Build-out extensions

In my opinion, this has always been and will always be their problem. They have not enforced it uniformly like Rosemary Beach did. I think they will ulitmately hand it over to the HOA to handle. Of course, this will come right after they hand over the HOA to the homeowners.

I believe they already have handed it over. By law they have to after 5 years or 85% have been sold. I believe both have been met. However the buy back is not governed by the HOA it is governed by the real estate contract.

In my opinion, this has always been and will always be their problem. They have not enforced it uniformly like Rosemary Beach did. I think they will ulitmately hand it over to the HOA to handle. Of course, this will come right after they hand over the HOA to the homeowners.

Unfortunately, I know way more about this than I ever wanted to. In 2003 I bought a lot in Rosemary shortly before the build out. I had already designed a previous home in Rosemary which went through the DRB in 2 passes over about 4 weeks and commenced construction 10 days later, because I was also an approved builder.

When I bought this 5th property shortly before its buildout I turned in a full set of plans along with everything I needed to permit. The Town Architect performed a sketch review on the spot and gave me red lined notes for the proposed changes. When the developer found it it was me they immediately removed me from their approved builder/designer list and sent out a letter through Piper Rudnick, LLP saying that they were going to buy back the property under their Covenants under an impending default of the build out legal theory.

They issued their Lis Pendens, we litigated and later they settled by paying my company twice our purchase price. In contrast, in the Rosemary Beach Land Company vs. Sandpiper Construction case, which was running simultaneous, Sandpiper used a different legal defense theory and ultimately lost their case and the lot.

My non-lawyer thoughts: Read the Covenants carefully. In a legal defense, use the definitions section of the Covenants and construe them strictly which is what the Court must do. I found that ambiguities in Restrictive Covenants are construed against the drafter. This is a basic legal principle. In addition, the Covenants attempting to be enforced must be enforced uniformly which can be found during proper discovery.

Last, use an Attorney who is willing to take the case as a test case on contingency. This will provide counter leverage against the party with the deep pockets.

Bottom line, Florida's Courts abhor forfeiture and strictly construe Covenants and Memorandums against the drafter and in favor of a landowner.

That's about all I already know as fact.

I believe they already have handed it over. By law they have to after 5 years or 85% have been sold. I believe both have been met. However the buy back is not governed by the HOA it is governed by the real estate contract.

As the declarent, they can assign their rights to the HOA. Whether the HOA agrees to pick up the fight is another question.

SmilingJoe, what do you know?

I thought Watercolor and Watersound's Build out provision was controlled by a seperate Memorandum of Agreement vs. a Restrictive Covenant that runs with the Deed like Rosemary. I've seen some Memo's recorded with the buildout left blank which defaulted to a 6 month build out and, others spelled out to a term of 3 or 5 years. As far as I have heard, there were some Deed conveyances that occured without the endorsement of the Memo of Agreement by the Buyer, which would seem to indicate that that lot has no build out provision at all.

Any realtor types out there know if there is something in the Covenants for Watercolor or Watersound that provides for build outs or is it controlled by the seperate Memorandum of Agreement?

I thought Watercolor and Watersound's Build out provision was controlled by a seperate Memorandum of Agreement vs. a Restrictive Covenant that runs with the Deed like Rosemary. I've seen some Memo's recorded with the buildout left blank which defaulted to a 6 month build out and, others spelled out to a term of 3 or 5 years. As far as I have heard, there were some Deed conveyances that occured without the endorsement of the Memo of Agreement by the Buyer, which would seem to indicate that that lot has no build out provision at all.

Any realtor types out there know if there is something in the Covenants for Watercolor or Watersound that provides for build outs or is it controlled by the seperate Memorandum of Agreement?

You are correct in that it is a seperate memorandum of agreement. I just don't see JOE really caring about this issue any longer so ultimately they will give it to the HOA. I think that most people on this board agree that once their profit is made, they tend to turn their attention elsewhere.

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Cheers

You are correct in that it is a seperate memorandum of agreement. I just don't see JOE really caring about this issue any longer so ultimately they will give it to the HOA. I think that most people on this board agree that once their profit is made, they tend to turn their attention elsewhere.

JOE announced extended build outs in Watersound again this past weekend. They also made the Declaration that it was their privelege or right as Declarant to do so. This was completely inopposite to the claim that JOE doesn't care about the issue. More than likely it is this year that control of the HOA will be granted (encumbered) to the homeowners.

I'd love to hear what FlyForFun has to say about this.

On another note, is there anyone on Sowal that remembers the letter that my firm, JMB, LLC, wrote and mailed to all 400 Rosemary Beach Homeowners just before the Rosemary Beach Land Company turned over the community to the Homeowners? See if you can dig it up and tell us if history shows I was trying to help the Homeowners. Every issue I raised came back to haunt the Homeowners even though I tried to get it Noticed. Does anyone remember when James Bagby took his post and who hired him?

Has anyone heard about a new 3 year blanket extension of build-out tme for Watercolor?

Has anyone heard about a new 3 year blanket extension of build-out tme for Watercolor?

Doesn't matter. Those build out deadlines will never, ever be enforced.

Doesn't matter. Those build out deadlines will never, ever be enforced.

Would you bet $300,000 on that?.?

Would you bet $300,000 on that?.?

Several questions--

Why would Joe buyback lots at above market prices (most of the owners of empty lots in Joe communities are underwater from original purchase price) hoping that the market will return sometime in the distant future? They have enough problems as is.

How could they legally selectively enforce buybacks after ignoring/extending deadlines so many times?

Why would Joe spend precious cash for a massive buyback of hundreds of lots?

Why would they buyback lots when they have tons of unsold inventory that they badly need to move?


Sorry. Ain't going to happen.

Fisher the question was posed for WaterColor, that's not hundreds of lots. As for the assumption of never, I remember when people thought they would never hear the name St. Joe again after the papermill closed. Time has a funny way of proving everyone wrong.

Several questions--

Why would Joe buyback lots at above market prices (most of the owners of empty lots in Joe communities are underwater from original purchase price) hoping that the market will return sometime in the distant future? They have enough problems as is.

How could they legally selectively enforce buybacks after ignoring/extending deadlines so many times?

Why would Joe spend precious cash for a massive buyback of hundreds of lots?

Why would they buyback lots when they have tons of unsold inventory that they badly need to move?


Sorry. Ain't going to happen.

JOE can package and sell their rights under the Memorandum of Agreement to the right investor if there is a proper paper trail regarding build out enforcement and extensions. Maybe by a theory of subrogation. There may be enough back up documentation to enforce their rights under the Memorandum's.

This type of bulk right transfer may be very fruitful for the right party.

Fisher the question was posed for WaterColor, that's not hundreds of lots. As for the assumption of never, I remember when people thought they would never hear the name St. Joe again after the papermill closed. Time has a funny way of proving everyone wrong.

SWGB--there are several hundred sold, but undeveloped lots in Watercolor. Just look at phase IV and phase III.

JOE can package and sell their rights under the Memorandum of Agreement to the right investor if there is a proper paper trail regarding build out enforcement and extensions. Maybe by a theory of subrogation. There may be enough back up documentation to enforce their rights under the Memorandum's.

This type of bulk right transfer may be very fruitful for the right party.

You didn't answer the big question. Why would anyone, including Joe, want to buy back a lot for $500, 600, 700k, etc when the market for those lots is way below that?

You didn't answer the big question. Why would anyone, including Joe, want to buy back a lot for $500, 600, 700k, etc when the market for those lots is way below that?

When it comes to the legality of those recorded Memorandums of Agreement the Courts look strictly at the words contained in the recorded doc. My company would pay to be in JOE's position on more than one of those Memorandums with a little due diligence.

Check out one of the recorded Memo's on Watersound Phase I, Bridges I and II and Watercolor Lake District.

AAbsolute:

Very interesting thoughts. Thanks for posting.

Question: Even if Joe found a buyer to purchase in bulk, how would that affect the new lot owner who purchased below the original release price?

Little Fish

AAbsolute:

Very interesting thoughts. Thanks for posting.

Question: Even if Joe found a buyer to purchase in bulk, how would that affect the new lot owner who purchased below the original release price?

Little Fish

I'm only seeing it a couple ways.

For the lot owner who has not commenced construction they may lose big money if they bought the property at resale.

In theory only: An investor enters a subjugation transaction with JOE. The investor exercises the options according to the Memo. of Agreement.

I know that it sounds strange, but I also know LUK has profited by their build out provisions. My company has bought 2 properties that were under build out pressure and litigated same. It does happen.

JOE can package and sell their rights under the Memorandum of Agreement to the right investor if there is a proper paper trail regarding build out enforcement and extensions. Maybe by a theory of subrogation. There may be enough back up documentation to enforce their rights under the Memorandum's.

This type of bulk right transfer may be very fruitful for the right party.

I suppose some people like to buy the right to litigate. But why would Joe invite litigation over this issue by subrogating 3rd parties to its rights under the Memo? When the litigation commences, Joe would be unlikely to avoid being dragged in as a defendant - plus, litigators are paid to find many issues, no matter how tangential over which to fight. Then you add that the litigation will involve our newly nationalized banking industry looking to protect their interests lined up with the landowner against Joe and its subrogee, and that paints one hell of an ugly picture. I'd do more than a little due diligence.

I suppose some people like to buy the right to litigate. But why would Joe invite litigation over this issue by subrogating 3rd parties to its rights under the Memo? When the litigation commences, Joe would be unlikely to avoid being dragged in as a defendant - plus, litigators are paid to find many issues, no matter how tangential over which to fight. Then you add that the litigation will involve our newly nationalized banking industry looking to protect their interests lined up with the landowner against Joe and its subrogee, and that paints one hell of an ugly picture. I'd do more than a little due diligence.

You are 100% correct to be careful and thoughtful.

I don't know how many times Rosemary has exercised their repurchase rights. I do know that 2 times in Rosemary Beach a lot owner was faced with having their lot taken under the provision and we bought the property during the immediate pendancy of the Action. Both times we wound up with double our investment within about 1 year. That's the hard way, but some people or businesses would consider it a successful transaction.

When the Developer exercises its repurchase rights successfully it can be enormously successful. Check out Lot 6, Block 51 Rosemary Beach:
RMB to Sandpiper $95,000
Sandpiper to RMB $95,000
RMB to L.O.F. $550,000

It might be archane in principle, but that's big profit for the right holder. The RMB to L.O.F. was a 5 month hold for RMB. Their assumed interest carry was $5,000 against a return of about $430,000

You are 100% correct to be careful and thoughtful.

I don't know how many times Rosemary has exercised their repurchase rights. I do know that 2 times in Rosemary Beach a lot owner was faced with having their lot taken under the provision and we bought the property during the immediate pendancy of the Action. Both times we wound up with double our investment within about 1 year. That's the hard way, but some people or businesses would consider it a successful transaction.

When the Developer exercises its repurchase rights successfully it can be enormously successful. Check out Lot 6, Block 51 Rosemary Beach:
RMB to Sandpiper $95,000
Sandpiper to RMB $95,000
RMB to L.O.F. $550,000

It might be archane in principle, but that's big profit for the right holder. The RMB to L.O.F. was a 5 month hold for RMB. Their assumed interest carry was $5,000 against a return of about $430,000

The same situation in Watercolor is likely to look like one of these two:

Joe to A - $200,000.00
A to B

You are 100% correct to be careful and thoughtful.

I don't know how many times Rosemary has exercised their repurchase rights. I do know that 2 times in Rosemary Beach a lot owner was faced with having their lot taken under the provision and we bought the property during the immediate pendancy of the Action. Both times we wound up with double our investment within about 1 year. That's the hard way, but some people or businesses would consider it a successful transaction.

When the Developer exercises its repurchase rights successfully it can be enormously successful. Check out Lot 6, Block 51 Rosemary Beach:
RMB to Sandpiper $95,000
Sandpiper to RMB $95,000
RMB to L.O.F. $550,000

It might be archane in principle, but that's big profit for the right holder. The RMB to L.O.F. was a 5 month hold for RMB. Their assumed interest carry was $5,000 against a return of about $430,000

May have worked in RMB, ain't happening in Watercolor. No one in WC paid $95,000 for their lot. Lowest prices from Joe were in the low $200's and many lots are now listed (but not even selling) in that range.

WIthout giving lot numbers, several examples of why this won't work in Watercolor.

Phase III lot examples (and there are lots and lots of these)-

Lot 1 example, Joe to Person A---$777,500
Most recent comp sale--lot next door WITH a house on it--$825,000
or nearby empty lot $275,000

Tell me why Joe would buy this lot back at $777,500????

Lot 2 example, Joe to Person A---$631,500
Most recent comp, lot next door sold for $420,000 (BEFORE prices fell another 10-20%)

Why would Joe buy this lot back???

Lot 3 example, Joe to Person A---$1,231,500
Most recent comp sale $507,000

Why would Joe buy this lot back???

There is example after example in Phase III of lots that Joe sold for 10, 20, even 60% higher than current market.

Then, there is Phase IV. Average sold price of about $550,000 for 42 lots sold in 2005. You can't give those lots away these days. Why would Joe buy these back???


No way in the world Joe will buy these properties back in the foreseeable future. Some of these lots have been extended for 3 or more years now and now we hear Joe has extended another 3 years. That tells the whole story right there.

May have worked in RMB, ain't happening in Watercolor. No one in WC paid $95,000 for their lot. Lowest prices from Joe were in the low $200's and many lots are now listed (but not even selling) in that range.

WIthout giving lot numbers, several examples of why this won't work in Watercolor.

Phase III lot examples (and there are lots and lots of these)-

Lot 1 example, Joe to Person A---$777,500
Most recent comp sale--lot next door WITH a house on it--$825,000
or nearby empty lot $275,000

Tell me why Joe would buy this lot back at $777,500????

Lot 2 example, Joe to Person A---$631,500
Most recent comp, lot next door sold for $420,000 (BEFORE prices fell another 10-20%)

Why would Joe buy this lot back???

Lot 3 example, Joe to Person A---$1,231,500
Most recent comp sale $507,000

Why would Joe buy this lot back???

There is example after example in Phase III of lots that Joe sold for 10, 20, even 60% higher than current market.

Then, there is Phase IV. Average sold price of about $550,000 for 42 lots sold in 2005. You can't give those lots away these days. Why would Joe buy these back???


No way in the world Joe will buy these properties back in the foreseeable future. Some of these lots have been extended for 3 or more years now and now we hear Joe has extended another 3 years. That tells the whole story right there.

I agree with your examples.

Have you read any of the recorded Memo's of Agreement for Watercolor?
Without reading them and understanding the ageement it's probably not very efficient to keep writing.

I agree with your examples.

That's the way a majority of the remaining properties look in Joe developments.

Have you read any of the recorded Memo's of Agreement for Watercolor?
Without reading them and understanding the ageement it's probably not very efficient to keep writing.

Yes I have and I still don't believe Joe will move on these buyback provisions (definitely not for three more years ;-)).

Yes I have and I still don't believe Joe will move on these buyback provisions (definitely not for three more years ;-)).

I've seen a couple interesting Deed transfers in the Public Record in Watercolor. Let's see what happens.