Posted by Bill H on March 15, 2009 at 18:23:03:
Rather confusing. Seems almost to loosely crafted to be enforceable.
Do not understand how a prior owner has any property rights after the foreclosure sale.
I still say “Define Start of Construction.”
If it were me and I was serious about it, I’d probably purchase it. Hold a one member majority meeting of the owners under the covenant and change it to whatever I wanted it to say and move on.
90 days to start construction Covenant - Posted by Jon Savage
Posted by Jon Savage on March 13, 2009 at 07:34:17:
We are looking at bidding on a bank foreclosure which comes with one completed house and one vacant lot. The developer says that if we win the bid on the package, that she would try to enforce a covenant which states that we would have to begin construction on the vacant lot within 90 days. We have no interest in building the lot. Could not get financig to build on the vacant lot, and any attempt at building a spec home in this market is financial suicide.
The builder who owned this lot has owned it for over 2 years and never started construction. He set presidence over the 90 day covenant by not building on the lot. If we bought this package, is this covenant enforceable?
Re: 90 days to start construction Covenant - Posted by Bill H
Posted by Bill H on March 13, 2009 at 21:23:03:
Very interesting. Define “Start Construction” Long time ago when I was in CA, the City of Los Angeles was in the process of changing some of its zoning/building codes, etc and said you had to have certain constuction started.
You have never seen as many lots get graded, forms put in, etc. some concrete poured, etc, …start of construction.
So, as Rich-CA says the covenant runs with the land and is probably enforceable. HOWEVER, I seriously doubt that it is very specific on what is deemed the start of construction. May be just cleaning and clearing the lot, etc.
Good Luck,
Bill H
Yes - Posted by Rich-CA
Posted by Rich-CA on March 13, 2009 at 18:15:28:
Does the deed restriction have a reversion clause? You could lose the lot altogether if you violate the restriction. Check it carefully and get the advice of an attorney.
Re: Yes - Posted by Jon Savage
Posted by Jon Savage on March 14, 2009 at 16:22:20:
there is no specifics attached to the covenant. No fines, no reversion,
no
option to take lot back, no explaination. It only says the construction
must be started within 90 day of lot purchase. The builder bought the
lot
in 2006 and obviously missed his 90 day cutoff. The bank has
foreclosed,
and now 10 day bidding window.