Residents near Converse outraged by developers' move to form HOA

Key Largo homeowners call letter about overdue fees deceptive, a scare tactic

BEXAR COUNTY, Texas – Homeowners in the Key Largo subdivision near Converse have expressed outrage in recent weeks after many of them received a letter informing them that some properties have accrued upwards of $5,000 in past due homeowners' association fees.

The letter, delivered in mid-May, indicates that developers of the subdivision are willing to waive the reimbursement fees as long as residents approve several property improvement projects.

The fact that the neighborhood even has a homeowners' association comes as a surprise to many residents, who provided the KSAT 12 Defenders title paperwork showing that their homes were not subject to membership in a homeowners' association when they purchased their properties.

"I'm not against it, but I'm against how this is set up. This is robbery," said one woman who bought a home in 2016 but did not receive the letter.

A prearranged interview with KSAT 12 last week with residents both for and against the HOA erupted into shouting matches and Bexar County Sheriff's Office deputies were eventually called to the neighborhood.

Many residents who spoke with the Defenders are in favor of forming an HOA, but want more control of it.

Other residents said they bought homes in Key Largo in large part because realtors told them it was not part of an HOA.

A small group of residents is in favor of allowing the development group to bring the HOA out of dormancy with each of the three developers: Robert Ripley, Berry Burkhart and Donald Peterson, having a seat on its board, then allowing a property management group to run its day-to-day operations, as the letter suggests.

The property management group would take 10 percent of the HOA fees in exchange for operating it, an attorney for the developers confirmed last week.

"Nobody in here was going to do it. We've all tried to come together, to have things cleaned up, and that didn't happen," said Jasmine Walkes, who provided title paperwork indicating her home was bound by membership in an HOA when she purchased it in 2014.

"I can guarantee you a lot of people here at this meeting did not read the back of the letter thoroughly."

Fellow residents chided Walkes for the comment.

"I am, I guess, offended with the fact that she says we were not doing our research," said resident Jill Rath, who held up piles of paperwork she brought to the interview.

Other residents said the developers sent the wrong message by only leaving one open spot on the proposed board for a write-in candidate.

Key Largo Subdivision HOA Letter to Residents

Representatives for Helvetia Asset Recovery, which owns close to three dozen unfinished lots and has plans to develop 19 of them, said they are legally allowed to recoup fees even though the HOA has been dormant for more than a decade.

An attorney representing the development group said that is not its intention, and even if it was, it could only recoup fees starting when a property owner first purchased his or her home.

Ripley, who reviewed the letter after it was drafted by an attorney, his fellow developers and an HOA management company, said that the letter was meant simply as a suggestion that residents should meet and bring the HOA out of dormancy.

Residents have criticized the timing of the letter, which indicates that the first installment of HOA dues, $200, would be due a day after the meeting was scheduled to take place.

Ripley pushed back on assertions from residents that the letter was deceptive or a scare tactic.

"That was certainly not our intention nor do I believe it's in the actual plain English wording of what was said there," said Ripley.

"Maybe we mishandled this thing. We're doing a lot of things for the first time. Maybe we goofed."

The proposed June 14 meeting about the future of the HOA was canceled two days after the Defenders interviewed Ripley.

An attorney representing the subdivision's developers released the following statement:

After being made aware of the polarizing effect of the letter reviving the Key Largo HOA, the developer is withdrawing the letter sent May 15, 2018. A new letter addressing the inclusiveness and benefits of the HOA will be sent in the near future. In the meantime, homeowners may email with their thoughts. Please include your contact information and your home address in any email.

The completion of the neighborhood, located near Interstate 10 and FM 1516 in far east Bexar County, has been stunted by problems ranging from the national housing bubble burst to legal issues involving one of the project's original engineers.

Ripley said original design work on the subdivision began in the early 2000s and that its plat was approved a few years later.

He said the project's original developer, Casa Linda, later went bankrupt.

Ripley said he joined the project in 2007 by forming Helvetia Asset Recovery after the property was placed into liquidation by a bank.

He said issues surfaced in 2013 with engineer Burton Kahn, who also managed the property.

"He was all of a sudden saying that he owned the subdivision," said Ripley.

A protracted legal battle ensued.

Bexar County court records indicate that Kahn had filed warranty deeds on properties within the subdivision, including ones already purchased by homeowners.

Ripley said a judge stepped in and reversed the deeds, only to have Kahn ask another judge to intervene.

Helvetia was awarded around $1.7 million in damages in June 2014, according to a final judgment signed by Judge Michael Mery.

Kahn was indicted on three counts of tampering with a government record in December 2015, according to court records.

The case against Kahn was dismissed in February 2017 pending further investigation, according to court records.

Ripley said his group has only been able to recoup a small percentage of what Kahn owes it, in part because Kahn filed for bankruptcy.

Kahn did not respond to a written request for comment for this story.

Ripley also said he has paid at least $3,000 to $4,000 a year to maintain the common areas of the subdivision.

He said bringing the HOA out of dormancy will help give residents a louder voice to be heard by Bexar County officials.

"Right now they don't have a voice," said Ripley.

About the Author:

Emmy-award winning reporter Dillon Collier joined the KSAT 12 Defenders in 2016. Dillon's investigative stories air weeknights on the Nightbeat. He provides restaurant health reports for KSAT's "Behind the Kitchen Door." Dillon is a two-time Houston Press Club Journalist of the Year and a Texas Associated Press Broadcasters Reporter of the Year.