Developer Avoids Responsibility for Horseshoe Cove Landslides

Horseshoe Cove Landslides—Maggie Valley, North Carolina—May 2003
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The landslides that endangered homes and damaged roads in the Horseshoe Cove residential community raised the question of developer responsibility.

Don Condren— Developer Horseshoe Cove Subdivision— Maggie Valley, North Carolina

At time of the lot sales Mr. Condren provided his clients with a Horseshoe Cove Disclosure of Private Roadway Statement as required by North Carolina Statute 136-102.6. By signing this waiver, property owners relieved Mr. Condren of all responsibility for matters pertaining to Horseshoe Cove private roads.

As noted in the sample disclosure statement below, Horseshoe Cove purchasers acknowledged and accepted two specified future risks: developers’ private roads do not have to comply with minimum state construction standards and property owners in designated subdivisions must jointly assume financial responsibility for the maintenance of these roads.

Sample

State of North Carolina

County of Haywood

Disclosure of Private Roadway


To:

RE: Lot____, _______________ Subdivision

This disclosure is given in accordance with North Carolina General Statutes Section 136-102.6. In conjunction with the purchase by you of Lot____ of the ___________ Subdivision, as shown on a map recorded in Plat Cabinet ______, Slot____________ of the Haywood County Registry, this is to advise that the ______ foot wide roadway shown thereon leading from ________ Road and serving the subdivision is designated on that map as a private road and not a public road. All of the property owners of
property facing on this private road have easements with each other in order to travel over and across this roadway. As a private road, and not a public road, the responsibility for maintenance of this road is upon the property owners although the undersigned shall have the right to improve said roadway to the extent it deems appropriate. No representation is made to you that construction of this roadway is sufficient to be included in the state secondary road system or that the State of North Carolina would eventually assume maintenance of this roadway.


This __________day of _____________, 1987.

By:_______________________


The undersigned purchasers of Lot_____ of _____________Subdivision (Cabinet____, Slot_____, Haywood County Registry), do hereby acknowledge receipt of the above disclosure statement.

This the_______ day of ______________, 1987

_________________________________________

__________________________________________



Facing responsibility for extensive road repairs the homeowners asked their attorney to pursue the question, via an engineering report, of whether Mr. Condren was negligent in the planning, development and construction of Horseshoe Cove roads.

McGill Associates Engineering Report—Horseshoe Cove Subdivision—November 6, 2003

Highlights of the report: numerous road construction deficiencies caused by improper positioning of drainage pipes, ten (10) specific areas of moderate to severe slope failure adjoining road surfaces, suspicion of highly unstable colluvial soils throughout the subdivision, estimated repair construction costs-roads & drainage ($307,021), slope failures ($2,868,750-$5,537,021).

Horseshoe Cove Homeowners Assume Responsibility for Road Repairs

Upon receipt of the engineering report, Mary Euler, the attorney representing the Horseshoe Cove homeowners advised her clients of their options: they could pursue expensive long-term litigation, in which case Mr. Condren would likely declare bankruptcy, or form a property owners’ association and share the costs of restoring the subdivision’s roads.

The Horseshoe Cove property owners chose to abandon litigation. They formed a property owners’ association and assessed members $7,000 for roads and drainage repairs. The subdivision remains at risk: landslide concerns have not been resolved.

Court of Public Opinion

In the absence of litigation a serious issue was never addressed or publicized.

As a developer, Mr. Condren had an obligation to check the Haywood County Soil Survey to determine whether his subdivision site was suitable for homes and road construction. It was only after the fact that Horseshoe Cove property owners were advised that they individually owned and were responsible for a hazardous-land tract. By failing to disclose hazardous-land conditions—a material fact—Mr. Condren quite likely invalidated the terms of the Horseshoe Cove Private Roadway document.

Postscript

Mr. Condren is still designing and building subdivisions. His latest, Rolling Hills Estates, is located in Jackson County.