More than 40 Tennessee tiny home owners seek $5m in HOA lawsuit
Over 40 homeowners in Tennessee are suing developer Claude 'Chip' Hayes III for $5 million, alleging he mismanaged HOA funds and retained control of their communities beyond the agreed-upon timeframe. Residents describe the situation as a 'zombie HOA' where the developer continues to exert power over amenities and finances.
Why it matters
The lawsuit highlights common legal and financial disputes that can arise between property developers and homeowners in managed communities.
More than 40 homeowners in three tiny-home communities in Tennessee are taking legal action against developer Claude 'Chip' Hayes III, accusing him of retaining control of their homeowners associations (HOAs) and mismanaging association funds. They are seeking $5 million in damages, along with control over HOA funds and records.The dispute centres on three developments including the Retreat at Deer Lick Falls, the Retreat at Sunset Bluff and Water’s Edge, Realtor.com reported. Residents there say Hayes continued to control their HOAs beyond the period allowed under the communities’ governing documents. They called it a 'zombie HOA', where a developer remains in control after residents are expected to take over.Hayes’ business model involved selling land to residents, developing roads and offering community amenities. Buyers could choose from several tiny-home models and either live in their homes or rent them as holiday properties through a property management service run by the developer.
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