Legal Question in Real Estate Law in Virginia

Truth in advertising by builder

A particular semi-custom builder is advertising that they offer a ''free'' finished basement. I saw it written and placed by the front door of the model, as well as in literature distributed by the builder. I paid close attention to any fine print details, but none were listed. The assistant to the site manager casually asked me if we were going use their lender as we looked through the carpeting, tile, etc. options. I asked if there were any special incentives. She told me if we did not use their lender then the price of the home would be an additional $10K. That was the first I'd heard of that and saw nothing in writing about it. Luckily, we have not signed a contract with this builder yet. Her explanation had to do with the fact that the ''free'' basement is being funded by this particular lending institution. Even my realtor was taken aback by this. She had never heard of such a thing. Is this legal for them to charge you more for not using their lender? And shouldn't potential buyers be made aware up front, in writing? By the way, you do not have a choice to leave the basement unfinished. Something just doesn't seem right with this.


Asked on 4/20/05, 11:35 pm

1 Answer from Attorneys
Michael Hendrickson Law Office Michael E. Hendrickson

Re: Truth in advertising by builder

The builder is free to charge whatever he wishes for the project, including a higher price to those purchasers who decide to use a lender who is not the one recommended by the builder.

Of course, it would be nice if the builder made prospective buyers aware of any such surcharges "upfront", but there is certainly no requirement that he do so.

Read more
Answered on 4/21/05, 7:54 am


Related Questions & Answers

More Real Estate and Real Property questions and answers in Virginia