Lennar response to homeowner concerns

Group,

I'm writing because I wanted to share the response I got from Sean Sullivan regarding some of my concerns about the information I received during the sales process. My concerns were essentially:

1. We were not educated or properly notified by the sales team about the HOA dues increase.

2. We were all told we would be in an HOA that consisted of Merchant alone, not all of the condominiums (but also in a master HOA).

3. We were told we would get Bosch washer/dryers.

4. We were told we could not use lenders outside of their preferred lenders (but many of you more savvy than I disregarded - kudos to you all).

5. The anti-speculation agreement was a sham.

He responded with lawyers (in red):

Hi Sean,  

 

Thanks again for the email you sent last week. The content did not allow for me to respond personally, below is from corporate counsel.

    

 

Mr. LaRrett,

 

This is in response to your email regarding various issues and problems you claim to have suffered in connection with your purchase of your Unit from our client, HPS1 Block 51, LLC. We will respond to your issues in the order presented in your email.  We are sorry that you may not have understood what you were buying, however, as you will see below, we make every effort to ensure that our buyers are well informed before they decide to purchase a home within the community. 

 

1. You state that you were not informed of the phasing of the community and that the increase in the homeowner assessments upon annexation of an additional phase was a surprise.  It should be noted, that the Final Subdivision Public Report for Phase 1, covering your Unit, as well as the HOA Budgets, and the Disclosure Statement clearly describe the community as phased, as do the CC&R's.  Also, the amount of the assessments for the first phase, as well as the assessments at build out, are set forth in the Budgets and the Final Subdivision Public Report.  The CC&R's provide that the assessments will change each time a new phase is annexed into the community upon the first closing of a unit in that phase.  More importantly, prior to your signing of the Purchase Agreement and Joint Escrow Instructions ("PSA"), you were provided with copies of the documents referenced above for your review.    

 

2. You state that you were told that only your building would be in its own separate homeowners association.  Again, the CC&R's for The Condominiums At The Shipyard, the Final Subdivision Public Report for your phase, the Budgets and the Disclosure Statement all outline that the community and the two homeowners associations would include many phases and many other buildings. 

 

3. Regarding the washer and dryer, it is true that the seller had intended to install the Bosch brand, however, Bosch had discontinued the specific models that would have fit the requirements of the space within the units and alternative appliances had to be installed.  As stated in the PSA, seller has the right to make changes, alterations and substitutions in the home as it deems appropriate or necessary.

 

4. Regarding the option to use "preferred" lenders, it is the seller's right to require buyers to submit a loan application to a lender selected by seller, in order for seller to obtain a timely evaluation of buyer's ability to obtain a loan and close the purchase transaction, however, there is no requirement that buyers use that "preferred" lender or any of the preferred lenders for the community.  Preferred lenders are selected by the seller so that the lenders can perform the project approval process of the community so that the buyer's qualifications are the only criteria necessary to make a loan.  As provided in paragraph 3 of the PSA:

 

"BUYER may make application to Universal American Mortgage Company of California ("UAMC") or any lender of BUYER'S choice.  Regardless of lender selected by BUYER, SELLER requires BUYER to submit to UAMC, an affiliate of SELLER, for its own purposes, a preliminary assessment of BUYER'S ability to qualify for a mortgage loan to purchase the Property, such information and authorizations requested by UAMC to perform the preliminary qualification assessment.  BUYER is not obligated to use UAMC to obtain a loan to purchase the Property.  If BUYER chooses to obtain financing through a lender other than UAMC, BUYER agrees to provide SELLER with the name, address and phone number of such lender, the loan officer and loan processor, all within the same five (5) day period."  

 

5. Regarding the termination of the use of the "Anti-Speculation Addendum" that was part of your purchase documents, the seller had the right to impose such a condition and it also had the right to terminate the rights of the seller to prevent buyers from competing with sellers sales activities.   

 

Per discussions with the sales staff, the sales staff has a very clear understanding of the community and the project documents.  We do not believe that any misrepresentations were made by the seller or its sales staff.  The issues you raise and are concerned about were well delineated in the project documents outlined above and that you were given in connection with your home purchase.  The Final Subdivision Public Report for your phase of The Condominiums issued by the California Bureau of Real Estate ("BRE), was reviewed and approved by the BRE as providing information about all material facts regarding the structure of the community, the sales documents, and the finances of the homeowners association that you would become a member of, so that you could make an informed decision regarding the purchase of your home. 

 

  

If you have any further questions or concerns, please do not hesitate to contact me.  

 

Regards,

 

Sean Sullivan 
Sales Director

One Sansome Street, Suite 3200
San Francisco, CA 94104

 

Office Phone: 415-344-8844
Mobile Phone: 415-439-3375

 

This e-mail is intended only for the use of the person to whom it is addressed and contains information which may be confidential or priviledged. If you are not the person to whom this email is addressed, or an agent authorized by such person to receive this email, you are hereby notified that any examination, copying, distribution, or other unauthorized use of this e-mail is prohibited. If you receive this e-mail in error, please notify me immediately at the e-mail address referenced above.

I have come to the conclusion that in order to make any progress on these issues we need to consult lawyers of our own. For what it's worth I called up our sales person (having since left Lennar due to, among other things, "ethical concerns") and she was shocked about the HOA dues increase and phasing increases to come, which makes the assertion that the sales staff "has a very clear understanding of the community and the project documents" laughable. For the record, I do not hold her accountable, but her superiors.

It's not all doom and gloom - I still like where we live and the community we are forming but I feel that Lennar will absolutely not budge on this unless we take up counsel of our own. I feel that we all really were misrepresented about the HOA dues and that Lennar should be responsible. And I do not appreciate Mr. Sullivan responding in no other way than to put Lennar's lawyers on me and my wife.

Thanks to anyone who read this far!

Sean LaRrett and Jewel Robinson (Merchant 510)

seanlarrett@me.com

415.572.7326