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Dispute with The Point developer costs OPA big bucks
by Joe Reynolds

Terns Landing resident Bill Rakow is outraged over OPA handling of an issue that impacts all lot owners in The Pointe area of the Pines. His ire was sparked when he was drawn into an ongoing dispute between OPA and the developer of The Point over the Declaration of Restrictions.

When he sought information from OPA about the need for an ARC building permit on a lot he decided to sell in the upscale Point area of the Pines, Rakow says he was brushed off. “I knew there was some dispute involving ARC permitting but not all the details,” he explained. “I needed to know what the requirements were to inform prospective buyers. There seemed to be conflicting information about whether or not an ARC permit was required to build.”

Rakow met initially with General Manager Dave Ferguson and was told any home built on the lot would require ARC approval. Rakow investigated on his own, uncovering numerous documents, then fired off an email telling OPA it was wrong. “Not only was OPA wrong, but their position may have cost the community $50,000 or more in uncollectible permit fees related to development in The Point, essentially because of their stubbornness in this matter.”

 The issue is fairly complicated and involves the Declaration of Restrictions for The Point, OPA’s general counsel Joe Moore, Ferguson, and now Glenn Duffy, OPA Board president. The wrangling actually began years ago with a July 5, 2002 letter from OPA to all property owners in The Point.

 In the letter, Dave Ferguson quotes from the Declaration of Restrictions filed with Worcester County on August 30, 1999. Ferguson then concluded, “Therefore, all lots within Section 17, The Point, must have the approval of the Architectural Review Committee, prior to the time that the construction of any proposed improvements begin. The Board of Directors has determined that no fee will be assessed for the approval of plans for construction which has been initiated prior to April 15, 2002.”

 Ferguson’s letter was essentially ignored and numerous homes were subsequently built in The Point without any plans review or permit from ARC. Most of those homes would not comply with the current ARC guidelines. However, as Rakow is quick to point out, “The Point is one of the most beautiful areas of Ocean Pines, with some of the nicest homes.”

 By early 2003 OPA brought in attorney Joe Moore who sent letters to a number of builders stating they must obtain ARC permits and including a sentence stating, “Accordingly you are hereby formally notified of this requirement and, the Association is hopeful that you will promptly bring all your construction within compliance of the requirements of building within the Ocean Pines subdivision.”

 At least three builders responded in writing to Moore – Poremski Homes, Landmark Homes, and Newport Homes. All expressed a similar position, saying the Declaration of Restrictions for The Point had never been accepted by OPA and thus OPA and/or ARC had no authority over the building process for lots in The Point.

 The issue has festered since then. Homes were built in The Point without ARC approval and OPA took no legal action to stop any construction. A few lot owners obtained a permit from ARC, but Rakow felt OPA took no action against those who didn’t because it was on shaky legal ground, at best. “For starters, Ferguson’s initial letter referenced an outdated Declaration of Restrictions,” Rakow points out. “The current restrictions recorded in the land records at the county state that permits must be obtained from ARC only after OPA accepts the Restrictions. OPA has never accepted the restrictions. OPA has been feuding with the developer, David Meinhardt, since the earliest days of The Point.”

 Rakow’s reference is to a dispute some years ago over The Point wanting to offer homeowners direct mailbox delivery. OPA objected and the case ended up in court. OPA lost. Apparently things went downhill from there. Recently, enter Bill Rakow who wanted to sell his lot in The Point. Rakow asked Ferguson, “What do I tell prospective buyers regarding ARC permitting so I can comply with the Maryland Homeowner Association Act?”

 Rakow had, and still has, many questions – “Why hasn’t OPA accepted the recorded Declaration of Restrictions? Will all those who built without ARC approval be sent a bill at some time? Will ARC at some point force owners to comply with ARC guidelines?  Will OPA refund the permit fees of the few lot owners who obtained ARC permits? How can OPA justify losing tens of thousands of dollars in permit fees with its refusal to accept recorded Declaration of Restrictions?”

 Rakow’s odyssey in search of answers began with Dave Ferguson, and then escalated to Glenn Duffy when answers were not forthcoming to his satisfaction. Eventually Duffy brought attorney Moore back into the issue. That’s when Rakow became really upset.

Moore sent a letter to Dave Ferguson on February 3, 2006, in response to Duffy’s intervention. Relevant sections of the Moore letter include:

  • For the first time in the history of Ocean Pines, a developer without cooperating with Ocean Pines or acquiring the agreement of Ocean Pines Association, unilaterally recorded a Declaration of Restrictions in Section 17 (The Point) which arbitrarily stated that the developer was required to acquire no permits whatsoever from Ocean Pines Association until the Association agreed to the Declaration of Restrictions.
  • Of course, the Declaration of Restrictions at that time contained the unilateral imposition by the developer of individual mail service in the section which was not agreed to by the Association. The lawsuit ensued and, thereafter, when the Association requested the developer to include the agreed upon Declaration of Restrictions with the Association, the developer declines to do so until such time as a complete turnover agreement was in place by which all facets of the turnover of streets, drainage and public areas of Section 17 was accomplished.
  •  As you know, that is presently in the works and should be accomplished, hopefully, in the near future. In the meantime, should Mr. Rakow decide to ignore the spirit of inclusion of Section 17 in the community of Ocean Pines, he is free to do so but, in my opinion, it is violative of the original intent of developers in sections within Ocean Pines and the spirit of community which has been so effective in the past in maintaining Ocean Pines as the viable community which it has become.

In a February 6, 2006 letter from Ferguson, transmitting Moore’s letter above to Rakow, he writes, “In essence there is a legal loophole that exists at present that allows owners or builders in The Point to avoid applying for permits with the Ocean Pines Association. Whether you choose to exercise that legal right or choose to voluntarily comply with the intent to the regulations to have uniformity of standards is, of course, yours to make.”

Rakow was outraged. “I find both Mr. Ferguson’s and Mr. Moore’s moralizing statements ridiculous. Their implication of some moral obligation for me or any member of OPA to pay voluntarily fees of $1,250, an escrow of $1,500, and impose upon ourselves additional arbitrary building restrictions when there is no legal obligation to do so is outrageous. It is disingenuous to suggest anyone would do so if given the facts. I also find it interesting that Joe Moore didn’t mention OPA lost that earlier mail service law suit with the developer.”

As for the Declaration of Restrictions for the Point, they are indeed recorded at the county. Rakow says if OPA simply accepted the restrictions as recorded, then lots in The Point would be under ARC control. “What I can’t figure out, “he says, “is why OPA refuses to accept the Declaration of Restrictions. Seems to me OPA has no choice anyway, since they are recorded at the county. I can’t believe OPA caused this entire fiasco simply to object to a mail service issue.”

Rakow believes the only way to change the Declarations of Restrictions now would be by a majority vote of the lot owners in The Point.

If that is the case, the disputed Declaration of Restrictions is no longer in the hands of OPA and the developer, and OPA gains nothing by not accepting them. In fact, as Rakow suggests, OPA may have lost a great deal in this entire affair.


Uploaded: 2/18/2006