SOA Attorney Litigation Letter

In a recent comment Deb Orick commented on the SOA Attorney letter (dated March 18, 2018) posted on the Association website (i.e., under the SOA/Committees and Meetings/Legal Disclosures links), and questioned if most homeowners were aware of it, specifically with regard to the “Northgate” owners litigation.

March 16, 2918 Attorney Letter

With regard to the Attorney letter, per its preamble: “This is a letter which is not subject to the attorney client privilege and which may be disseminated to members of the Association regarding certain maters in which we are presently representing the Association. The purpose of this letter is to apprise the members of such matters an/or for them to utilize such letter in complying with NRS 116-4109 if they are selling their houses”.

This type of “litigation update” letter is not new, and has been routinely provided to the SOA Board for some time now. However, not previously made available to Association members in an obvious manner.

“Northgate” Owners Litigation and Sierra Vista Park

This issue has roots going back to 2012, and has been very costly to the SOA in legal expenses. For the current case docket (CV16-00220) identified in the March 18, 2018 Attorney letter, the SOA has expended approximately $135K in legal expenses with more to come. What is this litigation all about? Perhaps a little history is in order.

In 1985, RJB Development Company deeded property to Washoe County to develop the Northgate Golf Course, which was operated by the Reno-Sparks Convention and Visitors Authority. RSCVA operated the course until 2009. When RSCVA closed the golf course, a property deed restriction required that the land revert back to RJB. For the next three years, the Reno City Council and a group of surrounding residential property owners (including Whisper Rock residents subject to the on-going litigation) worked to persuade RJB Development to allow time to raise the funds to purchase the property for use as a park and open space (i.e., as opposed to sale for residential or commercial development). After months of negotiations, the City reached a deal to purchase the property for approximately $2.5 million. The City formed a Special Assessment District after successful petition by more than two-thirds of the adjacent property owners which generated $1.2 million of the funds. To further off-set the City costs for park use purchase, several Whisper Rock owners entered into an agreement to expand their existing lot size by purchasing some of the Northgate property adjacent to their existing Somersett lots. Hence the source of future conflict with the SOA.

The Somersett Developer under Blake Smith, was of the opinion that the acquired Northgate property should be incorporated within the Somersett boundary jurisdiction and subject to the Somersett CC&R’s. Ostensibly to protect Somersett home values due to potential improper use of the land. After initial conservations with Mr. Smith in this regard went nowhere, the Northgate property owners adopted their own set of CC&R’s to prevent abusive use of the property. Apparently this was not good enough for Mr. Smith, and subsequent Somersett BOD’s, who retaliated by notifying owners that they were in violation of the Somersett CC&R’s by accessing their newly acquired property from their Somersett property (i.e., their backyards). This rather than granting a variance, which they had the authority to do. Hence the necessary hiring of attorneys by both sides to resolve the issue, representing a waste of both SOA and homeowner funds.

What nonsense, it was this same homeowner group that championed the cause and provided funding for the defunct Northgate golf course property being purchased by the City for a public park. Bottom line, the SOA BOD should be grateful to the “Northgate” homeowners who spent time and money to convert this land to a park rather than harassing them about violating the Somersett CC&R’s and therefore, subject to fines. This illustrates a lack of common sense by the previous and current BOD’s. What started out as a “power play” by Mr. Smith was unfortunately carried on by subsequent BOD’s.

Per the March 18th Attorney letter, settlements have subsequently been reached with 12 of the 14 owners involved with this litigation. Although settlement details were not identified in the Attorney letter, apparently it included issuance of settlement checks by the SOA, acceptance of SOA CC&R’s by the Homeowners and concessions on AGC guidelines by the SOA.

For those who may be interested, information on the Sierra Vista Park is available via the following link:

http://www.reno.gov/home/showdocument?id=48811

NOTE: If there are any inaccuracies in the above summary, by those in the know, please submit your correction.

 

Sierra Canyon CC&R’s on Developer Disputes

The following Article from the Sierra Canyon CC&R’s posted by Joe Bower, Sierra Canyon Homeowner

Section 13.04(a) of Article XIII of the Sierra Canyon CC&R’s states as follows below. Please note that in the CC&R’s this whole Section appears in capital letters in order emphasize its importance. For ease of reading not all capitals were used here. The Declarant is PN II, Inc., a Nevada Corporation, aka Pulte.

Section 13.04. Disputes Involving Declarant

(a) AGREEMENT TO ARBITRATE.

IT IS AGREED that ANY DISPUTES BETWEEN the ASSOCIATION or any Owners, AND THE DECLARANT, any director, officer, partner, employee, contractor (as defined in NRS 40.615), subcontractor, design professional or agent of the Declarant (collectively “Declarant Parties”) arising under the Governing Documents or RELATING TO THE DEVELOPMENT, including without limitation, claims for breach of contract, express or implied, breach of warranty, strict liability, negligence, nuisance, statutory violation, misrepresentation, fraud, (INCLUDING CLAIMS in any manner RELATING TO OR ARISING OUT OF A CONSTRUCTION DEFECT as defined in NRS 40.615 which have not been resolved as provided in NRS 40.680(2) (Mediation)), SHALL BE RESOLVED BY BINDING ARBITRATION pursuant to NRS Chapter 38. Owner and ASSOCIATION HEREBY WAIVE ANY RIGHT Owner or ASSOCIATION MAY HAVE TO BRING AN ACTION IN COURT, including, but not limited to, any such right of owner or ASSOCIATION under NRS 40.680, AND ANY RIGHT owner or ASSOCIATION MAY HAVE TO BECOME A PARTY TO A CLASS ACTION CLAIM.

Editorial Note:  The complete Sierra Canyon CC&R Document may be viewed or downloaded by clicking on the following link (also available under the References Section of this website):

Sierra Canyon Notice of Annexation & CC&R’s