Anyone have any idea?  I am really curious what happens to the community if people are already living there.  I have been reading a lot of stories of builders that bought land and started the process of developing a community and then filed bankruptcy and the community now just sits vacant with the land cleared with the roads put in, but nothing else was started.  But what happens if it's already been started and people are living there?

So what happens then if people are already living in the community that never gets finished?  Say they were supposed to build 200 homes, but only a handful were built and have people living in them.  Do those handful of people have to now pay higher HOA fees because no other homes built that should have been built?  What if they can't get another builder to finish the community?  Do the people that live there eventually end up having to move or lose their homes because of this?

Has anyone ever seen anything like this happen where a community was started and people were living in it and the builder was unable to complete it?

 

6 Comments on What happens if a builder goes belly-up while building a community?

NOV
10
2007
200,847 Points 11 Featured Posts
I have not seen anything like this yet and I hope I never do, that is pretty scary.
1:48am • #1
374,454 Points 3 Featured Posts Outside Blog
Guess nobody else has either....
5:40pm • #2
NOV
11
2007
1,929,886 Points 155 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

This can actually happen in condo conversions also. This is why in a condo conversion there is what is called a non-warrantable title until 51% are owned by other people than the builder. What usually happens in new construction though is the value drops because things like pools, play structures and parks are the last to be built that are part of the over all livability of the community.
2:34am • #3
NOV
16
2007
240,429 Points 2 Featured Posts Outside Blog Attended Rain Camp

I have heard of the HOA being turned over to the homeowners in that community, until more are resold then the revote and establish the HOA / management etc. 

Usually other builder down the line will pick up the last ones pieces.. providing it's not a total mess...

OR it would could auctioned off by the bank, resold at a discount price, etc

Many times it may even depends on what bylaws and deed restrictions that builder intially set up...

12:48am • #4
NOV
23
2007
1,929,886 Points 155 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Becky,

I just read another blog from Florida that the cities are going after these abandoned properties, trying to get them for eye sores and for tax liens. Should be interesting to see what happens down your way.
12:04am • #5
374,454 Points 3 Featured Posts Outside Blog
Yes Todd it should be!
11:43am • #6

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Becky Troutt

Bradenton, FL

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Reynolds Realty of Manatee Inc

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