COVINGTON - Residents of Cottage Links at Corrydell, a retirement community located off the Covington By-Pass, are alleging that a developer misused their homeowners association fees and have applied for a warrant to have him arrested.
A majority of homeowners in Corrydell agreed to take criminal action against F.L. "Rusty" Bullard after they found discrepancies in his use of initiation fees paid by residents to join the association.
According to Corrydell residents Don and Joyce Cline and Pat Buchanan, Bullard used the fees to pay for expenses related to property that is owned by his company, Leverett LLC, in violation of a neighborhood covenant.
The covenant states that a $250 initiation fee is to be collected upon the first sale of each home in the neighborhood, with the money to be used only "for unforeseen expenses, additional equipment or services necessary."
Buchanan said the initiation fees are meant to be spent when Cottage Links at Corrydell Association Inc. takes over the property, which will happen when 75 percent of the lots have been sold or in 10 years, whichever comes first.
Once that happens, the association must purchase a $1 million liability insurance policy within 30 days, he said, a cost that should be covered by the initiation fees.
But the residents are alleging that Bullard instead used at least $9,750 in initiation fees for his own purposes. On Jan. 28, on behalf of 24 homeowners, Buchanan filed an application for a criminal warrant against Bullard, alleging he committed 33 acts of theft by conversion.
The residents said Bullard used the money to pay a $255.84 stormwater bill on the undeveloped phase three of the neighborhood, owned by his company, Leverett LLC.
In addition, they said Bullard spent $6,368.37 to fund new construction on property near the entrance of the subdivision, also owned by Leverett LLC, that is zoned highway commercial.
Expenditures include more than $2,100 for city water service; nearly $1,700 to Snapping Shoals EMC; and more than $600 for landscaping.
Of the $9,750 in contention, $3,381.63 cannot be accounted for based on the records obtained from Bullard, they said.
"He's using our money from a nonprofit organization to pay for a corporation that's making money," said Don Cline.
Bullard did not return calls seeking comment.
The discrepancies were discovered after Bullard told residents he was short on money and intended to raise the $40 monthly fee they pay for lawn maintenance to $55, according to Joyce Cline.
At that point, the chairman of the board of directors for the Corrydell homeowners association refused to pay until they were given an account of how all their money had been spent, she said.
The Clines have assembled a hefty file of financial records that includes copies of checks bearing the name and account number of Cottage Links at Corrydell Association Inc. used to pay the stormwater, electric, water and other bills.
"He's diverted that money to pay electric bills and stormwater bills and repairs and new construction - things that will benefit only him, not us," Don Cline said.
Twenty-four out of 36 homeowners agreed to pursue criminal action against Bullard. The application for an arrest warrant was filed in Jasper County, headquarters for Leverett LLC.
Typically such matters are handled civilly, according to a source in the Jasper County Magistrate Court Clerk's Office. In cases where law enforcement does not take action on a warrant, the complainant must file an application for the warrant and attend a prewarrant hearing where a judge will determine if there is probable cause, the source said.
"If we do it criminally, it's something we can do ourselves without hiring a lawyer," Don Cline said. "If we do it civilly, it could be strung out for years and years and there's a lot of fees in it. If the magistrate judge finds probable cause, he can bind it over to Superior Court and they will appoint a prosecuting attorney. We're a bunch of retired seniors in here, and we don't have a whole lot of money."
A prewarrant hearing scheduled for Feb. 15 was postponed for 30 days by Chief Magistrate Judge Kenneth Jackson to allow the two parties to work out a settlement.
The residents are hopeful that Bullard will comply with eight points of agreement they have established, chief among them the refunding of the homeowners association money.
The Clines and Buchanan said they love their neighborhood and want nothing more than for the disagreement to end peacefully.
But they also say they want others in similar situations to know they can fight back.
"The best way to have a court case handled is to have two parties settle it. We're not wanting to send him to jail for three years like he could get. We want him to settle it," Don Cline said.
Crystal Tatum can be reached at crystal.tatum@ newtoncitizen.com.