Monday, April 13, 2009

KTNV ABC,Channel 13,Las Vegas,Nevada,News,Weather,Sports,Entertainment,KTNV.com,Action News .:. Foreclosed community a mess for residents

KTNV ABC,Channel 13,Las Vegas,Nevada,News,Weather,Sports,Entertainment,KTNV.com,Action News .:. Foreclosed community a mess for residents: "The property is no longer owned by the builder, Astoria Homes. It was foreclosed on by one of Astoria's lendors KeyBank, back in December when still in the early stages of development.

Out of the 370 homes planned for Hillside, only 57 were actually built.

Astoria President, Tom McCormick tells Action news, 'no one expected what happened to be as bad as it is,' he continues, 'it's crushing.'"

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Yet another struggling HOA--courtesy of a builder who went under.
Fred Pilot sent this link.

6 comments:

Anonymous said...

This is another one of those deals where even the water and electric utilities are dependent on the HOA. It appears that this development of single family homes is headed for the same fate as the condominium development in Fort Myers, that is, complete financial oblivion. When that happens all residents will have to move out because there will be no water and no electric service.

Evan McKenzie said...

Buyers need to be protected against being left without basic services or infrastructure. If a local government is going to permit or even require CIDs, they make the buyers dependent on the developer following through on all the privatization. If that falls through, the local government owes their (ahem) tax payers something more than a shrug of the shoulders. This whole "are you talking to me?" attitude from local government is pretty cheeky considering that they set the whole thing up as a big windfall for local government, and of course the developer. How about a fallback plan, before the whole deal gets approved? And if there wasn't one, whose fault was it for not demanding one? Not the buyer.

Fred Fischer said...

This issue is systemic of how many businesses work in the US. Businesses believe they are or should be exempt from social considerations, risks or liability so they can exclusively make profits. So when something goes wrong even when its source is their own corrupt, irresponsible or mismanagement actions, someone else is expected to pay the price, guess who ?

The CID industry is no exception and have legislated themselves many special privileges which leaves the members holding the bag every time. So were is our government leaders who have a constitutional responsibility to protect the public good ? Simple just look in the back room, their helping to count the profits between themselves and their business partners.

No business can exist without some risk or liability, yet our society has allowed and legislated in to many cases ways for businesses to do just that. Except the risks and liabilities still exist so ultimately the consumer ends up taking the hit while those who failed and often caused the problems laugh all the way to the bank.

Evan McKenzie said...

Certainly businesses will take economic advantage where they can find it, unless they are regulated so as to protect the public interest.
I think in the case of these disappearing developer situations the fault lies most heavily with local government. The developers are not absconding, after all--they are going under.
Seems to me local governments should be getting more of the blame here for not taking any precautions to protect people in the event of developer insolvency.

Tom Skiba said...

It appears that the most critical and potentially damaging examples are the cases of a community still in the development process and under developer control. They have a greater likelihood of the developer failing and simply walking away.

Yes that can happen with individual homeowners, but a handful of empty homes is significantly less challenging than a partially constructed and probably underfunded community. Perhaps we need a mechanism to require he local government to acquire some responsibility as part of a developers bankruptcy proceeding until a replacement developer can be found by the court. It certainly seems that the local government is a part to the transaction. Even though their name isn't on the paperwork their fingerprints certainly are.

Also, there needs to be a better mechanism to engage the homeowners into the bankruptcy and transition process so that they have some enhanced control over the communities future as it changes developer hands. Like the local governments, they are a party to the process for all practical purposes.

Anonymous said...

At the very least, legislation should be enacted where each individual residential unit is directly responsible for paying the utility companies for electric, gas, water, telephone and so on. If water service is cut off and makes a single unit unlivable, that is far less a disaster than if suddenly a whole development is rendered dark and without water because of a failed HOA.