other than the 1995 Assessment claimed to be due are the direct result of the Association's failure to act within the legal docments governing its operation. At a minimum, I will not consider the 1995 Assessment valid until the Association satisfies Article V. Section 5.01 (n) of the Declarations of Covenants. Conditions. and Restrictions for Riverchase. This specifically requires the Board to make available an audited financial statement of the Association within a reasonable time after the end of each fiscal year. I have previously asked for this document for the year ended December 31, 1993, and the Board has failed to comply. They have subsequently failed to make this same information available for 1994. Also, I have previously asked this Association to provide me with a copy of the Articles of Incorporation Bylaws of the Corporation, and they have refused. As a result, it is impossible for me to specifically refer to areas of noncompliance in this respect. Riverchase Homeowners Page 2 April 6, 1995 Association, Inc. However, given that the Association purports that it is validly organized as a non-profit Corporation in Texas, then I would expect that the Articles and the By-Laws of the Corporation require an annual meeting of the Shareholders (Members). I have not yet received notice of such meetings for 1993, 1994, or 1995, and therefore have been denied the opportunity to participate in such meetings. The remedy for this breach is unclear at this time. However, as a minimum, I request that copies of the minutes of any such meetings be forwarded to me for my review as a prerequisite to further resolution of this matter. As a Shareholder (Member) who is legitimately contesting his assessment, I assert that this Board has a minimum obligation to notify me of such meetings, and to make the results of the meeting known to me as well as all other members of the Association. The continued refusal of this Board to share the financial results of the Association with its Members reinforces my continued concerns that these funds are poorly managed, are being used for purposes other than those governed by the Bylaws and CCRs, or both. You have aroused my suspicions, and those of many of my neighbors, who already believe that we are bei.ng defrauded since we receive no benefit for the amounts which you ask us to pay. I suggest that a full and open accounting to me and all the Members of the Association is the only way to resolve these doubts. I consider the continued threats by this board to pursue legal action against me and my domicile as harassment. Having succumbed to your extortion last year, I refuse to be threatened any longer. I strongly suggest that this Board reconsider its plans for legal action regarding collection of any amounts from me or other Members, and instead take the high ground by forcing itself to act within the rules governing the Association. Further legal action on your part will be met with a strong legal defense. Given the small amount of money involved here, we are engaged on this matter because it has become a point of principal, of right and wrong. Before we debate this issue through the legal system, I strongly suggest that the Board review its position in this regard. I am already resolute in my convictions on this matter. I look forward to your written response to resolve this matter. Sincerely, Richard D. Singer cc: The Honorable Tom Morton, Mayor - the City of Coppell Mr. Jim Witt, City Manager - the City of Coppell Mr. Ken Hill, Esq.- Quilling, Selander, Cummiskey, Clutts & Lounds, P.C.