Hatfield Township News – THP Westport Farms Development Information

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Hatfield Township
1950 School Road
Hatfield PA 19440-1992
Tel 215-855-0900
Fax: 215-855-0243
hatfield@hatfieldtownship.org

Westport Farms &
THP Bankruptcy Information
Last update: March 10, 2011

The township holds a surety bond on the T.H. Properties development, Westport Farms, to assure that public improvements will be made. Because the development is incomplete and because T.H. Properties declared bankruptcy on April 30, 2009, Hatfield Township has started the legal process to draw down on the bond.

As we work through the legal process, the Board of Commissioners and staff thank you for your patience and understanding of our limitations. As more information becomes available and confirmed we will provide it on this Web page.

Summer 2010:

Hatfield Township continues to pursue all legal remedies to require Lexon Insurance Company to remit payment of the surety bond for Westport Farm. Staff will keep the Westport Farm HOA Board informed of our legal process, and you may follow the timeline/progress under the Recent/Upcoming Activity section.

May 2010:

Township Pursing Legal Action to Secure Public Improvements for Westport Farms
Public Meeting: Monday, May 24, 2010 at 7 p.m.
Hatfield Township Municipal Building

Following an unexpected denial of almost 80% of the public improvements claimed, Hatfield Township will be pursuing litigation against Lexon Insurance to fulfill its obligation on the surety bond on Westport Farms starting on May 17, 2010.

Residents are invited to attend a public meeting at the Hatfield Township Municipal Building on Monday, May 24, 2010 at 7 p.m. Staff will provide a detailed explanation of the most recent events and litigation process we plan to follow, and answer questions from residents.

Unexpected Response after 7 Months of Productive Work
The denial of approximately 80% of the public improvements claim was completely unexpected and contradicted the progress Hatfield Township staff and Lexon Insurance, and its representatives, had made over the past 7 months.

From April to mid-May, Lexon Insurance discussed the feasibility of reducing the quantity of landscaping documented in the public improvements, as an attempt to reduce their obligations. In order to reach a fast and favorable outcome for Westport Farms residents, the township was willing to listen to an offer, if it meant releasing the funds to start improvements.

The counter offer, which denied almost 80% of the public improvements, would adversely affect the improvements noted in the land development plan, and was therefore unacceptable. Having also still not received a release of funds, the township’s best course of action was to pursue litigation.

Residents interested in finding out more are strongly encouraged to attend the public meeting on May 24.

Spring 2010:

Hatfield Township staff continues to work with its solicitor and the legal counsel of Harris Beach, the firm representing Lexon Insurance, to formally release the bond for public improvements. The goal to complete the public improvements in 2010 is still in place, and a final document confirming specific public improvements with Lexon Insurance has not yet been achieved. Township staff is hopeful within the coming weeks to have a confirmed list of public improvements and provide more tangible dates to the Westport Farm community.

Public Improvements as Weather Permits
Public improvements can begin as soon as there is a signed agreement with Lexon Insurance. We will post that document, which will outline the specific improvements, once it is available. If weather is favorable before the spring, we will complete as much work as possible early.

Lexon Insurance will work with the Township and CKS Engineers to competitively bid the remaining work and Lexon will pay the contractor directly. The township engineer still has oversight and approval authority to deem work completed properly.

Recent/Upcoming Activity

February 23, 2011:Commonwealth Court issues order for Elroy Road roadway improvements
October 7, 2010: Appeal Hearing on Preliminary Injunction Order. Thurs Oct 14, 2010 at 9:30 AM in Courtroom 1, 1339 Chestnut Street (Widener Building), 9th Floor, Philadelphia, PA
August 16, 2010: Commonwealth Court grants expedited hearing on appeal; Oral arguments to be held week of Oct 12th.
July 7, 2010: Township sends Press Release out to media.
July 1, 2010: Lexon Insurance files appeal to Commonwealth Court against Judge Page's June 25, 2010 Order.
June 25, 2010: Judge Page awards $521,538.86 in Preliminary Injunction Order to Hatfield Township.
June 17, 2010, 2:00pm: Court Hearing VS Lexon. Norristown, PA: Courtroom #2
May 24, 2010, 7:00pm: Township staff held a town hall meeting with Westport Farm residents. Click here to read The Reporter’s article summarizing the meeting.
Feb-April 2010: Township continues to work within legal channels to receive formal release of bond and move forward with bidding public improvements.
December 1, 2009: Township meets with Lexon Insurance to discuss the public improvements on the surety bond.
September 10, 2009: Stay on the surety bonds is lifted.
July 30, 2009: Court order provides THP an additional 45-day stay on the surety bonds.
June 12, 2009: THP returns to work on select homes. Read the article on thereporteronline.com.
June 8, 2009: Township staff to attend Westport Farms Homeowners Association meeting at 7 p.m. at the Hatfield Township Municipal Building.
June 2, 2009: Court order provides THP a 60-day stay on the surety bonds.
May 29, 2009: Letter from Hatfield Township sent to Westport Farm residents.
May 28, 2009: Informational Web page posted by Hatfield Township.
May 21, 2009: THP received the township notice stating THP is in default.
May 18, 2009: Hatfield Township notified THP that they find them in default.
April 30, 2009: THP declared bankruptcy.

Additional Questions?

If you have additional questions, please contact the Westport Farms Homeowners Association or the township at 215-855-0900 or hatfield@hatfieldtownship.org.

Documents

Hot Topics & Answers

Stay on Surety Bonds: What does a stay mean for our development?

The Bankruptcy Court has provided THP with 2 Preliminary Injunctions Staying Bond Claims, one on June 2 for 60 days and one on July 30 for 45 days.

For Hatfield Township, and other townships and entities, these stays restrain us from pursing enforcement actions to access the surety bonds. This means Hatfield Township (and other municipalities and entities) must continue to wait for either THP to make public improvements or the stay to end allowing the township to pursue surety bonds.

The July 30 Court Order, viewable under documents, called for a continued hearing on September 10, 2009.

Surety Bond: What is it and what does it cover?

A surety bond is a type of insurance that covers the cost of public improvements in the event that the developer doesn't complete the public improvements agreed upon. The bond for the Westport Farms development is valued at slightly over $1.2 million.

The homeowners association is not responsible for any shortfalls, but no shortfalls are anticipated either.

Unfinished items that would be covered under this bond include:

the top layer of the roadway,
basins,
final landscaping of public land,
public trails, and
grading for stormwater management.

Existing Landscaping: Can I remove dead or dying trees or shrubs myself?

No, please leave initial plantings installed by THP for now. The township is working with an engineer to determine which public improvements and plantings are incomplete. Leaving the initial plantings in place will help us with this process. Once we have noted all deficiencies, we will update this answer and notify homeowners that they can remove plants and shrubs.

April 2010 UPDATE: The engineer has completed the final punch list of items, and that document shall be the guide for public improvements moving forward. Homeowners may make personal changes to landscaping on their property should they decide to move forward prior to completion of public improvements.

Personal Property Improvements: Does the bond cover my driveway and lawn seeding?

No, driveways and seeding are not included with the public improvements covered by the bond.

Lawns aren’t usually seeded until grading is complete in a particular section. Use & Occupancy Permits are often issued before seeding as long as the base roadway has been constructed, which it was. The Use & Occupancy Permits that were issued at your settlement are final and valid, however the grading inspections were stamped temporary to allow for final improvements to the overall stormwater grading for the development.

No Set Timeframe: When will these improvements be made?

Hatfield Township cannot make any promises on a timeframe for making public improvements in Westport Farms.

Although the township has a surety bond to complete the public improvements, we must follow a defined legal process to draw down on the bond. We ask for your patience as we work through this process.

The first step in the process was taken on May 18, 2009, when Hatfield Township declared that THP is in default for not completing the public improvements. Receipt of this notice was confirmed on May 21, 2009.

After Hatfield Township receives an answer from THP that they will not complete the improvements, we must wait to see if the insurance company that holds the bond will handle the improvements themselves or provide the township with the funds to complete the improvements.

If we must access the bond, we will follow a process similar to an insurance claim. The township will need to address questions posed by the bonding company during this process.

Permits for Home Improvements: Can I still put in my fence/pool/deck/shed/etc.?

Yes, you may make improvements to your home as long as you secure the appropriate permits from the township. However, we advise against these improvements until the final grading and stormwater management improvements have been completed to avoid having to make costly changes. In addition, conditional language will be added to all permits for Westport Farms properties for improvements such as fences, pools, decks, sheds, and other items.

The conditional language:

By accepting this permit, the homeowner hereby acknowledges and agrees that the final grading and storm water management of the Westport Farms development is not complete, and that any work done under this permit shall be at the homeowner's own risk. It shall be a condition of this permit that if it becomes necessary to perform grading or other storm water management work on any property on which any structures or improvements are erected or situated pursuant to this permit, and if such structures or improvements are located on the area on which such grading and/or storm water management work must be performed, the homeowner shall remove the structures or improvements at the homeowner’s sole cost and expense within 48 hours of receiving notice from the Township to do so. If homeowner fails to so remove said structures or improvements, the Township may remove said structures or improvements and the cost of doing so shall be paid by the homeowner to the Township promptly upon invoice therefore. It is a further condition of this permit that the homeowner shall hold the Township harmless, indemnify and defend the Township for any damage caused by the Township to homeowner’s real or personal property during the removal of any structures or improvements erected or situated pursuant to this permit if the homeowner has failed to remove said structures or improvements pursuant to notice as stated above.

Snow Plowing: Will my roads be plowed if the top layer hasn’t been paved yet?

A road is not considered public, and therefore not part of the township’s plow routes, until the top layer is complete and the township accepts the developer’s dedication of the road as public property. However, we will work with the Homeowners Association to resolve this matter. As we get closer to snow season, we will be able to make a more informed decision.