It seems out of nowhere, both the Charlotte Observer and the Charlotte Business Journal wrote blockbuster and enlightening articles about the Berkovich case and the potential consequences of the court decision. In both papers, it is a front page top-of-fold story. Wow, the Vue doesn’t get any better than this!
Both reporters, Susan Stabley and Kerry Hall Singe, present a fair and comprehensive story about what this decision could mean and where MCL and the Vue stand on the matter. I have yet to talk to our previous cast of characters, including our friend Larry the Lawyer, about these articles, so I am going to comment solely as a layman with no advice other than what I read. I can honestly say this is the first time I have read an article where I have been empathetic to the Vue’s side of the story.
I’ve asked myself many times since the Berkovich decision was rendered, how did MCL, will their decades of experience and staff of professionals, miss the legal matter of the Interstate Land Sales Full Disclosure Act? One explanation was that it was because they bought the property from another Developer, so perhaps it was the previous Developer’s fault and therefore MCL had to minimize their mistake to the extent that they were able to with their documents. I guess that’s possible, but now after reading these articles I am wondering if they just got caught up in some N.C. law that conflicts with law that is common in other states, including their home state of Illinois, where they have done many of their projects.
The problem was the contracts didn’t have a “recordable legal description” which violates the ILSFDA. According to the comments in the articles, this actually is impossible to have in N.C. until a unit is completed. This then leads to the fact that ILSFDA has a 2 year cancellation window. But a developer can’t start building until a unit has pre-sales of somewhere around 50%, and even if they get to that percentage, according to what the Vue’s lawyer says, the contracts aren’t binding because of the 2 year cancellation window.
The above is a quick layman’s reading of the articles today and I may have a more educated and perhaps different view on things when I have more legal information. But if this decision actually did set a precedent, and if it really has an adverse impact on large construction projects in the state of N.C., then I would recommend the Berkovich’s not count on that refund just yet. In the end, I do hope they get it though!
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