The number 1 objective of the Lawsuit is to permit the Homestead parcel owners to organize a legitimate HOA in accordance with Section 4 of the CC&R and the Uniform Washington Common Interest Ownership Act. 18 Paradise refuses to allow the parcel owners to organize a legitimate HOA. Read latest formal complaint >>>
No. There was no response from 18 Paradise. On July 6, 2022, long after the period to respond to our bona fide offer to settle lapsed, attorneys for 18 Paradise and Mr. Scholten sent to us a fee proposal framework that he would implement, if we drop the Lawsuit. It appears that the other website is calling this a “response” to our May 18, 2022 offer to settle. It is not. Please go to the news section of our website to see our response to their July 6, 2022 proposal. You will also find a memorandum with a point-by-point response to Mr. Scholtens proposal [click here].
No. A Homestead Owners Association (HOA) was incorporated* at the onset of the dispute, in hopes 18 Paradise would allow the organization of a real homeowners association. The Homestead Owners Association remains a dormant shell waiting for the organization by the Homestead Parcel Owners of a legitimate Board of Directors in accordance with section 4 of the CC&Rs.
18 Paradise continues to block the organization of a legitimate HOA so that it can continue its unaccountable collection and expenditure of our maintenance fees.
(*In accordance with the WA UNIFORM COMMON INTEREST OWNERSHIP ACT)
The court order was signed by Judge Freeman on September 15, 2021 and affects maintenance fees from that date. So maintenance fees will revert back to $36/month for the October 2021 payment.
Q. I paid the full $93 per month for each of the 21 months since January 2020, for a total of $1953. If I had paid $36 per month I would have paid $756 for that 21 month period. Does this mean that I have a credit of $1197?
A. No. Nothing in the Court Order requires the Declarant to give you a credit for your overpayment. The Declarant is however prohibited from taking adverse action against you for not paying the $57 increase. In other words, if you decide not to pay any fees for the next 33 months ($33 x $36 = $1188), the Declarant would have no legal basis to collect any more than the $36 monthly payment.
Q. What happens if in the above scenario I sell my property in three years or 36 months from entry of the Court Order, assuming no resolution of the Court case?
A. If after not having paid anything for 36 months you sell your property, the closing mechanism will require you to pay the amount claimed by the Declarant to be owing. To the date of the Court Order you paid 21 months x $93 to the Declarant or $1953. The Declarant may decide to claim 33 months owing at $93 months or $3069. On closing your sale $1188 or $36 x 33 would be disbursed to the Declarant by the escrow agent. The remaining $1881 or $57 x 33 would be placed into the Court registry and repaid to you when the 7th Amendment is found invalid, or to the Declarant if the 7th Amendment is validated.
As The Court Order permits the Declarant to use any legal means to collect the $36 fee. Those include the three possible means set out above, and also application of the 12% interest. Note: 12% interest on $36 would add an additional 36 cents to the monthly fee.
Yes, class members are given the right to opt out. A form to opt out has been mailed to all class members. If you opt out, you will not get the benefit of the lawsuit. You don’t have to make that decision until March 31, 2021, so it may be wise to wait and see what happens.
Regular updates are published here: https://homestead-hoa.org/news/
The Homestead golf course is owned by a wealthy foreign businessman (18 Paradise, LLP/Morris Chen) who does not need homeowner maintenance fees to keep the golf course open. If the Homestead golf course were to shut down, the owner would lose his $2.5 million investment in it.
Related, he also owns Sea Links golf course in Blaine which is managed by MJ Management. Between 2019-2020, when MJ Management imposed Amendments 6 and 7 on Homestead parcel owners due to insufficient funds, they spent over $200,000 at Sea Links. These expenses were disclosed during the Discovery process. (See Legal Update Dec 13, 2020)
Since homeowner dues are only for the maintenance of ‘Common Open Space’, an absence of those fees should not impact the running of Homestead golf course. However, if it turns out that the golf course is being illegally subsidized by homeowner dues and in the absence of that revenue subsequently fails, it is unlikely it would go to waste. Since the golf course property cannot be developed, and can only be used as a golf course, if 18 Paradise stopped maintaining it then it would violate the City of Lynden codes and agreements and would likely sell it. The legal counsel has seen estimates that Homestead Farms Golf Course is worth $600,000 USD.
The attorneys have agreed to charge low rates and rely on contributions to a trust fund that has been set up to support this lawsuit. The trust fund is independently managed by an outside attorney, and a committee of plaintiffs reviews every payment. Success will depend on enough Homestead owners deciding to contribute. It we prevail and are awarded fees, all contributions will be refunded pro rata.
Make checks payable to Boundary Bay Law In Trust (Homestead Class Action Ref. #535292897 in Notes).
**MAILING ADDRESS UPDATE**
Mail Payments To:
Boundary Bay Law, PC, 1050 Larrabee Ave, Suite 104, Box 336, Bellingham, WA 98225.
No, we don’t think so. During the first H.O.A.G. meeting held January 21, 2020 between advisory group advocates and Josh Williams of MJ Management, it was noted Josh made the following statement: “For me to go to a private equity to buy [the golf course], I have to list, as the city and bank suggested to, $93 homeowners dues as Revenue.” See H.O.A.G. Update 5
The cost of doing nothing explains the benefit. For maintaining common open space, signs, mailboxes and street lights per Amendment 7, the Declarant’s exorbitant current $93/month per property amount will increase at minimum by 5% every year. So in 20 years, monthly payments are $235/month per property or $1.7 million per year.
Recent 2020 bids from local contractors estimate lights and landscaping maintenance would cost under $100,000/year. Meaning our homeowner dues should only be approximately $20/month per property. In addition, Amendment 6 allows the Declarant to “impose and collect fees for ANY special assessment.” With homeowners having no vehicle to object the Declarant (18 Paradise/MJ) are free to impose these fees at will.
If nothing changes, then your maintenance fee will be permanent and continue to get bigger. According to 18 Paradise and MJ Management, the maintenance fee would still be charged in 50 years, but by then it would be over $1,000 per month. That is on top of any special assessments they decide to charge.
The court’s injunction provides a mechanism in the case of sale of a property. If the parcel owner paid none of the $93 fee, then on sale the escrow agent would take in the unpaid fees and pay $57 into court and the remainder to 18 Paradise. If the parcel owner paid $36 in fees, then the escrow agent would take unpaid $57 portion and pay it into court. At the conclusion of the Lawsuit the disputed $57 will be paid to the prevailing party.
Please review the Fourth Amended Complaint filed with the court July 26, 2022.
Our claim is for damages consisting of the amount of money 18 Paradise deceptively took from Homestead Parcel Owners, which may be trebled pursuant to statute. We also ask for a Declaratory Judgement from the court stating that the private ownership by 18 Paradise of the Common Open Space is illegal. Last but not least, we claim the legal fees expended to bring the Lawsuit.
No the golf course are not “wetlands” as that term is used by the county. In order to get initial approval for the Homestead Planned Residential Development, the declarant promised the City of Lynden that the water hazards would form part of the City’s stormwater system. The golf course promised to maintain their water hazards.
Our motion for injunctive relief was successful. The motion was supported by a dozen affidavits from Homestead community members who had been threatened and otherwise abused by 18 Paradise and their agents. After a sympathetic hearing before Judge Olson, the defendants stipulated to the injunctions prohibiting 18 Paradise from engaging in collection of the maintenance fees authorized by the 7th Amendment. 18 Paradise is permitted to collect the $36 until the matter is resolved by the court.
The Lawsuit is not over. The injunction simple rolls back the status quo to December 2019.
There are several additional FAQ’s addressing this topic.
Not sure. It would be best to contact MJ Management to make sure they make the change.
NOTE: The provision at 4b of the Order “However, nothing in this order shall prohibit the Declarant from collecting the additional $57 than any Homeowners elect to voluntarily pay.” This means if you do not wish to voluntarily pay the disputed $57 and you have set up an automatic payment through a credit card, you MUST contact the Declarant’s agent, MJ Management, LLC to let them know your preference. If you don’t contact the Declarant’s agent, they may reasonably assume that your continued payment of the $93/month is “voluntary.”
If the Court decides that homeowners owe back fees, they may be liable for interest on them. The interest rate would be 12% per year.
The Court Order permits the Declarant to collect $36 from the date of filed Order. However, in the event a Homeowner sells their property the Declarant can assert its claim on closing that $93 per month is owed from January 2020. If it does so claim, the Escrow Agent is instructed in the Order to remit $36 per month for every delinquent payment to the Declarant. The Order then instructs the Escrow Agent to remit the disputed $57 portion of the maintenance fee to the Court to be paid out to the Homeowner when the 7th Amendment is found invalid, or to the Declarant if the 7th Amendment is validated.
NEW LEGAL UPDATE: Court rules COS does not include areas within the golf course.
According to county records, the common open space totals 8.77 acres. Homestead Park (6.35 acres) adjacent to Fishtrap Creek makes up the majority of the COS. The City maintains the public trail that runs through it. The park at the intersection of Depot Road and Sunrise Drive is 0.33 acres, and the drainage basin on Sunrise is 1.0 acre. The rest of the common open space is made up of small, landscaped areas.
“H.O.A.G.” is an acronym for Homestead Owners Advisory Group (not to be confused with the Homestead Advisory Board). These concerned owner volunteers came together in January of 2020 to advocate on behalf of their neighborhoods against the unfair practices of 18 Paradise and their agent MJ Management, in hiking fees by 158% without any accounting. Negotiation Timeline >>>
The only way to have representation and accountability is through an HOA where the HOA is not-for-profit and is governed by an elected board of homeowners. Homestead has an HOA but it’s being governed by the Declarant 18 Paradise for profit.
The Homestead PRD is not like other golf course communities that typically subsidize the golf course and receive benefits for said subsidies. Homestead homeowner dues are expressly for maintenance of common open spaces.
It’s hard to know definitively one way or the other. In situations where homeowners do subsidize a golf course, they typically get something in return. For example, free golf, use of the facilities, profit share. At Homestead, homeowners don’t get any of that. The fee is intended only to maintain common open spaces (COS) as outlined in the in the CC&Rs.
A pro rata distribution of surplus means that people are paid in proportion to their contribution or interest within the whole trust fund. Example: If the total fund is $100 and a contributor has put in a total of $10, then a pro rata distribution means 10% of the surplus. Learn more
This is a group of homeowners chosen by MJ Management who support their position. They were not elected and they answer to Mick and Josh. No meaningful (HOA) board exists and none will until homeowners have and control their own HOA. Read CC&Rs
Washington passed a statute on homeowners associations in 2018, but most of it does not apply to existing developments. The Consumer Protection Act is a broad statute that provides relief from “unfair and deceptive” acts and practices. It also provides for limited trebling of damages and an award of attorney fees.