Item #2 in the Transition Committee’s recommendations (SOA Transition Recommendations) to the new Somersett Owners Association (SOA) Board of Directors (BOD) stated:
“It is requested that the board review with legal counsel the subsidy agreement (Attachment A) and tolling agreements to assure they meet all NRS requirements and the SOA’s fiscal interest”.
SU welcomes this recommendation as it has long been our opinion that these Agreements were never in the best financial interests of the SOA, but rather benefited the Somersett Development Company (SDC). It should be noted that they were entered into between the SDC and the SOA Board of Directors (BOD), which was then controlled by the SDC.
The Subsidy Agreement called for the SOA to reimburse the SDC $396K for maintenance, replacement and repair work to the SOA Common Area. Most of which is associated with construction defects on the part of the SDC’s subcontractors.
The Tolling Agreements obligated the SOA to incur legal costs associated with litigation of claims against the SDC’s subcontractors for these defects (i.e., Parkway Entry Rock Wall and Mainline Irrigation System). To date the SOA has spent approximately $100K in legal fees with more to come.
SU believes it unconscionable that the then SOA BOD entered into these Agreements, which will end up costing Somersett owners over $500K. All such costs should have been borne by the SDC alone. Much has been said on this subject in past Blog articles and comments to no avail. Hopefully the new BOD will seriously consider action against the SDC to recover these costs.