Ruling upheld in HSV assessment dispute

The Arkansas Court of Appeals on Wednesday upheld a lower-court decision stating the Hot Springs Village Property Owners Association acted properly in its use and collection of assessed funds and its development and improvement of the community.

The HSV POA maintained four points on appeal, including a two-tiered assessment fee structure for property within the Village, use of overlay zones, nonpaying inventory lots contributing to a quorum and general assessment funds used in master planning.

“We are grateful to the Court of Appeals for its time and attention in considering this case and understanding the unique structure and financial situation faced by Hot Springs Village,” Lesley Nalley, CEO of the HSV POA, said in a news release. “Property owners approved this fair and equitable assessment system. The court recognized that property owners in Hot Springs Village have the right to govern themselves in a way that benefits the community and affords the opportunity for growth.”

The decision found the POA, “Acted in good faith and in what it considered the best interests of the POA and Hot Springs Village.”

Two property owners filed a lawsuit in 2015 challenging four points of the structure, arguing the two-tiered system was illegal based on the Village’s governing documents and protective covenants.

A three-judge panel of the court disagreed saying the two-tier system, which was the primary focus of litigation, fell within the definition of an annual assessment. In addition, the appeals court stated the POA has the authority to create overlay zones.