Diamondhead homeowners hit with $1,200 pool assessment as the fight over who runs the POA heads to a jury

HOT SPRINGS, Ark. — The developer-controlled property owners’ association at Diamondhead has told its roughly 800 dues-paying households they each owe $1,200 for a new swimming pool and pool house, on top of a dues increase next year, while the jury trial that will decide whether the developer legally runs the association is still almost four months away.

The one-time assessment was announced by the association’s new general manager, Todd Finley, who told The Sentinel-Record the money will go toward either renovating the community’s 50-year-old pool or building a new one closer to the clubhouse and golf course, whichever bid comes back cheaper. Residents can spread the $1,200 over 12 or 24 months, with a $200 discount for paying in full by the due date, the newspaper reported.

That comes on top of a $140 increase in annual dues starting next year, which the association says is needed to catch up on decades of deferred maintenance and to pay for round-the-clock security. Finley put the long-term bill for roads, the main entrance and rights of way at $25 million to $30 million over the next decade, according to the newspaper.

Homes in Diamondhead currently pay $1,300 a year. The developer’s roughly 1,400 lots pay nothing.

As we reported in July, the Lake Catherine golf community has spent two years in a fight over who runs it. Developer Mark Lane took full control of the association’s board at a Memorial Day weekend meeting in 2024 by casting one vote for each of the lots his company owns. A group of residents sued to undo that vote, then turned Diamondhead into an actual city. The association and Lane’s company, Omni Home Builders, sued the city back, calling it a “shadow POA.”

A board of two

Residents at a Sept. 17 town hall at Diamondhead Community Church said they have no one representing them on the association’s board and questioned whether the money would actually be spent on a pool, the Sentinel-Record reported. One resident told the paper every decision now comes from two people. Roger Devore, who chaired the association’s finance committee before the 2024 takeover, warned neighbors to be careful about paying in full to get the discount.

Finley told the newspaper the board isn’t holding formal meetings until the lawsuits are over, and that minutes of discussions among him, Lane and treasurer John Harrison are available to residents who ask. He said he has nothing to hide and pays dues like everyone else.

Finley, a Diamondhead resident, was hired this summer after running the golf operation. Lane referred the newspaper’s questions to the association’s attorney.

The $66,765.99 question

Court filings since our last story show how the residents’ lawsuit has narrowed to one issue: the money Lane paid to make his lots eligible to vote, and what happened to it afterward.

Under the association’s bylaws, developer lots don’t pay dues and don’t vote unless the developer designates them as dues-paying and actually pays. In the weeks before the May 25, 2024 meeting, a Lane company called Global Impact Marketing wrote three checks to the association totaling $66,765.99, which the association treated as one month’s dues on 1,400 lots. Lane then voted those 1,400 lots to replace the bylaws and put himself in charge. Three days later, according to bank records the residents obtained in discovery, the association sent the $66,765.99 back to Lane’s company.

Both sides asked Circuit Judge Ralph Ohm to rule for them without a trial. In a May 5 order he refused, writing that whether that payment was made in good faith is “not only one of these material facts in issue but also the crux of the entire case,” and that “an obvious argument could be made that this payment was made in bad faith” because dues money meant for roads and salaries was immediately refunded instead. That is a question for a jury, he said.

The order also notes the residents’ claim that Lane is still drawing $10,000 a month from association dues. The association’s own lawyers acknowledged that payment in a filing last week in the city case, describing it as compensation for Lane’s “services in marketing the community.”

Residents ask for a receiver

In June the residents asked Ohm to appoint a receiver to take over the association’s books and bank accounts until the case is decided, or, failing that, to reinstate the 2022 power-sharing board of four resident seats, four developer seats and one jointly chosen member. The motion says Lane admitted in a November 2025 deposition that no road repairs have been made since he took over, that he plans to spend more on marketing to sell his lots, and that he wants to drop the Diamondhead name entirely.

The association opposed the receivership in July, and the hearing on it, originally set for Oct. 1, was pushed back by agreement so the two sides could try mediation first. Under a scheduling order Ohm signed Sept. 24, mediation was due by Oct. 3 and discovery closes Oct. 5. No new hearing date has been set.

The residents also filed a fourth amended complaint Sept. 28 that adds formal claims against Lane and Omni for misappropriating association funds and acting in bad faith, built on the $66,765.99 refund and the monthly $10,000. The association wants those counts thrown out, arguing in a Sept. 21 filing that any money taken from the association is the association’s injury, not the individual residents’, so only the association itself could sue over it. Its answer also says the residents have been given financial records and that the association is “in a stronger position now than two years ago.”

A five-day jury trial is set for Jan. 25-29, 2027, with a pretrial hearing Dec. 15.

Goodbye, Diamondhead?

The name change the residents warned about is already underway. The association has rebranded itself River Bend at Lake Catherine. Its website now carries the new name on every page, and Finley told the Sentinel-Record the rebrand is part of a 20-page marketing plan meant to put to rest negative attitudes about the community.

The new name has already made it into court. In the city case, the association filed a Sept. 28 email from a Hot Springs home designer, Jason Barnett, addressed to Lane and complaining that builders in “River Bend at Lake Catherine” now have to get plans approved and pay fees twice, once to the association’s architectural committee and again to the city.

The city case

The association’s lawsuit against the City of Diamondhead is assigned to a different judge, Lynn Williams, and the city wants it put on ice. On Sept. 15 the Arkansas Municipal League, which represents the city, asked Williams to stay the case until the residents’ trial is over, arguing that the January verdict will decide whether the current board even has the authority to sue, and that two judges ruling separately on the same facts risks conflicting decisions.

The association answered Sept. 30 that the two cases involve different parties and different questions, and that waiting would leave it staring down “imminent harm.” It points to a city ordinance, 2025-008, that lets the city clear vegetation and debris from private property and bill the owner, to a new city zoning and permitting code, and to the duplicate building reviews. The association’s lawyer, Hank Felton, wrote Williams on Oct. 1 asking for a hearing. The judge hasn’t ruled.

In the meantime, the two governments keep pulling apart. The Sentinel-Record reported that the city stopped its contract security provider from patrolling inside association-controlled areas after Lane asserted that the 50-year-old subdivision rules give the developer control of the roads. The association has hired its own employee to observe and report, Finley said, with around-the-clock coverage expected later this fall.

This story is based on filings in Garland County Circuit Court cases 26CV-24-657 and 26CV-25-1294 through Oct. 2, 2026, and on reporting by The Sentinel-Record.