Ginn Clubs and Resorts, a privately held company, released lots in their 6,000 mountain acre Laurelmor project in November 2006. Homesites were priced from $500,000 to $1.2 million. Today there are no homes completed and the developer is in default on a $675 million Credit Suisse loan.
Land Resource, L.L.C., a privately held company, began selling lots in their 3,917 mountain acre Grey Rock at Lake Lure project in 2005. Prices ranged from $200 to $700 thousand. Today there are no homes completed and Land Resource closed their sales office in July 2008.
Privately held companies are generally not obliged to reveal financial information but developers selling land under the Interstate Land Sales Full Disclosure Act are required to submit copies of their Corporate Charters and financial statements. This information is available for public inspection.
Under federal law, developers must give each purchaser a detailed Subdivision Property Report. All Property Reports must state the following:
A restriction or an encumbrance on your lot, or on the Subdivision, could adversely affect title to your lot.A developer must list all encumbrances, mortgages, and liens. For instance the April 25, 2008 Laurelmor Property Report disclosed that “a first and second mortgage in favor of Credit Suisse, Cayman Islands Branch, encumbers the property subject to this Property Report.”
The United State Department of Housing and Urban Development advises all purchasers to carefully read their Property Reports before signing anything. The most important question that the government asks purchasers to consider is “If the developer defaults on the mortgage or goes bankrupt, could you lose your lot and investment to date to satisfy a claim against the development?"