Judge orders demolition of nearly $2.2 million duplex after builder violated HOA rules

FISHERS, Ind. — A tumultuous monthslong legal fight has been underway between a local builder and a homeowners association on the banks of the Geist Reservoir. Right before Thanksgiving, a Hamilton County judge sided with the WatersEdge Owners’ Association and ordered MHM Investment Group to demolish a multimillion-dollar waterfront duplex.

“Unfortunately, the (tenants) are caught in the middle of it,” said Harold Warden, president of the HOA.

Warden says the building was basically too wide after the builder did not follow the community’s setback rules. He tells 13 Investigates he noticed the problem almost immediately in the fall of 2023 after the foundation was poured.

“It was obvious that it was not in compliance,” Warden said. “We contacted the builder, asked to meet him on site at the time and see what the heck was going on (and) if we could get it taken care of.”

Michael Mercho is the builder in question. He owns MHM Investment and also works for Integra Builders, a family business based in Fishers.

In an email to 13 Investigates, Michael Mercho stated, “We did not simply choose to ignore the rules. We followed the rules that we believe—and that state law suggests—matter most.”

This is a fight over the setback. When Michael Mercho first bought the property in question, the HOA required 15 feet between homes. However, it now requires at least a 20-foot space between homes and building to be constructed 15 feet from the property line.

Michael Mercho wanted to follow the City of Fishers’ setback instead, which is in line with the old HOA rules.

“We viewed it as we had a contract with the HOA and the community to build under certain conditions, and those conditions were changed,” said Tarek Mercho, the builder’s attorney. “I don’t think any builder can foresee that type of change down the road, especially after building six or seven buildings.”

After months of back and forth, the builder sued both the HOA and Warden in April 2024.

“We were a little taken aback when he filed a lawsuit against the homeowners association and me personally,” Warden said. “We didn’t want to do the cost of litigation … We took it as him just trying to bully his way through the process, to push us to the side.”

“We decided to stand our ground,” Tarek Mercho said.

On Nov. 24, the builder learned the move backfired when Hamilton County Judge David Najjar sided with the HOA.

Najjar ordered the builder to pay $70,474.09 in fees and expenses and wrote “the only way to serve the public interest is to uphold” the HOA’s rules and require the company to “remove the homes.”

Demolition of the duplex worth nearly $2.2 million could take place as early as February.

The HOA’s attorney Peter Kovacs and Tarek Mercho both agreed the decision was unusual.

“It’s extremely rare,” Tarek Mercho said.

The judge also wrote “the harm” to the builder is “almost entirely self-inflicted” and could have been “avoided.” The company chose to keep building despite the lawsuit and the court’s warning that demolition was possible.

“I can’t think of a rational reason economically for a builder to take that kind of … risk,” Kovacs said.

The builder’s attorney says the decision was a strategic move for a small business.

“This is not some institutional, large builder that we’re talking about,” Tarek Mercho said. “Just simply leaving that work unfinished for the amount of time that it could take also wasn’t feasible. Something had to happen.”

Not only was the duplex built, but court documents state the two units were “sold on contract to two tenants.” That means two families are currently living in the homes.

13 Investigates asked the builder’s attorney if the families knew the homes could be demolished.

“They knew of the litigation,” Tarek Mercho said. “I don’t think anybody thought that this was where we would end up.”

13 Investigates made contact with one of the tenants, but the person decided not to comment.

The judge acknowledged the severity of his order and stated he made it in part because the builder failed to follow the HOA’s rules in the past. Najjar wrote, “The Court also finds that if the Declaration is not enforced and the building on Lot 11 is not made to conform, there is no way to ensure that further violations will not occur.”

MHM Investment Group owns one final plot, also on the waterfront and right next to the potentially doomed duplex.

With the families in mind, the judge hinted destruction could be avoided if the two sides could reach an agreement.

Both sides said they were open to negotiating but voiced skepticism that the other side would be reasonable.

“Based on the builder’s current actions, I don’t know,” Warden said. “I think the judge built in some time, hoping that the parties could find a resolution, but it’s going to be on the builder, quite honestly. We’ve been trying to find a resolution on our side since day one.”

The builder has 30 days after the ruling date to file an appeal.

“We have no choice but to take this case as far as it needs to go to get a just result,” Tarek Mercho said.

In an email, Michael Mercho wrote, “We are appealing not just to save a building, but to clarify a legal principle that protects every property owner in Indiana: that your land rights are defined by public law and recorded plats, not just the shifting opinions of a private committee.”

The builder indicated he was willing to take the case all the way to the Indiana Supreme Court if necessary.

While some may see this exchange as an example of an HOA having too much power, Sam Lash disagrees. He lives in the WatersEdge community and says his waterfront view is impacted by the duplex, so he wants it demolished.

“I feel bad for the people who live there, but it obviously would give us a better view,” Lash said. “So that would be my hope.”

Lash worries that the reduced view will reduce his property’s value.