COVINGTON - Residents of Cottage Links at Correydell have settled a dispute with developer Rusty Bullard over the alleged misappropriation of homeowner's association fees.
After the agreement was signed Friday, at the residents' request, a Jasper County magistrate judge dismissed a warrant application filed against Bullard by resident Pat Buchanan on behalf of a majority of homeowners in the neighborhood.
Residents alleged that Bullard spent at least $9,750 in initiation fees collected when homes were sold in the subdivision to pay for expenses related to property that is owned by his company, Leverett LLC, rather than earmarking the money for the association, in violation of the neighborhood covenant.
"We got exactly what we were asking, and we're all just delighted with it. We're looking forward to moving ahead," said resident Don Cline of the resolution.
Bullard has agreed to return $5,424 spent on the property owned by his company, which is located at the entrance of the subdivision.
He also agreed to assume all responsibility for the property, including late fees and penalties related to utility payments.
Though the property is in Bullard's name, he said it will be turned over to the homeowner's association, as previously agreed, once 65 percent of the houses in the neighborhood are sold.
Bullard said that deadline is drawing near, and as part of the formal agreement, promised to turn the property over on or before June 1.
Bullard said he used the money to pay for water service and lighting on the property, but said, "It wasn't improperly spent," since the money was spent on services for the neighborhood.
"There was no wrongdoing on my part," he said.
Bullard also agreed to be responsible for any penalties from the IRS for not filing a 2005 tax return for Cottage Links at Correydell Association Inc. and combining 2005 and 2006 income on the 2006 return.
Bullard said there was very little income in 2005, which came in late in the year. He said he did not deposit the money into the association's checking account until early 2006.
Bullard said he is satisfied with the agreement.
"This is fine. I wouldn't have had a problem agreeing to it without going through all this rigmarole," he said.
Aside from one conversation with homeowners who were concerned that money was being improperly spent, "I had no clue there was a problem," Bullard said. "I had no clue they were going to court."
The warrant application alleged Bullard committed 33 acts of theft by conversion.
Typically such complaints are handled in civil court, 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 pre-warrant hearing where a judge will determine if there is probable cause, the source said.
At a pre-warrant hearing in February, Jasper County Magistrate Judge Kenneth Jackson postponed the matter for 30 days to allow both sides to come up with a resolution.
Crystal Tatum can be reached at email@example.com.