THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, August 28, 1994 TAG: 9408250201
SECTION: CAROLINA COAST PAGE: 44 EDITION: FINAL
SOURCE: Chris Kidder
LENGTH: Long : 112 lines
In June of 1991, when I first wrote about Hatteras Pines, a subdivision in Buxton on Hatteras Island, I was impressed by its promise. Today, Hatteras Pines property owners would tell you that promise isn't enough. They've seen that the best laid plans can go awry. They've learned the hard way that counting on promises can be an expensive proposition.
Hatteras Pines is a beautiful piece of property with 77 homesites nestled high and dry in the heart of Buxton Woods. It's unique. No other Hatteras Island community has recreational facilities and restrictive covenants marketed expressly for year-round living rather than vacation resort rentals.
``We had looked for the place like this, built for local people,'' says Mike Kostich, an accountant who bought a lot at Hatteras Pines in 1990 and built a house there the following year. ``We were really excited about it.''
In June 1991, three houses had been built in Hatteras Pines and three were scheduled to be started over the summer. A tennis court was under construction; a pool was promised as soon as permits were in hand.
Three years later, Hatteras Pines has just six houses. The tennis court is finished but not maintained. The promised pool has yet to be built. For 18 months or longer, say property owners, the grass and weeds along roadways and in common areas were never mowed.
The developer, Hatteras Investment Limited Partnership, hasn't sold a single lot in over two years. Recently, it dropped prices to spur sales. Property owners who paid full price for their lots were furious.
``My home has been de-valued $10,000,'' said Drew Pullen, a local banker who built his Hatteras Pines house in 1990.
The owners say they were told by the developer's agents that the 3.5 miles of roads in Hatteras Pines could be deeded to the state. Sales literature distributed in 1991 promised that roadways were ``built to state specifications.''
But Bud Smock, Hatteras Pines' first resident, says that when property owners asked the state to take over their roads, they were told the roads didn't meet the standards. ``I went through every motion I could,'' says Smock. ``The state said no.''
Property owners also learned that their deeds of trust - legal documents usually not seen by buyers until closing and rarely read word-for-word - require that the roads remain private.
``I didn't read (the deed),'' says Pullen. ``My attorney didn't point it out to me. Who would think of looking for something like this?''
The property owners aren't optimistic that the state will change its mind. They're concerned about the costs of repaving the roads in the future.
The Hatteras Pines homeowners association, set up through deeded covenants with mandatory membership for all property owners, had a contingency fund for road maintenance. But when the partnership postponed building the swimming pool, it suspended association assessments to placate owners. Now there's no money in the fund.
The developer hasn't enforced other provisions of the deeded covenants. Storm debris and fallen trees haven't been removed from empty lots. ``It's a fire hazard,'' says Pullen. ``If there was a fire in the woods, I'd lose everything.''
Hatteras Pines owners have contracts promising a swimming pool and other amenities. They have properly recorded covenants and other written documents promising a hassle-free, upscale community. What happened?
Dr. Charles Blair, a Richmond doctor and the money behind the Hatteras Investment partnership, was an absentee owner, says his local attorney, Hood Ellis. ``He relied on local folks to manage his investment.''
Stewart Couch, owner of Hatteras Realty and real estate agent for the development, says the sagging economy made selling lots at Hatteras Pines impossible. Without sales, the partnership was reluctant to spend money on the development.
The property owners say Hatteras Pines lots don't sell because the partnership hasn't maintained the property.
For the first few years, owners were reluctant to take legal action against the developer which, they thought, involved a three-way partnership between Couch, Hatteras Island businessman Dave Lang and Dr. Blair.
Property owners met repeatedly with the developer and his agents. ``The developer made a good faith effort to meet with these people,'' says Couch.
But nothing happened, say the property owners. ``All we wanted them to do was come and take responsibility for what needs to be done,'' says Kostich.
``This is typical for Hatteras Island,'' adds Pullen. ``People are laid back. They expect things will work out.'' Things didn't.
Seven property owners - including Pullen, Kostich and Smock - decided to hire an attorney and sue the developer, if necessary, for breach of contract and misrepresentation.
They're concerned about their restrictive covenants. Their lawyer has told them that allowing covenants to go unenforced jeopardizes future enforcement.
They're upset that Couch wasn't a partner in the Hatteras Pines development, although he had told each of them that he was. Some say Couch's involvement was a factor in their purchase and that they relied on him, as a local representative, to represent their interests with Blair.
Couch now says he had ``an option to become a partner at the discretion of Dr. Blair'' but Blair didn't let him exercise the option.
The owners want to know that 10 years from now they won't be faced with splitting a $250,000 tab for repaving the streets. They want the roadsides cleared and trimmed and the entry signs landscaped. They want their swimming pool.
In the meantime, Blair has assigned Ken Henshaw, a Richmond real estate agent, to sort things out with the property owners. ``We need to let bygones be bygones,'' Henshaw says. ``The doctor's not happy with what's happened down there. He's determined to do whatever it takes to turn things around.''
The property owners and the Hatteras Investment partnership say they want to settle their differences out of court. MEMO: Chris Kidder covers Outer Banks real estate for The Carolina Coast. Send
comments and questions to her at P.O. Box 10, Nags Head, N.C. 27959. ILLUSTRATION: Staff photo by DREW C. WILSON
Hatteras Pines in Buxton is mostly undeveloped, so land prices have
been dropped in an effort to spur sales.
by CNB