The Shore Condos Battle Developer AND Villas On Town Lake

The Shore Condos Battle Developer AND Villas On Town Lake

The rumble on Rainey Street… it’s a clash of the condos!

Like most condominiums, The Shore Condos are controlled by its home owners association (HOA).  Like several condominiums in downtown Austin, The Shore Condos are actually a sub-association of a more senior association.  In this case, The Shore Condos are the “residential unit” and one half of a master association called the Waterfront Master Condominium Association, Inc.   The other half is a “hotel unit” – ostensibly setup as the place holder for the Hotel Van Zandt (and may still be).

In 2005 High Street Rainey, LP purchased Lot 1, Red River Addition, from Sack Family Holding, Ltd (the “Waterfront Property”).  In 2006 High Street Rainey, LP created the Waterfront Master Condominium Association, Inc.  Prior to that, when the Villas On Town Lake’s land was originally deeded, the seller withheld a 50 x 50 right-of-way easement where Red River meets Davis St in order to provide access to the south of Davis Street in perpetuity.

In 2007 High Street Rainey LP + JMIR-Austin Hotel, LP + The Waterfront Master Condominium Association, Inc. sued the Villas On Town Lake Owners Association, Inc for encroaching on that easement.  Note that at this point in the story, the “residential unit”, aka the Shore Condominium HOA is not named in the lawsuit.  In fact, the “residential unit” wouldn’t learn about this lawsuit until recently.

As best as we can figure out, the Villas decided this easement could be used to locate a dumpster.  The developer of The Shore, who by right also has use of the 50 x 50 easement, removed the dumpster and the parties sued each other.  In 2008 the parties reach a written settlement agreement, but for reasons unknown this agreement wasn’t actually executed.  Earlier this month, the Villas filed a motion to enforce that settlement agreement.

Not so fast.

The Shore Condominium HOA (“residential unit”) legally intervened by filing an objection to the Villas motion to enforce the settlement agreement, on the grounds that any settlement agreement would bind The Shore Condominium HOA to something they weren’t a party to.  So, the Shore HOA wants to put the kibosh on a settlement agreement that could adversely affect their interests.

B-b-b-but wait it gets worse!

The Shore Condos seem to be unclear about how, or if, they are would be bound by the settlement agreement.  The Shore Condominium HOA asserts in a legal filing that:

The Shore Association is not clear on how such terms [re: the settlement agreement] would impact its’ members regarding the easement contemplated.

To the best of our knowledge this is a Mexican standoff.  Since the original parties sued each other, it’s unlikely they will both simultaneously drop all of their claims.  The judge is unlikely to enforce a settlement agreement that would bind a party that was not originally part of that agreement.

Friggin’ dumpsters.