Rebuttal to Shea Sept 1 FAQ

🛑 IMPORTANT FOLLOW-UP ON SHEA’S NEW CLUB FAQ - check your email
Shea’s September 1 FAQ raises more questions than it answers.

Here's my rebuttal their Sept 1 FAQ 

Shea now states that the Association and Club Owner signed an original Club Membership Issuance Agreement in 2022 and operated under it ever since — but neither party can now locate the signed copy.

That is a significant statement.

Sunstone’s own Board-adopted Record Retention Resolution, dated March 30, 2022, specifically states that Association books, records and papers must be maintained for at least 10 years.

The same Resolution says expired Association contracts must be maintained for at least 10 years and further states that original vendor contracts may not be shredded.

So homeowners have a very reasonable question:

IF AN ISSUANCE AGREEMENT WAS ACTUALLY EXECUTED IN 2022, WHY CAN NEITHER THE ASSOCIATION NOR THE CLUB OWNER PRODUCE THE SIGNED AGREEMENT TODAY?

Shea should also identify the exact date that agreement was supposedly executed.

That date matters.

Purchasers who bought after the agreement became effective were entitled to receive current disclosures accurately describing the community’s existing financial obligations and material arrangements.

That does not necessarily mean Nevada law required every purchaser to physically receive the complete signed Issuance Agreement itself.

But it absolutely raises this question:

WHERE, IN THE DISCLOSURES PROVIDED TO PURCHASERS AFTER THE AGREEMENT WAS EXECUTED, WERE THE EXISTENCE AND MATERIAL TERMS OF THAT AGREEMENT DISCLOSED?

📌 THE 2022 TIMING MAKES THE MISSING AGREEMENT EVEN MORE IMPORTANT

The Association adopted its 10-year Record Retention Resolution in March 2022.

Shea now says an Issuance Agreement was also executed in 2022, governed the relationship ever since, yet neither party can locate the signed copy.

So homeowners deserve to know:

HOW DOES A MATERIAL ASSOCIATION AGREEMENT EXECUTED IN THE SAME YEAR AS THE HOA’S 10-YEAR RECORD RETENTION POLICY BECOME UNABLE TO LOCATE ONLY FOUR YEARS LATER?

There may be an explanation, but residents should not have to guess.

The Board should identify what contemporaneous records exist showing exactly what was approved, what was signed, who signed it, and what the actual terms were.

There is another major inconsistency in Shea’s FAQ.

Shea states that the 15% annual increase provision “already appeared in the 2022 agreement in nearly identical form.”

But Shea also tells us that neither party can locate the signed agreement.

So what document is Shea relying upon to tell homeowners what the signed 2022 agreement contained?

Was there an unsigned draft?

A final electronic version?

Board minutes approving it?

A resolution authorizing execution?

Emails transmitting the agreement?

Invoices or payment records referencing it?

There should be a documentary trail if this agreement governed the HOA’s financial relationship with the Club for approximately four years.

🛑 THE “WATER BILL” COMPARISON DOES NOT ANSWER THE ISSUE

Shea’s FAQ compares the Club payments to paying an ordinary HOA expense such as a water bill or paying a landscaper or security vendor.

But those are not the same type of arrangement.

A water bill is payment to a utility for services consumed by the Association.

A landscaper is generally hired under a service contract to perform work for the Association.

This proposed Club agreement involves much more.

A water bill does not require the HOA to:

• assume collection risk if homeowners fail to pay
• accept potential annual increases of up to 15%
• agree to indemnification provisions
• assume contractual liability
• enter into a long-term financial relationship with a privately owned Club
• commit Association funds under terms negotiated with the Club Owner

📌  THE “GYM MEMBERSHIP” COMPARISON ALSO HAS LIMITS

Shea says Club membership is similar to a gym membership because homeowners receive a right to use the facilities but no ownership interest.

But this is not an ordinary gym 
membership.

A normal gym member can generally cancel if the price or terms no longer work for them.

Sunstone Trilogy homeowners cannot simply cancel.

Membership is tied to homeownership.

And ordinary gym members are not generally making their homeowners association financially responsible under a separate indemnification agreement if the gym owner gets sued.

That is why the actual indemnification and liability language matters.

If Shea wants to compare this to a gym membership, homeowners should ask:

WOULD AN ORDINARY GYM MEMBER BE REQUIRED TO HAVE THEIR HOA DEFEND OR INDEMNIFY THE PRIVATE GYM OWNER FOR CLAIMS ARISING FROM THE FACILITY?

If the answer is no, then the gym analogy does not fully describe the legal and financial relationship being proposed here.

The CC&Rs may require Club membership.

That does NOT automatically mean every provision contained in this particular agreement is mandatory, reasonable or beyond Board scrutiny.

The Board is still being asked to approve the actual terms of this contract.

And that requires judgment.

⚖️ FIDUCIARY DUTY STILL MATTERS

Shea’s FAQ also states that Shea-employed Board members do not have a conflict regarding this item because the CC&Rs already require Club membership.

But requiring membership is not the same thing as requiring the Board to accept every contractual term proposed by the Club Owner.

Nevada law imposes fiduciary responsibilities on HOA directors.

The Board must act on an informed basis, in good faith and in the best interests of the Association.

Developer control does not simply erase those duties.

There is also a published case involving another Trilogy community that homeowners should know about.

TRILOGY AT GLEN IVY MAINTENANCE ASSOCIATION v. SHEA HOMES, INC.
235 Cal.App.4th 361 (2015)

This was a published California Court of Appeal decision involving Shea Homes and a Trilogy HOA.

The appellate court specifically stated that while Shea and its representatives controlled the HOA:

“Shea and its representatives owed fiduciary obligations to the Association.”

The HOA and homeowners alleged breach of fiduciary duty involving a telecommunications agreement and revenues they alleged should have benefited the Association.

They alleged that Shea failed to disclose the agreement and its financial interest in it.

Shea attempted to have those claims struck through California’s anti-SLAPP process.

The trial court refused.

Shea appealed.

The California Court of Appeal affirmed the trial court’s ruling and allowed the claims to proceed.

IMPORTANT:

The appellate court did NOT ultimately rule that Shea committed a fiduciary breach.

But the published decision is important because it recognizes a basic principle:

A DEVELOPER-CONTROLLED HOA BOARD IS STILL AN HOA BOARD, AND DEVELOPER-AFFILIATED DIRECTORS CAN STILL OWE FIDUCIARY DUTIES TO THE ASSOCIATION.

That principle matters here.

⚖️ ANOTHER TRILOGY-RELATED DISPUTE: WICKENBURG RANCH

Homeowners at Wickenburg Ranch in Arizona have also publicly raised concerns involving HOA governance, financial transparency, disclosures and money collected through an HOA for privately controlled recreational facilities.

In 2025, residents sought governmental review of what they described as a “pass-through” financial structure involving HOA assessments and a privately owned Golf & Social Club.

There is also ongoing federal litigation involving Shea Homes and several Wickenburg Ranch homeowners.

Shea sued homeowners asserting claims including defamation and business disparagement.

The homeowners filed counterclaims and alleged, among other things, that Shea’s litigation interfered with their efforts to seek governmental review of community governance and required disclosures.

A federal judge later dismissed those particular counterclaims.

The underlying Shea lawsuit continued.

IMPORTANT:

The Wickenburg allegations are not court findings of wrongdoing.

The facts are also not identical to Sunstone.

However, homeowners should know that questions surrounding developer control, private recreational facilities, assessments, disclosures and financial transparency have arisen in other Trilogy-related communities as well.

And Sunstone does not need to rely on what happened somewhere else to justify asking questions here.

WE HAVE OUR OWN DOCUMENTS.

We have:

• Shea’s September 1 FAQ stating that a 2022 agreement existed but cannot now be located

• Sunstone’s March 30, 2022 Record Retention Resolution requiring Association records and contracts to be preserved

• A proposed “restated” agreement containing substantial financial and liability provisions

• A 15% annual increase provision

• Mandatory homeowner funding of a privately owned Club

• Shea-employed directors being asked to approve the agreement

Before this Board signs anything, homeowners deserve clear answers:

1. What exact date was the original 2022 agreement executed?

2. Who signed it?

3. Where is the signed copy?

4. What evidence establishes the exact terms of the missing agreement?

5. What document proves the 15% provision existed in the signed 2022 version?

6. Where was the existence and material terms of that agreement disclosed to purchasers who bought after it was executed?

7. What Board meeting approved the original agreement?

8. Where are the minutes, resolutions, emails or other records documenting its approval and execution?

9. What independent legal review has the HOA obtained regarding the financial, indemnification and liability provisions in the proposed agreement?

10. If this is merely a “restatement” of an agreement that supposedly already existed, why should the Board approve anything until the original agreement — or reliable documentary evidence establishing its exact terms — has been produced and reviewed?

THIS IS NOT ABOUT SPREADING RUMORS OR ACCUSING ANYONE OF A CRIME.

It is about documentation.

It is about transparency.

It is about fiduciary responsibility.

It is about making sure homeowners are not bound to a major long-term financial agreement until the people approving it can demonstrate exactly what existed before, what is changing now, and why the new terms are in the best interests of the Association.