During the private sales presentation, participants will have the opportunity to view the layout for the 3,200 acre mountain property that define High Carolina. Guests will be shown a map for the centerpiece Tiger Woods golf course and selected homesites. They will almost certainly be told that the High Carolina lots which are priced from about $500,000 to more than $2 million are desirable real estate. While this information may be true there are two factors that may undermine the future value and salability of land in this development.
Mountain land in the 21 county region known as Western North Carolina is inherently unstable. Professionals and lawmakers warn that the permitting of residential construction on unmapped and untested mountain slopes has caused and will continue to result in costly uninsurable property loss. In October 2006 Governor Mike Easley stressed the importance of the Western North Carolina landslide mapping program with this comment:
These maps will show which areas are prone to landslides and that will help developers, county officials, and residents decide where to safely build homes, roads, and other structures.The Cliffs Communities, Inc. knew when they purchased the Buncombe County tract that many of High Carolina’s building sites were likely hazardous. In August 2004 Buncombe County officials issued a report which stated that the county’s land was highly susceptible to slope failures. Preliminary Buncombe County geologic hazard maps support these findings. (In September 2004 landslides devastated fifteen counties in the region).
Considering the risks, this hazard information should be disclosed on The Cliffs at High Carolina website.
It is unknown whether the Cliffs’ staff will advise their prospective clients that High Carolina land sales are subject to federal law under the Interstate Land Sales Full Disclosure Act. This law demands that all interested buyers receive a comprehensive Property Report regarding the land for sale. The developer must provide a description of the land and disclose all known geologic hazards. Experts define a geologic hazard as a natural geologic event that can endanger lives and threaten property.
Encumbrances, Mortgages, and Liens
HUD requires the following warnings in all Property Reports:
A person with legal title to property generally has the right to own, use and enjoy the property. A contract to buy a lot may give you possession but doesn’t give you legal title to the lot. You won’t have a legal title to your lot until you receive a valid deed. A restriction or an encumbrance on your lot, or on the Subdivision, could adversely affect title to your lot.The Cliffs at High Carolina Property Report must disclose all encumbrances and restrictive covenants.
The Cliffs Communities, Inc. is a privately held company but because their sales activities are regulated under provisions of the Interstate Land Sales Full Disclosure Act , the company must provide HUD with a copy of their Corporate Charter and financial statements. These documents are available to the public.
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?"