When real estate deals are made in Melbourne, Florida, buyers and sellers alike hope that everyone involved will honorably live up to the terms of their deal. They also hope that their deal was based on accurate information in the first place. If it was not, there is a basis for real estate litigation.
That is the case for residents of a senior community who are suing the developer of their community, which has been planning on selling the residents the community pools, clubhouse, and tennis courts for over $73 million. The residents, who are homeowners, realized that the property was only worth about a quarter of that price after consulting with a certified appraiser and attorneys. The residents have now filed lawsuits in Polk County Circuit Court.
Because the litigation is pending, the developer has declined to comment to the media. However, their correspondence with the residents states that the deal includes $11 million dedicated to renovating and building amenities. It also says that residents, instead of paying monthly charges as they had in the past, would instead pay a capped annual fee. The developer, who originally wanted to complete the sale last year, has recently communicated hopes to finalize it this year.
According to Florida law, developers are required to give homeowners full control of their homeowners association three months after the sale of 90 percent of the homes. The developer in this case, according to SEC filings, is seeking to sell the community assets now, with only about 75 percent of the community’s lots having been sold to residents so far.
The residents have been worried that the developer might sell the community’s recreational facilities, like the pools, clubhouse, and tennis courts, to an outside party. That would result in residents losing control over those facilities. For that reason, they put together the deal to buy the facilities, and are now suing as they believe that the price does not correspond to the value. This case illustrates that buyers as well as sellers have a right to accurate information and can sue if they do not receive it.
Source: Orlando Sentinel, “Solivita residents sue developer AV Homes,” Mary Shanklin, June 13, 2017