Sacramento homeowners battle national developer in lawsuit over Natomas reservoir
Homeowners of a large North Natomas community and a national homebuilder are in a legal battle over who should pay for reservoir maintenance.
The Westshore Community Association filed a lawsuit Thursday in Sacramento Superior Court alleging national homebuilder K. Hovnanian Homes owes the homeowners nearly $800,000. The suit alleges the developer collected the money but did not properly maintain a reservoir as an agreement requires.
K. Hovnanian was the developer for Westshore, which has over 1,300 residential lots near the corner of Natomas Central Drive and Del Paso Road, the lawsuit said. The lots were sold between 2007 and 2020, according to the suit.
When the development was built, bylaws required K. Hovnanian to handle maintenance of the man-made 24-acre reservoir, which has walking paths around it, the lawsuit alleged.
But in 2017, the association learned K. Hovnanian had not been paying the vendors that were maintaining the lake, and the vendors threatened to stop servicing the lake, the lawsuit alleged. To avoid damage to the lake, the association and at least two members of K. Hovnanian’s then-board of directors signed a reimbursement agreement in 2017.
The agreement stated K. Hovnanian must reimburse the association on a monthly basis for all costs associated with lake maintenance, retroactive to Jan. 1, 2017, the lawsuit alleged.
In 2020, the association learned K. Hovnanian had still not been paying the reservoir vendors although it had been receiving the homeowners’ checks, the lawsuit alleged. K. Hovnanian now owes the association $769,571, the lawsuit alleged.
“The association has been left with no choice but to file this action and seek recovery of the monies defendants are wrongfully withholding,” the lawsuit said.
Efforts to seek comment from K. Hovnanian’s officers were not immediately successful.
The lawsuit claims breach of contract, promissory fraud and other claims. In addition to K. Hovnanian, names five members of the board of directors. The board members named as defendants in the lawsuit were not listed as of Friday as board of directors on K. Hovanian’s website.
