Diamondhead Country Club and Property Owners Association, Inc. v. The Peoples BankAnnotate this Case
The issue this case presented for the Mississippi Supreme Court's review centered on whether a purchaser of real property out of foreclosure was automatically assigned and thereby entitled to the developer’s exemption from assessments on the lots previously owned by the developer. Diamondhead Country Club and Property Owner’s Association (DPOA) contends that the foreclosing purchaser, Peoples Bank, is not automatically granted an assignment of the developer’s personal rights (i.e., the exemption from Property Owner Association (POA) Assessments) in addition to property rights and that the developing company did not expressly assign this exemption to the lender/foreclosing purchaser; therefore, the lender/foreclosing purchaser does not enjoy the exemption. The Supreme Court concluded the covenants provided that the developer’s exemption would be eliminated by conveyance of the property to a third party. Therefore, the exemption was a personal right requiring assignment to Peoples. A 2008 deed of trust conveyed both the real property rights and personal rights of the developer, but the 2012 deed of trust was void of any language granting the developer's right of exemption to Peoples. Therefore, the Court determined Peoples was entitled to the exemption from paying assessments in connection with the Glen Eagle lots, but it was liable for assessments levied on the Diamondhead lots. As to the Glen Eagle lots, the Supreme Court affirmed; the Court reversed and remanded as to the Diamondhead lots.