Judge rules in favor of developer in Bayside suit

May 28, 2021

A Delaware Court of Chancery judge has ruled in favor of Freeman Communities, developer of Bayside in Selbyville, in a class-action lawsuit filed by residents over control of the development’s homeowners board.

Vice Chancellor Sam Glasscock agreed with Freeman Communities that Bayside represented a master-planned community and did not have to legally turn over majority control of the Bayside Community Association to residents until either 90 percent of the total units in Bayside’s master plan have been sold or Dec. 31, 2024 arrives. 

A group of homeowners filed suit, with Bayside resident Nancy Green serving as lead plaintiff, arguing that Bayside was a common interest community, and under the Delaware Uniform Common Interest Ownership Act, was obligated to turn over majority control of the community association to the residents when 75 percent of the units called for in Bayside were built.

Josh Mastrangelo, senior vice president of Carl M. Freeman Companies, said in a statement, “We believe this ruling by the Court of Chancery protects the interests of all homeowners in Bayside. The Carl M. Freeman Companies conceived and created Bayside and has acted as a responsible steward of the community. This is borne out by the consistently rising property values in Bayside and the extremely low rate of turnover. We are pleased the judge saw the merits of our arguments that we are well within our rights to maintain control of the HOA board until either the end of 2024 or we reach a threshold at which 90 percent of our planned units have been sold.”

Bayside homeowner Greg Merrill said, “The many Bayside homeowners supporting this effort are of course disappointed in the vice chancellor’s opinion.” He said those involved in the suit are weighing their options as far as appeals are concerned.

In his ruling, Glasscock said Bayside declared itself a master-planned community in its charter, with development that was expected to extend over many years. He said the charter also spells out that majority control of the association would be held by the developer either until 90 percent of the units were sold or until the end of December 2024. 

With the ruling in the Green suit having gone against him, plaintiff’s attorney Robert Valihura agreed to dismiss a second suit, filed by Bayside resident David Williams, that served as a sort of rebuttal to Freeman Communities’ claims that it was a master-planned community. However, with Glasscock having found that Bayside was a master-planned community, the second suit was dismissed without prejudice, meaning it could, in theory, be brought back before the court.

Subscribe to the Daily Newsletter