BUILDER AGREEMENTS GONE BAD
In August of 2015, Delaire must have been giddy when one builder/renovator signed builder agreements for three (3) homes in one month. As icing on the cake, he bought another home just 4 months later in December, 2015. Our story will tell you how these projects have fared. As you will see, there is little resemblance to the TV series Flip or Flop. This is more a case of FLOP, FLOP, FLOP and FLOP. Sadly, these flops don’t just hurt the builder, but also every mandatory member at Delaire. The first home we will tell you about is at 16862 Rose Apple Drive. The developer used an LLC titled 16862 Rose Apple to acquire the property. If you click here you can see pictures of its current state. On June 13, 2017, it was actually listed for sale at $850,000. The listing was removed two months later on October 19. A Uniform Final Judgment of Foreclosure, in the amount of $779,000 was ordered on November 2, 2017. The lender ended up taking the property back in December, 2017. It remains in the same unfinished state and is not listed for sale.
What is the financial impact on Delaire Country Club and its members?
These five failed projects will likely cost the club $500,000!
A fifth problem home has been brought to our attention and has been added to the below chart as of 7/14/18.
When a builder’s agreement was executed in 2015, the builder was obligated to only pay a fee of $750 per month for the first 24 months of the agreement. After that, full dues and assessments were due until such time as a full equity member bought the home. Of the $9000 a year paid during the first two years, $4000 goes to the POA for their annual assessment. So the club is only getting $5000, which means a discount on club dues of approximately $25,000 per year. In this instance, the Club has lost $50,000 in discounted dues plus a full year’s dues or about $30,000 for a total of 80K so far. No more club dues are owed while the owner in foreclosure holds the deed. Given the current state of the home, Delaire would no doubt sign another builders agreement in order to get it renovated or demolished and a new home erected. This would only add another $50,000 to the first $80,000 for a whopping total of $130,000. When the owner of the home died and the home was put up for sale, it was a full dues paying home. Delaire should not be in the business of subsidizing builders & sellers. This is not the first time this has happened.
These agreements are in violation of the
Amended Declaration of Covenants and Restrictions.
We will update you on the other three homes this particular builder bought in 2015. Only one is currently for sale and the other two are in a state of disrepair we are told. The one that is for sale is 16852 Silver Oak Circle. A Final Judgment of Foreclosure was ordered in April for $378,000. It appears that HMC Assets LLC took possession on June 27, 2018.
Stay tuned to Delaire Governance for the real truth.
No FAKE NEWS here.