WILMINGTON — The developer that owns and maintains much of the public-private Jervay Communities housing development is addressing the issue of the neighborhood’s homeowners association, and the fees it has charged for over a decade, answering questions in an attempt to clarify the situation.
Last month, Port City Daily reported that numerous homeowners had been paying homeowners fees to Telesis, the developer, for as long as a decade, but had never seen an HOA materialize — this despite Jervay’s founding documents, which call for an elected board and elections including all homeowners.
Public records and interviews with the Wilmington Housing Authority (WHA), showed this has been an issue dating back to the community’s founding; WHA CEO Katrina Redmon also confirmed that Telesis maintained an escrow account with HOA fees in it.
Many questions remained about what had happened to the HOA fees and what the status of the HOA was – and what it was legally required to be.
This week, Telesis Founder and President Marilyn Melkonian answered some of those questions.
Who belongs to the Jervay Communities HOA?
The founding documents – known as covenants – of Jervay specify that the HOA is comprised of homeowners, but that term can be somewhat confusing.
Melkonian explained that there are essentially three ownership groups, Telesis, WHA, and individual homeowners. Each housing unit at Jervay gets a “vote” and the majority of those votes belong to Telesis, which owns 66 units, and WHA, which owns 23.
The Telesis and WHA units are rented, and those renters don’t a vote; they aren’t members of the HOA. However, they also don’t have to pay HOA fees — the fees for those units are paid by Telesis and WHA.
There are also individual homeowners, who have a deed to a property in the Jervay area (neither Melkonian or WHA had exact numbers on how many, exactly, there currently are). These homeowners are charged HOA fees – apparently $25 per bedroom, per month. Each homeowner theoretically gets a vote in the HOA.
Except, so far, they haven’t.
So, where is the Jervay HOA?
Melkonian was emphatic that the Jervay HOA does exist.
“It exists, which is a good thing … it’s our goal to have it be more activated. Because it isn’t as activated as anticipated or envisioned, by either [state] statute and the articles of incorporation,” Melkonian said, adding that Telesis was still consulting its legal staff on the exact status of, and requirements for, the HOA.
Asked if the HOA has regular meetings, keeps minutes, or has a physical location where it meets, Melkonian said that, since the majority of the HOA votes belong to New Dawson Limited Partnership (Telesis’ North Carolina business name) and WHA, and those two entities are in frequent contact, this constitutes “meetings” of the HOA.
Still, for over a decade those conversations haven’t included homeowners. Melkonian said she hopes to change that soon.
“The membership of the HOA is mostly New Dawson Limited Partnership [a.k.a.Telesis] — which WHA is a member of — that talks all the time. That represents the actual vast majority of the votes in the HOA. What has been lacking, and this is something I want to change, is to draw into the process, and to have a meeting, I want to have it this Spring, is to draw in the homeowners who are active homeowners and want to participate in the active governance of their community,” Melkonian said.
“[The HOA] never taken that next step, but we intend to take that next step,” she added.
Why has it taken so long?
Jervay residents have described taking their issues to three different WHA leaders — Benjamin Quattlebaum, Michael Krause, and most recently Katrina Redmon – from 2007 into the present year.
Melkonian said she wished Telesis had “engaged the homeowners earlier.” So, what took so long for the HOA conversation to move forward?
“That’s a very good question. But it seems like we were always busy — we had never felt inactive. But we felt that we wanted to embrace the homeownership side of the community, and the housing authority and we are working together to figure that out,” Melkonian said.
Melkonian continued, saying “the housing community has matured, it has a community center, it has more people, it has reached a point of settling down — and don’t forget we’ve had three hurricanes along the way … We’re still completely involved is that aspect of restoration [after Florence], that’s not to excuse not doing things, but it seems like we’ve been doing things every day.”
She added that the goal of the HOA was “engagement among the three groups. The two groups are extremely engaged, the housing authority and New Dawson Limited Partnership [Telesis], which represents the majority of the membership in the HOA, has been very engaged. And during this time the community center was built, the playground was built.”
What will it take to include homeowners in their own HOA?
Despite the decade-long delay, Melkonian didn’t describe bringing homeowners into the HOA as being particularly difficult.
What would it take? According to Melkonian, “literally, we call a meeting.”
She continued, “Really, we would call a meeting. Housing authority and [Telesis] get on the same page. We look ahead from where we are after the Hurricane aren’t the emergency they were – there are still going to be issues – and we look at what we can do to bring new investment to the area, which we wanna do, and then we call a meeting. Literally, we call a meeting. The two institutional entities come together around their future plans. I think that’s really the first step.”
Melkonian said Telesis and WHA have “been talking very actively” about the issue.
“And we’ve been talking about it for some time. There’s been different — as you’ve recorded in your stories — different leadership, different folks at the WHA. With the leadership we have now we want to bring together their views with what they want to do,” she said.
Melkonian added that, “It’s not entirely up to us. It’s something we both want to design a way forward.”
Asked about these conversations, WHA CEO Katrina Redmon said only, “Telesis is in full control of [the] HOA,” and said WHA was not aware of any planned meetings to more fully activate the HOA board.
What happened to the money?
In 2012, then-CEO for WHA Michael Krause told at least one resident in an email that he had mandated refunds for those who had paid HOA fees.
Melkonian said these fees were contractually owed by residents, adding that residents had “gotten their money’s worth” in terms of services provided.
“Well, it’s for the streets, the landscaping, the stormwater management system, the open spaces, the park, the playground, the community center. For example. all the lawns are mowed and the parks are kept in great shape, “Melkonian said. “It’s to maintain the common areas that are commonly owned by the homeowners.”
However, while Melkonian maintains that HOA fees were legally owed, she noted that there was a discrepancy between who paid, and who hadn’t (she added that Telesis was still working on a “full accounting” of payment histories for homeowners). When Telesis noted this discrepancy, it redirected all the HOA fees into a special account.
“In the practical operation of this, there have been some people who have paid as individual homeowners – their assessments, their dues – on a monthly basis and some people who have not,” Melkonian said. “But, because we knew there was a discrepancy between people who had paid and people who hadn’t paid, we decided to keep in escrow all of the payments that were made by people who did make payments.”
Because these fees are still being held in escrow, Melkonian said Telesis has been paying for all the services HOA fees are intended to cover.
“So, the fact of the matter is, to come to the practical bottom line, New Dawson Limited Partnership has been paying the full freight of all of those costs [i.e. maintenance, stormwater, streets, etc.] and through all these years it is the entity that has paid full freight for those costs. No one else has paid,” she said.
Melkonian didn’t say if refunds were on the table, but acknowledged the “inequity” that some had paid and others hadn’t. It’s an issue that a “fuller board,” with members including homeowners, would help decide on.
“So, if there came a time, which we had planned on coming into, to reassess and to work with a board that would be elected by the rules of the declaration, we would make a judgment on what to do with those escrowed funds,” she said. “We have kept those funds, in order to come to a decision about their distribution.”
Melkonian made a point of expressing admiration for Redmon and WHA, saying “they have done so much with a limited budget,” and pointed to the significant improvements that have been made to the Jervay development since the barracks-style housing, built in the 1940s, was torn down in the 1990s to make way for new development. She said Telesis and WHA needed to “come together” about their collective future plans for Jervay.
“We have engaged in a legal review of the HOA, and its authorities and powers, the choices that it can make it the future, decide exactly who the members are because that’s still an open question, and then the declarant [Telesis and WHA] will hold a committee to decide how it wants to proceed.”
According to Melkonian, that meeting will include “all members” — including individual homeowner — and will be held before March 21 of this year.
Send comments and tips to Benjamin Schachtman at firstname.lastname@example.org, @pcdben on Twitter, and (910) 538-2001.