SOA/SGCC Settlement Documents

Subsequent to our previous Post “BOD Meeting – Rockery Wall Legal Update”, SU has obtained copies of the legal documents pertaining the Somersett Owners Association’s negotiated settlement of their lawsuit against the Somersett Golf and Country Club (SGCC). These documents are presented here as follows:

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

This nine page document consists of two parts; 1) the RECITALS, which provides the history behind the lawsuit, and 2) the AGREEMENT, which documents what was agreed to between the parties along with all the terms and conditions related thereto. For the interested, following is a link to the complete document (minus the signature pages):

SOA-SGCC Settlement Agreement

Note that the Agreement contains a clause that provides for some payback to the SGCC in the event the SOA wins its lawsuit against Somersett Development Company et al. What is not clear is how this will be accomplished. That is, by reduction of the annual rent payment, requiring another amendment to the Lease Agreement, or via cash, or perhaps the SOA could pay it to them over a 44 year period.

FIRST AMENDMENT TO COMMERCIAL LEASE

Again two parts: 1) the RECITALS and 2) the AMENDMENT, a copy of which is available via the following link:

SOA-SGCC Lease Agreement Amendment

Note that the Amendment not only amends Section 1.1 of the Lease Agreement, wherein the Base Rent is increased by $5,979 annually for 44 years beginning in 2021, but it also amends Section 8.1 “General Tenant Obligations”.  Not sure what the overall purpose here is but it appears to accomplish two objectives; 1) to eliminate Warranty provisions that no longer apply due to the passage of time, and 2) to cut the SGCC some slack in allowing them to replace components with those of equivalent usefulness and functionality rather than equal value. Which circumvents the SOA’s premise that the Failed Well 5 228HP water pump had to be replaced with like kind and not with a 60HP pump as the SGCC had done.

Bottom line here is that the Hole 5 Hillside repair cost issue is now thankfully behind us and, per our Board President, relationships with the SGCC are good with no issues on the horizon. Let’s hope it stays that way!

BOD Meeting – Rockery Wall Legal Update

The January 13th Somersett Owners Association (SOA) Board of Directors (BOD) Meeting, under Unfinished Business, includes a “Legal Updates – Rockery Wall Update” Agenda Item.  One would assume that this pertains to the SOA’s Rockery Wall failure lawsuit against Somersett Development Company et al.  However, at the time of this Post there have been no new docket entries in the Appellate Court.  The last one being on December 14, when the SOA filed its reply brief to the defendants brief of why the District Court decision should be upheld  (For details, see SU Post of December 16th, entitled “Somersett Development Co. Rockery Wall Lawsuit Update”).  Perhaps the SOA legal team has some knowledge as to an upcoming Appellate Court ruling or when the ruling will be made, as we are all waiting with “bated breath”.

Then again, there was also the Rockery Wall repair lawsuit against the Somersett Golf and Country Club (SGCC), for which a negotiated settlement was reached (For details, see SU Post of December 10th, entitled “SOA/SGCC Lawsuit Settlement”). The Court action dismissing the lawsuit may be viewed via the following link:  201218 Order to Dismiss

Per the reported settlement, the SGCC is to pay $263,097 to the SOA through an increase of $5,980 in their annual property lease payment over the remaining 44 years of the Lease Agreement. Currently there are two “rent” elements that make up the SGCC’s required annual payments, one at $1000/year subject to escalation, and one at $1200/year with no escalation. Given that the $5,980 increase was not subject to escalation, it is fair to assume that the SGCC’s annual payments will now be $1000 escalated and $7,180 non-escalated.

Which raises the following question. Is not a written amendment to the Lease Agreement required? SU suspects so in order for it to be legally binding.  If such an amendment has been generated, when will it be published for the benefit of owners? Perhaps the Board can answer this question at the January 13th Board Meeting.