Freeman Communities files counterclaims against class

Company, homeowners fight over control of community board
May 3, 2021

Freeman Communities, developers of Bayside in Selbyville, are seeking a dismissal, damages and breach of contract charges against the primary plaintiff in a class-action lawsuit against Freeman.

A hearing is scheduled to be held in Delaware Court of Chancery in Georgetown, Tuesday, May 4.

Mark Dunkle, attorney for Freeman Communities, filed counterclaims against Nancy Green, a Bayside resident and the lead plaintiff in the class-action suit filed in Delaware Chancery Court. Dunkle claims Green did not follow Bayside’s charter in filing the suit and did not make a reasonable effort to resolve her conflict with the developer prior to filing a legal action. 

The Green case is one of two lawsuits filed by Bayside homeowners against Freeman Companies. The gist of both suits is that the homeowners believe they should have the controlling interest on the board of directors of the Bayside Community Association and that Delaware’s Uniform Common Interest Ownership Act allows them to do so once 75 percent of the lots in Bayside have been sold. 

Freeman Communities, the property management arm of Freeman Companies, has said the homeowners are misinterpreting the state’s common-interest law, and there is an intention to transition the association to the homeowners by 2024. The homeowners believe that isn’t soon enough, and Freeman Communities is obligated by law to make the transition now. 

Freeman claims that it is a master planned community, defined in Delaware law as a development with 400 acres and at least 400 units.

Bayside is run by a community charter, which establishes the Bayside Community Association to serve as the development’s homeowners association and make day-to-day decisions regarding the maintenance, upkeep and repairs of common elements in the community. Part of the association’s structure involves committees established by the board to handle individual aspects of community maintenance.

The homeowners in the suit argue that the board is exclusively made up of people appointed by the developer, meaning for them that the developer controls all aspects of the community despite funding for the needs and activities of Bayside coming from the homeowners. 

Homeowners Greg Merrill and Don Picard said in light of the lawsuits, Freeman Communities has floated a plan to add 300 new units within the development as condominium-style units. While Picard said he can’t say for sure whether this is an effort to get around state common ownership law, he was perplexed because Bayside stopped selling condominiums years ago. Merrill and Picard said they would wait until a ruling comes down after the May 4 hearing before homeowners will know what the next step is.

Freeman Communities argues that the homeowners control all the committees, meaning much of the day-to-day operation of Bayside is already being dictated by the homeowners.

The two sides have engaged in some discussions regarding transitioning majority control of the board to the homeowners, although Picard said Freeman has not made any overtures to settle the lawsuits. What they disagree on is the timeline, and Freeman Communities argues in legal filings that a small group of homeowners has long been planning to file litigation to challenge the validity of Freeman’s timetable for turning over control of the board. 

In response to Freeman Communities’ assertion that it is a master planned community, homeowners represented by attorney Robert Valihura filed a second class-action lawsuit alleging Freeman Communities withheld documents disclosing that fact. Responses to this suit have not been filed.



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