After both 18 Paradise and MJ Management refused to negotiate an equitable solution, Plaintiffs representing Homestead property owners commenced litigation, for the following reasons:
1. Taxation Without Representation. – Homestead property owners have no say in matters concerning the Declaration of CC&Rs in their own community. Moreover, the Declarant can add or revise covenants at his sole discretion without approval from property owners, including raising maintenance fees, as was done in December of 2019. Homestead property owners have no recourse, being that the Declarant does not allow them to establish or have a representative homeowners association.
2. No Accountability. – The Declarant has refused to give Homestead property owners an accounting of where their maintenance fees are being spent, despite raising maintenance fees to cover the costs to maintain approximately 8 acres of common areas, to over $700,000/year.
Opposition to the Litigation
Despite the requirement in the Lynden Municipal Code, Homestead is the only Planned Residential Development in Lynden (out of 8) that does not have a representative Homeowners Association. The following is a listing of the groups that are opposed to allowing Homestead residents to form an HOA and have a say in our own development; and want to end the litigation with the status quo in place.
1. 18 Paradise
18 Paradise, the Declarant, is the primary defendant in the case. The reason that they so fiercely oppose the lawsuit is that they want to keep collecting the maintenance fees that serve as a $700K+ annual revenue stream that may be worth more than the golf course.
2. MJ Management
MJ Management managed the golf course and the common areas as agent for 18 Paradise. MJ recorded the 6th and 7th amendments to the Declaration which allowed for a special assessment and raised maintenance fees over 150%. Plaintiffs offered to dismiss MJ from the lawsuit, but their attorney instead filed a counterclaim stating that they are due unpaid maintenance fees, so they remain as defendants. MJ Management no longer manages the golf course/common areas for 18 Paradise.
3. Interveners
The Interveners are a few Homestead homeowners that entered the lawsuit with the goal of ending the lawsuit so that the golf course could be sold to Duane Scholten. They are opposed to forming an HOA and are content with the current relationship with the Declarant, including paying maintenance fees with no accountability. They filed a motion to have the class action decertified which was denied by the court. As a result, the majority of Interveners (9 of 14) voluntarily dismissed themselves from the case.
4. Duane Scholten
Duane Scholten is a local businessman that has put in an offer to buy the golf course. He has stated that he will only buy the golf course if there is no litigation, that he continues to receive maintenance fees from property owners, and that the Declaration be amended to allow maintenance fees to be used for subsidizing the golf course. Mr. Scholten has also stated that he will not provide accountability of where maintenance fees are spent, nor will he allow a homeowner’s association to be formed.
5. The City of Lynden
The City of Lynden was an original defendant to the lawsuit, primarily because the city failed to enforce its own ordinance that required a homeowner’s association to be formed. The City also failed to enforce other ordinance requirements to define common areas, approve and record a Final PRD agreement, and review and approve amendments to the CC&Rs, among others. The court dismissed the City of Lynden from the lawsuit in 2022.
The City of Lynden is in favor of having Homestead property owners subsidize the golf course so that the rest of the City can benefit.