Residents in three Tennessee tiny home communities say a developer kept authority over their homeowners associations after that control should have passed to owners, and they claim the extended control cost residents money.
In Deer Lick Falls, Sunset Bluff, and Water's Edge, homeowners have described the associations as "zombie HOAs," alleging that the developer remained in charge far beyond the required turnover point, Realtor.com reported.
Here's what to know
The fight involves Tennessee developer Claude "Chip" Hayes III.
Homeowners say the governing documents set a clear deadline for developer control to end: either five years after the first lot was sold to someone other than the developer or once 75% of the lots had been sold.
They contend Hayes stayed in control past that point.
Legal action spread across the three developments starting in 2024. Deer Lick Falls residents sued to gain control of their HOA. At Water's Edge, residents alleged that property taxes on common areas had not been paid for more than two years and that financial records were not properly shared. At Sunset Bluff, more than 40 homeowners joined a lawsuit seeking $5 million in damages as well as control of HOA funds and records.
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Homeowner Linda Ranz, who owns properties in both Water's Edge and Sunset Bluff, said, "Nobody knows where the money's gone, but we basically just want him out. We want him to quit stealing our money from the HOA," per Realtor.com.
Hayes has said little publicly about the court fights, per Realtor.com, but he said, "I should have folded up and walked away a long time ago. Anybody else would have. But I don't want to leave the customers damaged in this. This is something that I love and believe in."
More background
Residents say the cases are about more than who gets to run the HOAs.
According to homeowners, the developments were sold with promises of vacation-style features such as hiking trails, kayak access, a clubhouse, and a saltwater pool that still had not been built.
Water's Edge buyer Gregg Boling, who purchased in 2021, said, "The pool was always a part of the selling process for us," per Realtor.com
Boling also described construction issues at his property, saying, "They put my water main almost 30 inches down from the surface. I literally had to dig a hole 44 inches down until I found it. And the only reason I found it was because I borrowed a metal detector from a friend up there. I'm realizing they were so negligent, they didn't even do that part properly."
Many homeowners are frustrated with their HOAs. Across the country, associations have drawn criticism for blocking money-saving and planet-friendly upgrades such as rooftop solar panels, drought-resistant landscaping, and native plant lawns. For homeowners trying to navigate restrictive association rules, it can help to understand the process for working with HOAs and pushing for bylaw changes.
What's being done?
At Sunset Bluff, homeowners voted Hayes out of HOA control and replaced him with their own board of directors. That new board quickly changed the rules so residents could select their own property managers instead of being required to use the developer's company.
The lawsuits also aim to open up the associations' finances, with residents seeking more transparency on budgets, contracts, and HOA funds. One Sunset Bluff complaint alleges that nearly 80% of the HOA budget went to lawn care contracts given to another company Hayes owned, while other claims say HOA money was spent on unauthorized expenses.
"He always does the same thing. He just obfuscates and delays, knowing that you'll run out of energy or hoping you will run out of energy," Boling said.
Where can I learn more?
The Tennessee standoff is part of a wider trend of homeowners pushing back when HOAs overreach. The same tension shows up in fights over solar panels, landscaping, and other home upgrades that can shape both monthly costs and day-to-day living.
• In Ohio, homeowners found the law was on their side to advance a solar project.
• One homeowner faced lawyers over plants in a front yard despite water-saving landscaping.
• Across the country, residents are fighting back against HOA bans on native plants.
• Another resident found a clever workaround when strict HOA garden rules blocked yard changes.
• A homeowner learned what their HOA was doing was illegal when it blocked a home upgrade.
Cases like these help show why Tennessee residents want more transparency and control. When HOA authority goes unchecked, fights over governance can spill into everyday decisions about money, property, and quality of life.
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