GENEVA – A dispute over who controls the homeowners association of a Geneva subdivision has landed in court.
Old Second National Bank came to own three partially completed homes and 52 vacant lots in the Prairie Ridge Townhomes Development in Geneva when it foreclosed on developer John Henry Homes Inc. in February. According to court documents, the bank had the right to designate a board of directors to manage the homeowners association, which includes collecting fees to maintain homes.
The bank designated Arris Management out of Bolingbrook as the party that collected and managed association fees.
But homeowners in the subdivision were unhappy with the way the association had been managed, so they elected a board to handle the fees and a bank account. The plaintiffs in the case said that board did not form legally and had no right to control any association funds.
The two parties made their first court appearance Thursday at the Kane County Courthouse in Geneva. The parties are scheduled to appear in court again Wednesday.
John Cebryzinski, who managed association fees, failed to provide minutes of any board of directors or association financial statements, according to a counterclaim filed by the defendants in the case.
The counterclaim also states that the not-for-profit status of the association was involuntarily dissolved when Cebryzinski failed to submit an annual report.
In 2011, homeowners in the subdivision at Peck and Bricher roads contacted attorneys for the bank requesting that control of the association be turned over to the homeowners. When homeowners found out that a landscaping contract had been canceled and the association had no snow-removal contract, they circulated a petition to other homeowners in the subdivision seeking to elect a new board of directors.
Julie Simpson, one of five defendants named in the case and president of the newly elected board, said the dispute comes down to deciding which party is in charge of controlling the homeowners association.
“We assert we are, and they assert they are,” she said.
Simpson said through a series of correspondences, the parties had worked out an agreement to allow the homeowners to run the association.
“Old Second [National] Bank knew we were doing this, and for 12 months we have operated the association,” she said.
Simpson said the newly formed association had established a reserve fund that collected about $25,000 for home repairs and maintenance.
The plaintiff claims the newly formed association has no right to control funds, and court documents state that the new homeowners association “illegally withdrew the funds from the Prairie Ridge Association account” maintained by Arris Management.
“The allegations in their complaint are unfounded and lack a factual basis,” Simpson said. “The unit-owner board has acted above board and has been transparent to all unit owners.”
She said the court case could have been avoided if the bank had just asked to see bank account statements.
But the plaintiff said the homeowners forming their own association was not in accordance with the association’s declarations.
“We’ve taken a lot of time to work this out and it’s unfortunate that it’s come to this position,” said Mike McCaskey, who represents Old Second National Bank with attorney Christopher Sheean.
Tony Simpson, who lives in the subdivision, said homeowners plan to picket in front of the bank if the matter is not resolved.