Legal Question in Real Estate Law in Nebraska

Developer fails on marketed promises

We bought Lot in Nebraska in a new development last December 2007. We used a realtor, not affiliated with the development; paid cash went through the closing process with Title Company. No papers were signed holding the developer responsible for his marketed promises.

Development has 15 Homes built (av 500K), 15 lots sold, about 40 lots left. Roads and water in bad shape and not completed. Developer fails to live up to his marketing of quality hard top roads and is trying to make the HOA take them over. HOA says the developer is responsible but has roads evaluated. Roads were put in incorrectly and need to be redone. Water pressure almost none and water test shows 17 colonies of coliform. Nitrate level was at (6.2 short of unsafe.) Developer says he has 4 wells to supply development but HOA discovers he has 1 working well and got around laws by claiming low population. We don't want to build on this lot. We are concerned that we will be financially drained by HOA dues, assessments and property taxes for a lot we would feel unsafe to build on. We don't want to be part of the battle.

Do we have any rights to get out from under the lot and get our money back?

Asked on 8/16/08, 7:32 pm

1 Answer from Attorneys

Duke Drouillard Drouillard Law, LLC

Re: Developer fails on marketed promises

Your best option is probably to sell the lot you purchased to someone else. You will probably lose money on the transaction, but your problem will be solved and it is likely to be less expensive than going to court. Rescission of the contract (getting your money back for the lot) is not a usual remedy unless you can prove fraud in the inducement to contract. Legal fraud is very difficult to prove, particularly the element of intent. As far as developer not living up to his marketing, the courts allow a developer significant latitude to modify their plans as necessary. Marketing claims rarely rise to the status of a promise that is enforceable in court. Once again, you would need to prove fraud, unfair or deceptive business practices, or an implied contract. Because these cases are complicated, the attorney you hire would need a substantial amount of fees in advance just to investigate your claims to see if you have a viable claim. Even if a claim could be presented, it will cost another substantial investment of fees to take your claim to court and you may lose. Selling the property at a loss may leave a bad taste in your mouth, but it is likely to be the wiser and cheaper decision.

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Answered on 8/18/08, 11:17 am

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