Greater than 40 owners in three tiny-home communities in Tennessee are taking authorized motion in opposition to developer Claude ‘Chip’ Hayes III, accusing him of retaining management of their owners associations (HOAs) and mismanaging affiliation funds. They’re looking for $5 million in damages, together with management over HOA funds and information.The dispute centres on three developments together with the Retreat at Deer Lick Falls, the Retreat at Sundown Bluff and Water’s Edge, Realtor.com reported. Residents there say Hayes continued to regulate their HOAs past the interval allowed below the communities’ governing paperwork. They known as it a ‘zombie HOA’, the place a developer stays in management after residents are anticipated to take over.Hayes’ enterprise mannequin concerned promoting land to residents, growing roads and providing neighborhood facilities. Consumers may select from a number of tiny-home fashions and both reside of their houses or lease them as vacation properties by way of a property administration service run by the developer. Residents additionally paid charges to an HOA that Hayes managed.Householders say issues emerged over the way in which the communities have been managed. They’ve raised considerations about HOA funds, promised facilities, constructing work and restrictions on the contractors they might use.The authorized struggle started greater than two years in the past when residents of the Retreat at Deer Lick Falls sued Hayes, claiming he had failed at hand over management of the HOA and had mismanaged its funds. The dispute later expanded to incorporate owners at Water’s Edge and Sundown Bluff.
Developer saved management
The governing paperwork for the developments gave Hayes management of the HOAs for a particular interval whereas the communities have been being constructed. This included management over builders, widespread areas, facilities and different affiliation issues.In response to the communities’ covenants, situations and restrictions, Hayes was supposed to surrender management both 5 years after the primary lot was offered to a non-developer or as soon as 75% of the tons had been offered to non-developers, whichever got here first.Residents at Deer Lick Falls argue that this meant Hayes ought to have given up management in 2021. They allege he prolonged his management by including extra property to the Deer Lick neighborhood and arguing that the enlargement justified protecting management of the HOA.Residents sued him in 2024 looking for management of the HOA. Householders at Water’s Edge later joined the authorized dispute, alleging that property taxes on widespread areas went unpaid for greater than two years and that the properties have been vulnerable to a tax sale.In addition they accused the developer-controlled HOA of failing to supply correct monetary information and getting into transactions that benefited the developer at owners’ expense.The dispute escalated once more in 2026 at Sundown Bluff. Hayes sought a short lived restraining order after studying that residents deliberate to carry a gathering to vote on taking management of the HOA.Residents nonetheless voted overwhelmingly to take away Hayes from management and elected their very own board of administrators. The brand new board then modified a number of insurance policies, together with permitting owners to decide on their very own property managers moderately than being required to make use of the developer’s rental administration firm.
HOA cash misused
The Sundown Bluff residents then filed a counterclaim in opposition to Hayes and his firms. In July, 40 residents signed on to a lawsuit accusing Hayes of self-dealing, breaching his fiduciary duties, overcharging for providers and illegally retaining management of the neighborhood’s funds. Householders are looking for $5 million in damages.A significant a part of their grievance considerations HOA spending. The lawsuit alleges that almost 80% of all the HOA finances at Sundown Bluff was spent on garden care providers. Residents additionally declare these contracts have been awarded to a different firm owned by Hayes.The lawsuit additionally alleges that HOA cash from Sundown Bluff was used to pay for the event of a separate challenge, the Retreat at Deer Lick Falls Section Two.
Allegedly, practically 80% of all the HOA finances at Sundown Bluff was spent on garden care providers.
Householders additional declare that they needed to pay for the removing of dozens of useless bushes broken throughout building, regardless of already paying HOA dues. The grievance additionally alleges that Hayes tried to cost residents additional for utilizing a neighborhood constructing that had been constructed utilizing HOA funds.Hayes has largely remained silent in regards to the lawsuits. Earlier this month, nonetheless, he instructed the Moore County Observer that former enterprise companions and owners combating for management had made it troublesome to function the retreats. He additionally blamed authorized bills for his incapability to finish a number of the facilities that had been promised to residents.“I ought to have folded up and walked away a very long time in the past. Anyone else would have. However I don’t wish to go away the purchasers broken on this. That is one thing that I like and imagine in,” he stated, as quoted by Realtor.com.
Facilities not delivered
Gregg Boling, who purchased rather a lot at Water’s Edge in 2021, stated he had deliberate to construct a vacation dwelling for himself and his household. He stated he selected the property as a result of Hayes had instructed him there wouldn’t be one other property throughout from it and that an adjoining lot would grow to be a neighborhood clubhouse with a saltwater pool. “The pool was at all times part of the promoting course of for us,” Boling stated.The pool was by no means accomplished, in response to him. A lawsuit filed by the pool’s authentic installer alleged that Hayes didn’t correctly grade the location, inflicting water runoff issues and structural injury.Water’s Edge residents have additionally alleged that different marketed facilities, together with mountain climbing trails, kayak entry, swimming pools, a pool home and a cabana, weren’t accomplished. The saltwater pool stays listed on the neighborhood’s web site as “coming quickly”.Boling additionally questioned the standard of building and the contractors residents have been anticipated to make use of. After a contract dispute with builder Michael Weidenhamer, whom Hayes fired in 2022, Hayes circulated an inventory of contractors who have been banned from working for residents.Boling stated he later found that his water foremost had been put in nearly 30 inches beneath the floor. Throughout a very chilly winter, he stated he needed to dig 44 inches all the way down to find it and used a metallic detector borrowed from a pal.
Residents describe extra issues with their properties
Linda Ranz, who owns properties in each Water’s Edge and Sundown Bluff, stated she purchased two Water’s Edge tons intending to construct houses for herself and her daughter. Ranz stated the land didn’t initially have waterfront entry, however Hayes instructed her he would dredge a part of Huge Fiery Gizzard Creek to supply it. That by no means occurred.“For 2 years, I used to be instructed, ‘Yeah, there’s going to be water. He will dredge that.’” Ranz stated she ultimately requested when the dredging would occur and was instructed, “oh, by no means.”Ranz has raised different considerations about roads, septic programs and drainage. She stated Hayes constructed a big drainage ditch by way of the center of her property with out her permission, forcing her to spend one other $2,500 on a survey so she may create a driveway to a second home.At Sundown Bluff, she stated she is paying $120 a month in HOA charges for every of her 4 tons, regardless of having no dwelling or garden on them. She stated she doesn’t know the place the cash goes.Regardless of the lawsuits, Hayes continues to pursue new improvement initiatives. Earlier this month, he appeared earlier than the Metro Board of Zoning Appeals looking for permission to construct a 17-acre RV park and campground on the Retreat at Whiskey Creek.
