Greenville Business Magazine 2010 July issue : Page 24
control issues BY RICHARD BREEN It may take a village to raise a child, but it takes a homeowners associa- tion to keep the village pool clean. But what happens to the village when a homebuilder pulls up stakes or goes out of business before he’s done building it? “It’s not a good position to be in, obviously,” says Byron Hammond, a Greenville real estate attorney. Hammond is experiencing the dilemma first- hand. He lives in Hollington, a McCar Homes subdivision in the Five Forks area near Simpsonville. That is, it used to be a McCar Homes subdivision. While McCar still owns all the undeveloped lots – about half of the 87 homesites have been completed – and is current on its property taxes, the company has pretty much disappeared. “As far as I know, they’re no longer in the market,” says Michael Dey, executive vice president of the Home Builders Association of Greenville. Attempts to reach McCar in Greenville and in the Atlanta area, where it was headquartered,were unsuccessful. It appears the company has also shut down operations in Florida, North Carolina and Georgia markets where it was building homes. 24 GREENVILLEBUSINESSMAG.COM | JULY 2010
Control Issues
Richard Breen
It may take a village to raise a child, but it takes a homeowners association to keep the village pool clean. But what happens to the village when a homebuilder pulls up stakes or goes out of business before he’s done building it?
“It’s not a good position to be in, obviously,” says Byron Hammond, a Greenville real estate attorney. Hammond is experiencing the dilemma firsthand. He lives in Hollington, a McCar Homes subdivision in the Five Forks area near Simpsonville. That is, it used to be a McCar Homes subdivision.
While McCar still owns all the undeveloped lots – about half of the 87 homesites have been completed – and is current on its property taxes, the company has pretty much disappeared.
“As far as I know, they’re no longer in the market,” says Michael Dey, executive vice president of the Home Builders Association of Greenville.
Attempts to reach McCar in Greenville and in the Atlanta area, where it was headquartered, were unsuccessful. It appears the company has also shut down operations in Florida, North Carolina and Georgia markets where it was building homes.
“They were a member,” says Nancy Meeks of the Greater Atlanta Home Builders Association. “I think they may have gone out of business.”
McCar’s rapid demise has left Hollington in limbo. Typically, a developer retains control of a homeowners association until the community reaches a certain level of completion, at which time the homeowners themselves take over. Until then, the developer is responsible for matters such as maintaining common areas, keeping the pool clean, paying the streetlight bill, etc.
But at Hollington, McCar shut down before control was transferred to the homeowners.
“There’s been no response from them at all,” says Kelly Goering, a Hollington homeowner. “They’re kind of like a ghost.”
A ghost that leaves the scary specter of streetlights being turned off, weeds sprouting in the common areas and ghastly green algae overtaking the pool. To ward off that possibility, residents took matters into their own hands.
“We elected a board to take over,” says Goering, who was named president of Hollington Homeowners Association Inc.
McCar had outsourced property management at Hollington to Mauldin-based Norcon Property Management Inc. The Hollington HOA has retained Norcon for day-to-day management and is busy planning activities that bring the typical suburban subdivision together.
“We’re extremely active in the neighborhood now,” Goering says. “We’re making things work.”
That may be the best Hollington can hope for, at least until McCar does something with the undeveloped lots. Some former McCar communities in the Greenville area are being completed by other builders.
McCar was building in Creekwood, Forrester Heights, Heritage Point, Heritage Creek, Hollington, Shenandoah Farms and Tanner Estates. Ryan Homes took over Forrester Heights. Legendary Communities is working in Creekwood, Heritage Point, Shenandoah Farms and Tanner Estates.
“Greenville has definitely been good to us,” says Jessica Bahr, marketing manager for Georgia-based Legendary. “They’ve definitely welcomed us.”
Legendary is also building in former McCar communities in the Atlanta and Charlotte areas. Bahr says Legendary has looked at Hollington and may be interested in taking on additional communities.
There are 39 unbuilt lots remaining out of 166 in Heritage Creek, according to developer Rick Tuley.
“There’s currently nobody building,” he says. “I believe it’s possible we could have a new builder in there by the end of the year.”
Meanwhile, Hollington’s situation is unique. Most of the time, there is a developer who owns all the land. They sell the lots one by one or in groups to one or several homebuilders.
“In our neighborhood, McCar bought all the land and subdivided it,” Hammond says.
That’s unlike a community such as Heritage Creek, where a developer still existed even after McCar disappeared.
“I considered them a very good company,” Tuley says of McCar. “I don’t know all the story, but my understanding is that problems in other markets led to them pulling out of Greenville and eventually going out of business.”
Thus, Hollington’s HOA has taken control out of necessity, not out of authority. When a new developer and/or builder comes in, “they can basically undo anything you’ve done,” according to Hammond.
As a homeowners association, “you can’t go in and start making radical changes,” he adds. In Hollington, the HOA is merely maintaining the status quo until the situation is resolved.
“We’re just kind of the odd man out until McCar gets its act together,” Hammond says.
How the HOA issue in Hollington is sorted out “all boils down to what the rules are for the homeowners association,” according to Dey.
He says that Hollington homeowners are currently doing what they should be doing, but he also recommends that prospective buyers ask for a copy of the homeowners association rules before they buy.
“I always have in any subdivision I’ve ever moved into,” Dey says.
Meanwhile, McCar Homes Inc. is still considered an active, for-profit business by the Georgia Secretary of State’s office.
It hasn’t paid its $30 registration fee for 2010. GBM
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