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Johnsburg sues bank over unfinished development

Published: Friday, Aug. 1, 2014 11:37 p.m. CDT
(Kyle Grillot -
For years, Michelle Malueg was the only resident of Whispering Ridge subdivision in Johnsburg. Avery Malueg, 10, (from left) Emily Gross, 4, Michelle Malueg, and Baeleigh Gross, 6, gather in front of Malueg's home Thursday in Johnsburg. The village of Johnsburg filed a lawsuit against State Bank Thursday for failing to complete the infrastructure improvements in the Whispering Ridge subdivision. The bank took ownership of the property in 2009.

JOHNSBURG – The Malueg family moved into the Whispering Ridge subdivision five years ago – and got their first neighbors three years later.

Mike and Michelle Malueg moved their family into the brand-new subdivision in December 2009, about the same time the developer, Saylor and Sons, turned the remaining lots over to State Bank in lieu of foreclosure, according to Michelle Malueg and a letter sent to the family from the bank in April.

Since then, the 75-acre development off Chapel Hill Road has mostly sat in limbo, its roads and landscaping unfinished and most of the remaining lots vacant. One house went up about two years ago and three more are in the works.

“It hasn’t been horrible,” Michelle Malueg said. “It’s not anyone’s fault that the economy tanked and no one wanted to build houses.”

But this year, the bank sold off the rest of the lots, some to people who intend to build a home they will live in and others who intend to resell, Malueg said.

The remaining outlots it will transfer to the newly minted homeowners association, officially established within the past couple week with Mike Malueg as its president.

The association will be responsible for mowing the common areas and plowing in the winter, something the bank has been taking care of for the past five years, according to the letter.

But the village of Johnsburg is arguing that State Bank’s responsibility isn’t over.

In a complaint filed Thursday, the village argued that when the bank took ownership of the development, it also took on the developer’s obligations, which include putting the final grade on the roads and completing the landscaping, according to a news release from the village.

“State Bank’s refusal to complete the improvements is an effort to place the cost burden squarely on the residents of Johnsburg, which is completely unacceptable,” village President Ed Hettermann said in the release.

Village Administrator Claudett Peters and village attorney Rich Flood were unavailable for comment Friday. The complaint was also not available through the McHenry County Circuit Clerk’s Office.

Due to this, the Northwest Herald was unable to get a hold of State Bank.

Hettermann said the legal action came after several attempts by the village to handle the issue out of court.

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