Tennessee Tiny-Home Buyers File $5M Lawsuit Against Developer Over HOA Control and Unbuilt Amenities
Residents in three Tennessee tiny home communities—Deer Lick Falls, Sunset Bluff, and Water's Edge—have initiated legal action against developer Claude "Chip" Hayes III. They allege that Hayes maintained control over their homeowners associations (HOAs) beyond the stipulated turnover points, which were either five years after the first lot sale or once 75% of lots were sold. Homeowners describe these as "zombie HOAs," claiming that Hayes's continued authority has led to financial mismanagement and a failure to deliver promised amenities. Lawsuits, which began in 2024, seek to transfer HOA control to residents and demand financial transparency. At Sunset Bluff, over 40 homeowners are seeking $5 million in damages, while Water's Edge residents reported unpaid property taxes on common areas and a lack of financial record sharing. Homeowners also claim that promised features like hiking trails, kayak access, a clubhouse, and a saltwater pool were never built, despite being part of the sales pitch.