HAMPTON, Va. - A local Hampton community is suing its developer over claims that homeowners are being overcharged for cable and internet services.
The homeowners of H2O by Chesapeake Homes, near the Hampton Coliseum, say they are within their legal rights to terminate the existing communications agreement, which is forcing them to pay more than double.
"It's not right. We need to stand up and do something," says Moscoe Gardner, a homeowner and the President of H2O's HOA.
To understand the structure of the community and why the lawsuit has been filed, News 3 turned to the homeowner's contract.
Sandler at Coliseum Central LLC., built the H2O community in 2008. They then created a separate company: Coliseum Central Infrastructure Management, also called CCIM.
Subsequently, CCIM is controlled by the developer, Sandler, which according to documents was established to provide communication services to homeowners; i.e., cable and internet.
Outlined in the contract, homeowners pay CCIM and CCIM pays the company providing the service. In this case, the company providing service is Cox.
"Now the big problem is CCIM has been charging fees for these communication services about and in some cases, more than double the actual costs of what those services would be if the owners just called up Cox," said William Sleeth III with the law firm Gordon & Rees.
Attorney, William Sleeth, is representing the homeowners in litigation.
According to court filings, residents are being charged $181 per unit for communication services when Cox basic services only cost $74.98. CCIM is also requiring the Association to pay $76.02 per unit in "processing fees" and "taxes and regulatory fees."
"It's just not right this that a big developer, a major company. It's taken so much advantage of regular hard working everyday people," Gardner says.
Sleeth argues that more than $100 difference is going to CCIM.
"Essentially, what happened is the developer created a corporate structure where they can line their own pockets on the backs of the homeowners," he says.
Court documents show the agreement was put in place in 2008 when H2O was still under the control of Sandler's HOA board of directors.
However, just recently, that arrangement ended and the community could appoint its own board.
"The law says that when the transition of control of the board of directors happens, there's a very narrow window in which the new owner-elected board can make the decision to terminate certain contracts that were put in place by the developer-controlled board," Sleeth says.
Gardner, a homeowner himself and also the President of the HOA, says they were prepared.
"We filed our motion within seven days because we already had everything ready to go. We already had our lawyer in place. As soon as we took everything over and took over, the master association was able to go and try to get rid of this contract," he says.
CCIM on the other hand is saying that the homeowners can't validly terminate the agreement/contract.
In court documents filed in March, the defendants say they're not in default and the communications agreement doesn't expire for years. They claim the HOA has breached the contract and the case should be decided through arbitration rather than open court.
"I think the developers worried that when we show up at the first hearing, in Hampton Circuit Court, you're gonna see hundreds of the homeowners come out in support of the community," says Sleeth.
News 3 reached out to the attorneys representing CCIM and they declined to comment.
When News 3's Erin Miller asked the residents why they're speaking out now, Gardner said, "We want it out in the open. We want people to understand what's going on so that this wouldn't happen to anybody else in the future."
Gardner says there are close to 200 homes in the community and they're all paying the same price.
The most recent documents filed with Hampton Circuit Court come from the homeowners. The HOA is now asking a judge to find the defendants in default. They claim they have not received a proper response from the defendant within 21 days.
"We're just regular everyday people that work every day, military veterans, retired people, just working people and they're making that kind of money off of us," said homeowner Ahmad Wyatt. "They're fighting us tooth and nail you know, just every In a working people - it really bothers me."