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fisher

Beach Fanatic
Sep 19, 2005
822
76
fisher, where/when/from whom did you hear about another 3-yr extension? as a lot owner, i don't think i've gotten anything on paper in that regard, but i've also been wondering when st. joe would do something about this issue

thanks

I didn't start the speculation about extensions (see post #59). I simply responded to the speculation.
 

fisher

Beach Fanatic
Sep 19, 2005
822
76
It looks on its face like that agreement is intact. It looks like if there is a default in that example JOE's remedy is to buy back the lot for about $206. It looks like JOE would not have to put up its cash until a time of its chosing. It looks the current Owners have agreed to the encumbrance. It looks like upon JOE's repurchase of the property they could endow the property with a new build out period of any duration as an open question of law.

I don't know anything about JOE's business so I am putting forth a complete guess example. What if JOE exercised its option on this or a few other properties to show its resolve in keeping the community build out moving forward for those Watercolor owners who did buy and build? Completion of the community has value to every owner and JOE. What if JOE bought the lot for $206,000 and had Haven Homes put in a valuable model for $325,000 in a partnership arrangement? The market says that JOE could get $700,000 for that product on that lot very quickly. That's an effective use of JOE capital. Where else can they get that ROI (48%) at this time?

You are assuming that the new homes Joe builds on these repurchased lots would sell quickly (good luck with that one) versus simply adding to the already huge oversupply in the market. You also assume that Joe could sell said home for $700k one home in Cypress Cove just sold for $600k and several are listed at or below $700k now (not the $700k in your example). In addition, you are assuming that Joe could get someone to build a nice Watercolor type home for $325k.

Joe needs to SELL its current inventory of lots and home, not add to the problem by ACQUIRING more lots and building more homes.

Finally, you chose an example of one lot where there is a VERY, VERY SLIM chance that Joe could make a profit using your logic. The vast majority of the lot repurchases would result in immediate paper losses for Joe.

There is no economic argument that could be made for Joe repurchasing more than a few lots (and even those argument are made on shaky ground) in WC, WS or WSWB. Major lot repurchases just aren't going to happen.
 

Matt J

SWGB
May 9, 2007
24,646
9,496
What if they started enforcing the lot buildouts and charging the owners the penalties? If I remember correctly it was $5,000 per month? Once year and you've knocked off $60,000. That's a pretty good discount.

I'm only guessing at this here try to keep it to a dull roar.
 
What if they started enforcing the lot buildouts and charging the owners the penalties? If I remember correctly it was $5,000 per month? Once year and you've knocked off $60,000. That's a pretty good discount.

I'm only guessing at this here try to keep it to a dull roar.

On the Memo of Agreement I attached above for an example case there is no provision for penalties being assessed. The Root Doc. only shows a provision for the Developer to buy the lot back for its original purchase if construction is not commenced by January '09.

There might be a restrictive covenant that talks to the penalty provision.

What's most fascinating to me about this particular Memo. of Agreement is that it reads to declare the Owner liable under the agreement if construction does not commence in the next 2 months, and JOE's repurchase right stays intact for 10 years after the signing of the original Memo. I'm reading this one to say JOE can elect to enforce at anytime after default even waiting until the market returns.
 

fisher

Beach Fanatic
Sep 19, 2005
822
76
On the Memo of Agreement I attached above for an example case there is no provision for penalties being assessed. The Root Doc. only shows a provision for the Developer to buy the lot back for its original purchase if construction is not commenced by January '09.

There might be a restrictive covenant that talks to the penalty provision.

What's most fascinating to me about this particular Memo. of Agreement is that it reads to declare the Owner liable under the agreement if construction does not commence in the next 2 months, and JOE's repurchase right stays intact for 10 years after the signing of the original Memo. I'm reading this one to say JOE can elect to enforce at anytime after default even waiting until the market returns.


Let us know when the mass buybacks by Joe begin.
 
Let us know when the mass buybacks by Joe begin.

I hope you didn't come to believe that JOE would start a mass buyback of lots that violated the build out provision. I don't believe they will.

I do believe they will enforce the Memoradum of Agreements regarding the build out provision selectively. Case by case either JOE or their Assigns may start enforcement at anytime. I'll let you know if I see it.
 
The latest news

This is he latest news I have received from JOE rep. Anne Winicki on buildouts. This is probably a qualified modification in accordance with the Statutes of Frauds to the Memo's of Agreement.



Hi John,

In WaterSound Beach, all lots currently with a 2008, 2009 or 2010 construction start date are now extended until 3/1/2011.

In WaterColor, all lots with an 08, 09 or 2010 construction date are now extended until the same month but 2011. So, if the current date is 6/2009 it is now 6/2011.

Hopefully, this will help those up against the time crunch some breathing room. It will also allow those who would like to eventually build in a year so the opportunity.

If you have any further questions just let me know. Have a great weekend.

Thanks,
Anne
 
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