Kulana project lot owners are fighting back. Faced with a 5 p.m. deadline today, Friday, May 20, to either agree to new contracts at higher prices or risk losing their lots, owners are retaining legal counsel, and considering filing complaints
Kulana project lot owners are fighting back. Faced with a 5 p.m. deadline today, Friday, May 20, to either agree to new contracts at higher prices or risk losing their lots, owners are retaining legal counsel, and considering filing complaints with the state Department of Commerce and Consumer Affairs (DCCA).
Honolulu-based attorney Jim Bickerton confirmed earlier this week that he is representing a Kaua‘i client to contest the price increase imposed by leaders of the project developer, Kapaa 382 LLC.
William R. Hancock is the principal of that entity.
Bickerton said his clients wanted to go through with their purchase, but under the conditions of the original contract at the original price.
Bickerton declined to identify his client. He said he had received other inquiries from other Kulana lot owners.
“My opinion is that the developers can only cancel if the buyer is unable to perform the original contract. The buyer can sue to enforce this contract,” he said.
Lot owners of the Kapa‘a project paid $10,000 more than two years ago in the hopes of owning a home.
Some lot owners have been given less than three days to decide what to do after waiting nearly three years and being given vague timelines for the development, they said.
In a fax sent by Vision Properties Inc. real-estate professional Donald Pixler to several other local real-estate professionals, Pixler wrote, “please note that the deadline for receipt of those DROA’s (Deposit Receipt, Offer Acceptance) is May 20. We intend to immediately re-list each apartment for which we have not received an executed DROA by the close of business May 20.”
Bickerton said if Vision Properties Inc. leaders seek to re-list the units, he would sue on behalf of his clients.
Kaua‘i resident Lance Poulsen, who has developed properties in California, owns a lot at Kulana. He said Thursday he felt the Kulana developers were doing something illegal, and had contacted DCCA officials to file a complaint.
Poulsen said that after all the terms and conditions were agreed to, the price should be locked in and not changed two years down the road, seemingly in relation to the increase in market value.
Poulsen said the developer used the buyers’ money to secure financing, and is apparently looking for more.
“I’ve read my contract, and their is no provision to raise prices. I’m flabbergasted,” said Jim Myers, a lot owner who purchased his two years ago. “If this is an out (for the developers), I don’t see it.”
Myers resides in the Tacoma, Wash. area, and was on Kaua‘i this week. He said Thursday he had not received his information packet from Vision Properties leaders.
Some lot owners said they have been notified of the increases only recently, some within the past few days.
They said it would be difficult to get their new financing in order to close their escrow accounts by July 15.
The original contracts allowed a 60-day period to close escrow accounts from the receipt of the final CPR (condominium public report, something similar to a disclosure statement). Many people are wondering why a developer who filed a CPR effective April 4 just released the report to buyers more than five weeks later.
The CPR is in effect for 13 months, according to officials with the state DCCA Real Estate Commission.
Hancock had earlier referred all comment to his lawyer, Tom Sylvester.
Sylvester did not return multiple calls Wednesday and Thursday seeking comment for this story.
One man whose identity is known to The Garden Island said his $10,000 deposit check made out to an escrow company had not yet been cashed. He said he had dealt with an in-house real-estate professional at Vision Properties Inc., who told him the check was being held due to a change in escrow companies. After the escrow-company switch, he said his check remained uncashed. He said he was deliberating whether to stop payment on the check and bail on the project.
Ed MacDowell, principal broker for Vision Properties, said he did not know about this specific incident.
Several other lot owners told The Garden Island they had sought out at least four local lawyers, but were told these lawyers could not take the case because of potential conflicts of interest with either the developer or Vision Properties, the listing agents.
Vision Properties Inc. and two employees of the firm were subjects of two complaints filed with the DCCA in 2001. According to DCCA records, certain company officials allegedly failed to disclose pertinent information, and were accused of an advertising violation. Vision Properties Inc. received warning letters from the DCCA after both complaints had been investigated.
- Andy Gross, business editor, 245-3681 (ext. 251) or agross@pulitzer.net.
