Dallas Developer of Lake Whitney Resort Sued For Allegedly Pocketing Owners' Assn. Fees

Categories: Development

white bluff.jpg
More than 450 current and former property owners at a Lake Whitney residential golf community, including dozens of locals, are suing Dallas-based developer Double Diamond, Inc., claiming they were charged exorbitant fees by a puppet property owners' association that funneled the proceeds directly to the company.

In some cases, the complaint alleges, the fees became so burdensome that some of the plaintiffs were forced to walk away from their property, which they allege was subsequently foreclosed upon by Double Diamond's financing arm.

It all began, according to suits filed in Dallas and Hidalgo county courts, with an invitation to tour the White Bluff Resort -- an offer that included free golf clubs and a stay at the resort's signature inn. What followed, plaintiffs claim, was a high-pressure sales pitch in the "closing room," where salesman were allegedly instructed that a potential buyers has to refuse 10 times before they are allowed to leave. After each pitch, the complaint says, the salesman would leave the room to allow a husband and wife to have a private discussion. But the sales force was allegedly eavesdropping, then adjusting the pitch accordingly.

After signing, it's alleged that residents had to pay a $12,000 fee to join the golf club, which uses a course open to the public. They also had to join the property owners' association, on whose board of directors sat Double Diamond CEO and president R. Michael Ward of Highland Park and a number of other executives. Property owners paid a mandatory $250 "food and beverage" fee that subsidized Double Diamond's hospitality operations, they claim.

The property owner's association was also responsible, according to court filings, for the maintenance of the golf course, even though all of the proceeds went to Double Diamond. Hundreds of thousands in fees were levied by the board for security costs and road maintenance, despite the fact that many of the resort's visitors were public visitors, not private residents, who'd be spending money with Double Diamond. The property owners' association, the lawsuit alleges, was a wholly owned subsidiary whose tax-exempt status Double Diamond used to collect millions, "then [use] that money to subsidize its own for-profit operations."

The company maintained control of the board by rigging elections and changing the bylaws, according to the complaint.

And the property owners paid up under threat of foreclosure. At least they did until they couldn't, at which point the company's mortgage finance arm foreclosed on the property. Contrary to what they'd been told by pitchmen, some of the plaintiffs claim there was no market for their property.

Winstead PC, counsel for Double Diamond, would only say that "their clients believe there is no merit to the allegations and the matter will be vigorously defended."

This isn't the first time the company has been dragged to court. The Kentucky Attorney General sued Double Diamond in June for violating state consumer protection law, among other things.


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14 comments
pet56
pet56

at the cliffs resort our condo has burned they say the insurance money belongs to the council and they can do what they want with it . we pay the insurance not them wish anyone that ownes in the birkdale condo at the cliffs would contact me so we can do a class action . contact me at pettych@verizon.net .

Birkdale owner
Birkdale owner

I own a Birkdale condo also. Anything new happening here??

Americano
Americano

My free clubs were worth it.  I just said no until I got my clubs and left.  If they eavesdropped on me, all they heard was me saying, "I'm only here for the clubs".

DuckDuckGoose
DuckDuckGoose

I've had a dozen calls from them over the years.

Free clubs = a good thing.

Driving from east BFE to west BFE to get the sales pitch and clubs = not good.

GAA
GAA

HOAs have too much power.  They need to keep the books open.

DuckDuckGoose
DuckDuckGoose

HOAs legally formed have board of director meetings that are open to the public, along with required publication of all financial records.

If an HOA is not complying, contact the City and County authorities (City Hall, not the Police) and be sure to contact the Texas Secretary of State.

The HOA will either comply or have their charter yanked.

Diane
Diane

Believe me, with Mike Ward, the "Nepolean" for Double Diamond, it doesn't matter who is at the meetings or who votes.  He makes the rules and he pockets the money.  He's a real piece of work with top brass in his back pocket to protect his "crooked" dealings. Remember the old "Dallas" series with JR Eweing, well meet Mike "JR Eweing" Ward.

RTGolden
RTGolden

Anyone who can afford to pay a $12,000 fee to join a golf or country club should have better financial sense than to be roped into one of these affairs.  They got what they deserved.

Fletch
Fletch

It's incredible how many people go along with someone "not allowing them to leave."  It's just a mind game.  It's not a prison.  It's the same junk car dealerships pull every day.  They can't legally detain someone like that and it'd be great if people just got up and walked away.  If that doesn't work, call the police.  Instead, all these people showed up for their free swag and got badgered into signing up for something they didn't bargain for.  Besides, they should've known that was coming.  Those people aren't in the business of giving stuff away for giggles.  But if these folks had managed to keep their wits about them, they might've gotten away from this situation relatively unscathed.  So what if you don't end up with your golf clubs?  Do like most people do and buy them.  Paying all those costs that they got roped into isn't worth any set of clubs.

Guest
Guest

The car dealers, at least, will frequently steal your keys (if you're trading in) to keep you from leaving.

RTGolden
RTGolden

Why would you give your keys to the dealer before you're actually ready to trade.

Uncle_Scrappy
Uncle_Scrappy

I know I have called 911 before when a Dealership tried to do this. Kinda interesting when the Police show up & a scene is created in their showroom floor. As I told one manager when this happened. "Wonder how many sales you lost because of this"

Bottom Line, dont let them bully you. Their is law about UNLAWFUL DETENTION. Be assertive & if not allowed to leave either by force or other, call 911.

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