Legal Question in Real Estate Law in Virginia

Real Estate- Class Action?

Can someone out there help me??

Ellery circle is a subdivison in Falls Church that was built just a

couple of years ago. Myself along with several other paid over $700K a piece for these townhomes.

When construction was complete, the property would not appraise for

the sale amount and we were unable to obtain financing. When we triedto back out of the sale, Ryan Homes (NVR Homes) threatened to not only

keep our $100K deposit but to come after us for the full purchase

price. After the bank's appraisal came back to low, Ryan sent out

their own appraiser who, of course, was able to draw up an appraisal

that would meet the sales price. My parents, who were the originally

purchasers, were still unable to obtain financing as I am sure by this

time their bank was spooked by the lower appraisal. Afraid of a

lawsuit against them, my parents turned to me to ask for my help in

securing a loan. I was able to get the loan for them and now the

property is in my name. At the time construction was complete, they

had already depreicated from their purchase price so we rented and

paid the difference between themortgage and the rent. Well money is running out fast and now the homes have dropped to $450K from $700K. What do we do now


Asked on 11/05/07, 7:51 pm

2 Answers from Attorneys
Eugene Policastri Bromberg, Rosenthal, LLP

Re: Real Estate- Class Action?

It sounds like you signed a builder favored contract where the risk is all shifted to the purchaser. If you can prove that the appraiser intentionally inflated the value at Ryan's request, then you may be able to rescind the contract on the grounds of fraud. That would be a difficult claim to prove - simple depreciation due to market forces would not be enough.

I would be willing to discuss the facts in more detail with you.

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Answered on 11/05/07, 9:47 pm
Michael Hendrickson Law Office Michael E. Hendrickson

Re: Real Estate- Class Action?

If the Ryan appraisal was not a significant factor in the procurement of the loan which you eventually secured for this depreciated(and apparently, still depreciating) property(assuming that you had another independent appraisal conducted), you would appear to be without a remedy (other than selling it at a very substantial loss).

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Answered on 11/06/07, 7:17 am


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