By all accounts Dorchester Estates in Ocala Florida was going to be a beautiful estate home community.
People bought 1 acre estates using Construction to Permanent loans.Simply put the lenders touted these type of loans because the advantage of this loan is there's only one loan application and one loan closing.
The idea is that the lender finances the construction of your home, and when it's ready for occupancy, the loan is converted from a construction loan to a mortgage.
There is one slight problem.
The Builder was arrested and sent back to the United Kingdom,leaving many of these homeowners with unfinished homes.
These people have a huge problem to deal with.Since they own the land they must continue to pay the lenders on the C/P loan,but without a complete home,it`s impossible to receive a "Certificate of Occupancy".
Interestingly enough the builder was thrown in jail and for awhile was actually running his business inside of jail.
In Florida a contractor, technically, may run a business from outside the state.
I received a call from another Realtor on Friday seeking to give us a referral. Never one to turn down a referral I asked the Realtor to send me the information so I may proceed to do the due diligence on the property.
The Realtor explained his client was having serious problems locating a Realtor who could assist them.
They needed to sell their home which was 85% complete.For the record you can`t sell a home you don`t own, nor can we as Realtors list a home on the MLS that way.
Builders across the country are facing similar problems.With funds depleted they`re unable to complete these homes.
Three years ago C/P loans were used to advance the builders the funds in hopes they close within a 6-8 month time frame. Many reputable builders did just that, others decided to "Take the money" and run!
In the case of Dorchester Estates, these homes were selling in the $300`s.
The builder is deported, the liens from the sub contractors are piling up and those who own the land need to seek an attorney,not a Realtor to list and sell them.
Back to the referral i was given. When I spoke to the Realtor about this morass of legal issues that are involved he seemed indifferent.
His response was typical of many in our industry who "Never Understand we are licensed and must follow the laws."
"Yeah,Yeah i know all about it,but we need to get the BUZZ OUT", he explained.
"Get the Buzz out of What" i asked him, your client will never be able to sell this property now or in the next 10 years!
For additional information please refer to :
The Florida law that governs contractors is F.S. 489.1195, which is available at www.myfloridalicense.com. Click division, then construction and then statutes.The DBPR's Florida Homeowners Construction Recovery Fund is available as a fund of last resort for a person who suffers monetary damages because of financial mismanagement or misconduct of a contractor and who has exhausted all other resources of payment. Information about that fund is available at www.myfloridalicense.com/
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