Somebody bought a home there last month at a foreclosure auction for $810,000, and apparently didn’t know that the city of Encinitas has not granted the property a certificate of occupancy, meaning no one can live there. Homes sold at trustee’s sale — usually auctioned off on the courthouse steps — are sold as-is without any of the disclosures you would get if you went to buy a house from a normal seller.
When Barratt submitted plans to build the luxury development, the company signed an agreement with the city of Encinitas to build two price-restricted affordable homes, for sale or rent to a household earning 50 percent or less of the area median income. For a family of five, that’s $44,600.
To make sure they followed through on that deal, the city withheld one certificate of occupancy from the development, meaning Barratt couldn’t sell that one house until it built the affordable unit.
The lot where the affordable units were to be built is owned outright by Barratt, and thus not included in Bank of America’s foreclosure of the remaining lots. Instead, it’s tied up in bankruptcy court.
John, what did you do with the 1 million I inherited last year…you said you were going to get a really good safe foreclosure deal to replace our house that the patio slid down onto the beach…..John? Where did he go? Must be down there watering the plants.
Goes to show you how clueless the banks were with their investments and due diligence.
The bank knew about the low income requirement and they should have held that lot as collateral and required it be built to ensure their other properties did not get negatively affected.
ps: we were a final bidder for the nantucket greenhouse site and were negotiating terms…our bid was significantly lower than Barratt…what a blessing.
Sometimes the best deals are the deals you don’t do!!!
What will it cost to clean this one up?
My guess is $50k-100k in legal fees will probably produce an occupancy certificate, but this is only a SWAG.
I wonder how long you would have to “rent to a household earning 50 percent or less of the area median income” to satisfy the price-restricted affordable home clause. Maybe make it livable, rent it out for a year, then move in and let Encinitas battle you in court while you are living there.
Rancho Tyvek Estates.
After paying all the legal fees, I believe they WILL qualify as low income and meet the requirements. HA HA HA
No sweat it’s only $800K
There once was a young man from Nantucket
Who bought at a sale and got…………well I’m sure you can figure out the rest
Some more discussion here
http://www.theleucadiablog.com/2010/03/save-810k-by-reading-leucadia-blog.html
http://www.theonion.com/content/opinion/i_wasnt_going_to_buy_this_house