Builder changed design and lowered prices of townhomes in development

Started by MaureenM1 • 11 replies • 1312 views

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MaureenM1 (PA)
Posts: 344

Posted:

Recently our builder has changed the design of the original townhomes we purchased (due to the slowing housing market) and is selling these townhomes (which are a little smaller) for $100,000 less. Is there any recourse? I have met with several of the owner's and they want to retain an attorney. We are in the process with meeting with the township to see how this was approved since noone in the development was notified. I just happened to google our development and saw the price change and new name of that section of the development.

SusanW1 (Michigan)
Posts: 5,202

Posted:

New section name? New design? new price?

Apparently there is another entirely new complex!

Is it adjoined or affiliated or included in your association?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Our Developer is a HUGE nationwide corporation who had started a very nice developement nearby in Palm Beach County. The homes were 4 to 6 hundred thousand with a buildout of about 400 homes. The market really sunk in Florida and he still had 250 homes to go. Nothing was moving so he started to put in $200,000 homes in between the exhisting higher priced homes.

Naturally the owners of the already built homes went ballistic with that concept. They are currently in court for a 2nd time and so far, the developer is prevailing. The deed restrictions had included that the developer has the right to change the sq. foot minimums at his best discression. Therefore he can reduce the size of the homes still to be built.

Now the arguement will be that it reduces the value of the homes around them. Will it? I am not sure that it will being that the restrictions for care and condition of this area is governed by the same documents. It will take a very diligent Board to enforce on an even keel.

MaureenM1 (PA)
Posts: 344

Posted:

Its affiliated with our development. Its only a total of 40 townhomes 28 are the original design 12 are in another section, which is a similiar design but less square feet at less money.

GlenL (Ohio)
Posts: 5,491

Posted:

Donna hit the nail on the head; most Declarations give the developer the right to change designs so you need to read all of the CC&R's. You can go to the Zoning Board and see if he got permission to change, which he probably did. When something like this occurs he or the ZB are under no obligation to give you a special heads up on the matter. The meetings are posted and held at a regular time and place and it's up to interested parties to pay attention.

Studies show that 5 out of 4 people have problems with fractions

MicheleD (Kentucky)
Posts: 4,491

Posted:

Glen, in our little corner of the country, if there is no ZONING change, ie, changing from one Residential designation to another, there doesn't have to be any notice to anyone or any public meeting held.

Merely changing the square-footage of a home is not a zoning change and, therefore, would not even require any re-permitting, as long as the CC&Rs give the developer the right to make those types of changes. Which ours did. (Developer has long been out of the picture.)

In fact, we have 9 sections to our subdivision. The minimum square footage in the section adjacent to ours is considerably less and the lot sizes are smaller. In fact, in every other section of the development, the minimum required attached garage is a 2-car garage. In that section, in the minimum was reduced to a one-car garage.

The average price of a home in that section started at $139,000.

The average price of a home in our section started at $230,000.

It happens.

GlenL (Ohio)
Posts: 5,491

Posted:

Michele what can I say. Locally once something is approved and it changes the developer must get approval to make sure it still matches the zoning codes. The development next to ours has been through several changes. The OP complained that she received no notification from the township and I was attempting to point out that while agencies give public notice of meetings, they rarely if ever send out special invitations.

Studies show that 5 out of 4 people have problems with fractions

MaryA1 (Arizona)
Posts: 7,043

Posted:

Michele & Glen,

I believe the key word here is "density". If the developer is merely building smaller homes but not adding any more homes to the plan than originally approved then he most likely would not need to obtain approval from the Planning & Zoning Dept. However, if the density changes (more homes being added) then he would be required to resubmit his plan and obtain approval for the new plan. I know a public hearing is required if the zoning classification is being changed, i.e., from R-1 to R-2. I doubt a plublic hearing would be required if only the size of the homes being built was changed.

As for Maureen's situation, I don't believe the developer is under any obligation to inform the h/o's who've already purchased properties that he is now building smaller homes. I doubt there is a provision in the CCRs which states the size of the homes. My CCRs only state what the "land use classification shall be", i.e., single family residential use, multi-family residential use, general public use. IMO, the only change that would require member approval or board approval is a "change in use" and this actually applies to common areas.

MaryA1 (Arizona)
Posts: 7,043

Posted:

MicheleD (Kentucky)
Posts: 4,491

Posted:

Quote:

Posted By MaryA1 on 07/20/2008 3:37 PM
Michele & Glen,

I believe the key word here is "density". If the developer is merely building smaller homes but not adding any more homes to the plan than originally approved then he most likely would not need to obtain approval from the Planning & Zoning Dept. However, if the density changes (more homes being added) then he would be required to resubmit his plan and obtain approval for the new plan. I know a public hearing is required if the zoning classification is being changed, i.e., from R-1 to R-2. I doubt a plublic hearing would be required if only the size of the homes being built was changed.

As for Maureen's situation, I don't believe the developer is under any obligation to inform the h/o's who've already purchased properties that he is now building smaller homes. I doubt there is a provision in the CCRs which states the size of the homes. My CCRs only state what the "land use classification shall be", i.e., single family residential use, multi-family residential use, general public use. IMO, the only change that would require member approval or board approval is a "change in use" and this actually applies to common areas.

Mary, that is exactly what I am saying. The lot sizes remain the same, therefore, there is no "zoning" change, to allow for the change in density.

But our CC&Rs can allow for alterations on the minimum square footage allowed to be built there, up to and including size of attached garage, without the developer having to go back and get any re-permitting. He can't change it to a detached garage, however.

So, there are some changes he can make that affect the cost of the home without ever having to get any zoning permission/approvals and also without ever giving any additional "public notification" to anyone.

KirkW1 (Texas)
Posts: 1,665

Posted:

The thing to do is to check with your city to see if this is under a "planned development zone." If it is, then there is a city ordinance that has some specific restrictions on what can and can't be done in the neighborhood. It is not uncommon for the ordinance to include the land platting and have specific size limits on houses.

DwightT (Idaho)
Posts: 664

Posted:

Just to look at this from the other side, when the developer opened up the last phase of our neighborhood, since the market had been going so good several of the builders in that phase decided to upscale the homes. While most of the homes in our neighborhood where in the $200,000 to $250,000 range, several of the homes in this part of the neighborhood were starting out well over $300,000. Unfortunately the market tanked just as those homes were being finished, and the builders had a hard time selling them. One of them finally went through a short-sale just a couple of months ago. Meanwhile, many of the older, smaller homes have been resold. While the bigger more expensive homes have sat empty or wound up with renters who trashed the place, the smaller homes that more adequately fit the needs and the budgets of the average person have been occupied by people who actually took care of the place.

It used to be that urban planners tried to encourage a mix of housing, with smaller starter homes for families just starting out in the same area as larger homes oriented towards more established families. Having that mix can make for a more dynamic neighborhood.

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