And it'll probably work.
Court's message to home buyers: Trust no one
April 18, 1996
By overturning the fraud convictions of four developers, a U.S. appeals court this week affirmed a common-law doctrine of Florida land sales known as Fornicat Emptor:
Let the buyer be screwed.
The court dismissed the case against former executives of General Development Corp., one of the state's most prolific land-scamming operations. Judges said there was insufficient evidence the men broke federal law.
Which is ironic, considering that GDC had long ago pleaded guilty, and two of the four indicted big shots had tried to do the same.
"Construing the evidence at its worst … it is true that these men behaved badly," the appellate court wrote. " [But] the fraud statutes do not cover all behavior which strays from the ideal; Congress has not yet criminalized all sharp conduct, manipulative acts, or unethical transactions."
Not exactly a ringing character endorsement, but a legal victory nonetheless.
The core of the case dates to the '70s and '80s, when GDC was vigorously marketing Florida property to out-of-state buyers. In its heyday, the company sold thousands of homesites and tract houses in "planned communities" such as Port Malabar and Port St. Lucie.
GDC's scurrilous sales techniques became legendary. Bare lots were sold to aspiring snowbirds for three to five times the true resale value. Waterfront sometimes meant swamp front.
And when customers asked to see their land, the company invited them down for a free tour—but only if they first signed away their right to cancel the contract.
GDC's most ambitious swindle targeted home buyers. The company used its own appraisers to jack up the value of its houses. Customers, most of whom financed through GDC, didn't learn about the price gap until they tried to resell.
Couples who'd bought a retirement home for $65,000 found out the hard way that its market value was $40,000. Complaints began piling up.
Finally the feds indicted the company in 1990. GDC pleaded guilty to conspiracy and pledged restitution. Chairman David F. Brown and President Robert F. Ehrling also agreed to plead guilty.
Within a month, GDC filed for bankruptcy, but the case wasn't done. U.S. District Judge Lenore Nesbitt surprised prosecutors and defendants by rejecting the original plea deal, and a subsequent one. She wanted tougher sentences and stronger terms of restitution.
Trial began in 1991. Nine months later, a Miami jury convicted Ehrling, Brown, Richard Reizen and Tore DeBella. Nesbitt sentenced them to prison, and ordered each to pony up $500,000 to defrauded GDC customers.
What seemed like a victory for the little guy didn't turn out that way. Many home buyers who'd sought compensation ended up with a small check and securities.
Meanwhile, the ex-executives appealed their convictions, leading to Tuesday's dismissal by a three-judge panel in Atlanta.
While agreeing that GDC had overvalued its homes, the judges ruled that "people of ordinary prudence" could have investigated the marketplace before purchasing.
In other words, the customers were at fault—not GDC's bosses. It's a coldhearted view, but the reasoning has logic.
Basically, the judges are asserting what many of us have known for generations: that anyone buying real estate in Florida should trust no one and assume the worst.
Lawyers for the defendants have tried to put a more positive spin on the court's ruling, claiming it vindicates the late GDC as a fair and honorable firm.
And never mind about those guilty pleas.
A gift for dad who has it all in his backyard
December 5, 1996
If you live in a Lennar development, here's the perfect holiday gift for Dad: a shiny new backhoe, so he can find out what's buried in your yard.
The residents of Hampshire Homes in Miramar already have watched as 260 truckloads of tires and trash were hauled out of the infamous sinkhole that opened up there.
Now, three former subcontractors for Lennar Homes have come forward claiming that company officials told them to bury illegal trash at 19 construction sites in Dade, Broward and Palm Beach counties.
According to the subcontractors, the debris included household appliances, auto parts, batteries and even a fuel drum.
Last week, the president of Lennar Homes said the company never ordered anyone to bury junk beneath its developments, because that would've been against the law! "Some fuel drums might have been buried," Stuart Miller said, "but it was not done under company direction."
For alarmed homeowners, the most pressing issue isn't who ordered the trash buried, but what exactly got buried where.
Lennar doesn't offer random excavations of its subdivisions, although the company promises to haul off any unsightly debris that might surface unexpectedly.
That's fine if your dog happens to dig up a rusty Maytag near the hibiscus or a seeping 12-volt Delco under the swing set. But what if the junk is buried too deeply for Fido?
The former Lennar subcontractors say washing machines and other secret goodies are interred beneath FPL power lines in the upscale Coral Springs developments of Turtle Run and Whispering Woods.
At Tamarac's Kings Point, they said, the mother lode of debris is entombed within the banks of lakes.
And somewhere beneath the Images of Pembroke Pointe is the not-so-scenic image of a buried fuel drum.
Even if your hobby is archaeology, you probably wouldn't buy a house if you knew it was built above or even adjacent to an underground dump site.
But more than a few Florida developments are. The law allows limited on-site disposal of lumber, tree stumps and nonhazardous construction materials, but some builders bury all sorts of nasty stuff. It's cheaper than paying hauling fees, plus you get to keep the fill.
The sneaky practice was widespread in years past, and almost never disclosed to potential buyers. Lennar would've sold very few houses had Hampshire Homes been straightforwardly advertised as Tierra del Tire Dump or Sinkhole Estates.
Recent headlines have piqued the interest of hundreds of other Lennar customers, who now wonder what's percolating beneath the surface of their neighborhood. Also curious is Florida's attorney general, who has subpoenaed records from all Lennar developments dating back to 1980.
The company president says the files weren't always meticulously maintained. That could make it difficult to determine which subdivisions are at risk.
For concerned homeowners, even a small backhoe would be a big help. Lennar should provide them free to anybody brave enough to buy one of its houses.
That way there will be no guesswork or suspense. Once you notice the shrubs blackening or the patio furniture starting to melt, you can dig up the lawn and find out what the heck's buried down there.
Apparently Lennar isn't that eager for you to know. So, at least for this season, it's up to Santa to bring Dad that backhoe—and maybe a lightweight metal detector for Mom, too.
And don't forget the kids. Just imagine the joy on Christmas Day if they woke up to find cute little Geiger counters in their stockings!
Our dream, our nightmare
September 13, 1998
The least startling headline of the last few days: The Sierra Club has rated South Florida one of the most blighted places in the country for unchecked urban sprawl.
Among the major metropolitan areas, Broward County ranks ninth nationally in annihilating of wetlands, farms and forests since 1990.That statistic is surprising only because Broward didn't take first place—imagine eight other regions actually doing a worse job of planning.
Elsewhere in Florida, Tampa ranks 14 and Miami-Dade is 18 on the Sierra list. Nationally, the top spot for runaway urban sprawl is fast-mushrooming Atlanta.
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