Appearing in the Nashville City Paper on Monday, March 9, 2009 12:00 AM by: E. Thomas Wood, Kyle Swenson and Walker Duncan:
Robert Elliott v. 12th & Division Properties LLC d/b/a Terrazzo and Bank of America N.A. Filed March 4. For the second time in recent weeks, a local condo buyer has sued a development accusing it of not complying with federal housing regulations.
According to court documents, Elliott signed on to purchase a $614,000 condo in the Crosland-developed Gulch anchor Terrazzo in early 2007. But when he later indicated he wanted to rescind the sales agreement, he says the Terrazzo refused to return his $61,490 deposit.
Like the lawsuit filed by a group of buyers against the Braxton in Ashland City, the suit claims the Terrazzo has failed to comply with the Interstate Land Sales Full Disclosure Act (ILSFDA), which aims to “insure full disclosure to consumers of relevant facts prior to their decision to purchase property.”
Under the statute, all housing developments with more than 100 units must register with the U.S. Department of Housing and Urban Development (HUD) and then provide periodic “property reports” to prospective purchasers. The act also allows buyers to revoke their sales contracts within two years of the signing and regain all money paid under the contract. Click here for a list a Tennessee developments on HUD’s list.
The Terrazzo, which will have 109 units, has “incorrectly asserted that the Land Act does not apply to their development,” Elliott’s suit states. But in an e-mailed statement, the project’s attorney, C. Mark Carver of Sherrard & Roe, wrote that he expected Crosland to prevail “because the developer has complied with all of the requirements under Mr. Elliott’s contract. The Terrazzo is almost complete and buyers will begin closing and moving in within the next few weeks.”
This decision is truly going to be a landmark decision and should break the downtown Nashville condo standoff between contracted buyers and developers.
It is interesting that the Terrazzo’s attorneys assert that the developers have “complied with all of the requirements” of the contracts when the issue regarding the ILSFDA has not yet been decided by a judge in either case. I also understand that a similar suit is about to take place in the Icon.
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