One of my virtual friends online, GCharlotte, was kind enough to give me a tour of the Register of Deeds office, located within walking distance of a place I was already familiar with, the Mecklenburg County Courthouse. The day started with a tasty albeit greasy lunch at Showmars, which I learned is located in the Government Center. Then it was off to the ROD office, and then a quick check at the courthouse to see if there were any updates.
The ROD tour was educational in that I learned that there are a lot of quality control steps that come into play before we finally can view the Deed information online. I also was also introduced to the head of the office, who like all the employees there, appeared very knowledgeable and was very friendly and open. I got the sense they are ready, willing, and able to process Deeds for the Vue Charlotte and that they were glad the building was actually constructed versus some of these other projects that never got off the ground due to the downturn.
It was also during this meeting with GCharlotte that I learned about a publication I have never heard of before, called the Mecklenburg Times. This paper, which you have to subscribe to online to get to most of its content, is mainly one devoted to posting Public Notices: Auctions, Foreclosures, Corporate Dissolutions, and so on. I was handed 2 copies of the times, provided the compliments of Constance B, who works in the office and was gracious enough to provide them. I want to thank her for doing so, especially since one of them had a full-page article devoted to the Vue and the lawsuits and had some very insightful paragraphs. Tara Ramsey wrote the article in the December 28 edition entitled: Litigation involving Condo Project Seen as Sign of the Times. There are comments by a local real estate attorney that said in the past, developers would have simply kept the deposits and moved on to the next buyer, but in this economy, that is not as easy to do given that there are few buyers to step in. Suing buyers would have been “rare.”
This is key for all pre-sales buyers. Because the common practice was to keep the deposits and go on to the next buyer, we don’t have years and years of precedents involving lawsuits enforcing specific performance for real estate. I think that is why these lawsuits will be paving new ground.
The article also quotes the lawyer saying the Vue is trying to set an example of these 4 buyers to “head off a stampede.” This is perfectly understandable. If I were the Vue Developer I might do the same thing. The only problem is that if we look at the closings so far, we can safely assume the stampede came and left.
In this article all 4 buyers that were sued are named along with their deposit amounts, and none commented for the article. When I went to the courthouse, there were no updates on any of these 4 cases. A couple of them had law firms that were engaged that asked for and received extensions to respond till the end of January. It will be interesting to see what those responses are.
The lawyer who is quoted in this article makes a statement that we have repeatedly mentioned in this blog: “Who would want to buy something that has a purchase price above its fair market value?” This is the Catch-22 the Vue sales team is in. They know they have a product to sell that is overpriced. While they may have lots of activity/showings based upon feedback from people who live there, they don’t have but one closing so far that is not a pre-sales buyer. And the fact is they won’t achieve any sales volume until prices come down.
Prices can’t come down apparently until all the pre-sales buyers have been accounted for. In a written response to the reporter’s request for a comment, the Vue writes that they “regret that they have been forced to pursue legal remedies…” I do believe that is a true statement. While I have repeatedly called and hoped for no lawsuits, both the sellers and the buyers have to go with what they see as their best options. And those options are appearing more and more to be legal ones.
The article then goes on to discuss the Celadon case, where the buyer was sued for specific performance and lost. The article hints that the law is leaning towards the Developer based upon this case. But the lawyer says the following that all pre-sales buyers need to understand: “In the Celadon case, they had a specific performance requirement and they enforced it.” The Vue Charlotte contract is not as clear-cut on this. And that is why until these lawsuits are resolved, I don’t think the stampede will be coming back any time soon.
Comments? Please write to Vuebuyer10@yahoo.com.