Henderson County withholds $1.7M performance bond, opens legal action after Lake Towns subdivision left incomplete

Henderson County Commissioners Court voted unanimously to refuse release of a performance bond tied to the Lake Towns at Lake Palestine subdivision and to pursue legal action if the developer does not cure identified defects within a 60-day period.

Mr. Strong, the county attorney, told the court the county’s engineer found the subdivision’s required infrastructure incomplete and recommended the county keep the bond active rather than release funds. The bond securing the unfinished improvements is being held by the district clerk and is reported as about $1.7 million; the court authorized sending the developer a 60-day cure notice and exploring legal representation to collect or use the bond if defects remain.

Why it matters: dozens of lots were pre-sold before required infrastructure was completed, leaving lot buyers without road access or completed utilities. Commissioners described the situation as a direct consequence of recent statutory changes that allow final plats and pre-sales before infrastructure is finished, and they cautioned the county lacks the equipment and manpower to finish a large subdivision project itself.

Court discussion and legal options The county attorney said the final plat was approved in September 2024 with a 12-month construction period that expired in September 2025. After the county engineer’s on-site assessment found deficiencies, officials revoked a separate letter of credit and filed against the performance bond. Mr. Strong told commissioners the county could hold and use bond proceeds consistent with attorney-general guidance but that multiple pending lawsuits, a bankruptcy stay involving the developer, and existing litigation among parties complicate immediate remedies.

A 60-day cure window was described as the next procedural step; if the developer does not correct defects within that period, the county intends to seek collection on the bond and may contract out completion work or pursue court remedies.

Buyer testimony Scott Meyers, who identified himself as a purchaser of a $300,000 lot in Lake Towns, told the court he and his wife used life savings to buy the property and have experienced financial and emotional harm. “We bought a $300,000 lot ... for us it’s basically all of our life savings,” Meyers said, describing litigation delays and restricted access because of the developer’s bankruptcy.

The court’s action Commissioner Richardson moved and Commissioner Spivey seconded a motion to keep the performance bond (CNB-4374200) active, authorize the county judge to send notice of the action, and pursue legal help as needed. The motion passed unanimously.

What happens next County staff and counsel will issue the 60-day cure letter to the principal on the bond and start preparing for potential civil action. Commissioners said options include using bond proceeds to finish improvements, negotiating with purchasers, cancelling or reconfiguring the plat, or pursuing collection through the courts; several pathways will require additional legal review and possible involvement of the district and federal courts.

Clarifying details and context - Number of lots pre-sold: approximately 29 lots were sold before infrastructure was completed. - Total lots in plat: the subdivision was described as roughly 200 lots. - Bond amount: county attorney stated the security bond is in the neighborhood of $1.7 million (reported in court materials as $1,758,936, approximately). - Cure deadline: a 60-day cure window was described (the county attorney cited an example deadline of August 8 if a 60-day cure period is applied).

The court made no decision to expend county funds at this session; instead it preserved bond security and authorized steps toward legal enforcement and notification to involved parties. The court emphasized the potential need for litigation given multiple existing suits and the developer’s bankruptcy status.