People who bought overvalued lots at two coastal real estate developments in Carteret and Onslow counties will get to recoup some of their money, thanks to efforts by the state attorney general.
A consent judgment approved in Wake County Superior Court will force the defendants involved in a real estate scheme to pay 2.28 million dollars for refunds, according to officials.
The Attorney General's office alleges that some sales agents marketed lots in Cannonsgate in Carteret County and Summerhouse in Onslow County as good investments, giving buyers the impression that they could re-sell the lots quickly for a profit.
The state alleged that sales agents also sometimes unfairly led buyers to believe that it was urgent that they buy immediately or the lots would be unavailable, and they advertised "developer pricing" to make buyers think they were getting a discount when they were not. In addition, officials alleged agents were involved in flip transactions where other sales agents simultaneously bought lots and re-sold them for a substantial profit, using funds from the sale to pay for the initial purchase.
Also included in the consent judgment were conditions that the developers and marketers behind Cannonsgate at Bogue Sound and Summerhouse at Everett Bay are barred from misleading any future buyers about the value or investment potential of lots offered for sale in North Carolina.
According to the Attorney General's office, the defendants that agreed to the refunds and changes are Randy Allen, William (Gary) Allen, R.A. North Development Inc., Southeastern Waterfront Marketing, R. Douglas Therrell and Michael Woolard.
A release states: "R.A. North of Charlotte was the developer for Cannonsgate in Carteret County, and R.A. North I was the developer for Summerhouse in Onslow County. Randy Allen managed and controlled the operations of both R.A. North and R.A. North I. Southeastern, managed by Gary Allen of Florida, marketed and sold lots in both locations. Kenneth Bednar of Nevada and Michael Woolard of North Carolina participated in sales operations at Cannonsgate and Summerhouse. Bednar purchased a lot in Cannonsgate, as did R. Douglas Therrell of North Carolina."
The Attorney General's Office will contact consumers who may qualify for refunds. Consumers who have questions can contact the Consumer Protection Division at 1-877-5-NO-SCAM toll-free within North Carolina or (919) 716-6000.
To be eligible for a refund, a consumer must:
· Have purchased a lot in Cannonsgate or Summerhouse from or through one of the defendants or their agents;
· Be the current owner of that lot or have been the owner at the time of foreclosure, deed in lieu of foreclosure, or some other distressed sale;
· Not be an owner, shareholder, member, manager, employee, agent for or a relative of any of the defendants;
· Not have received a discount on the purchase price of the lot. "Discount" is defined as any amount that was deducted from the purchase price on the HUD-1 Closing Statement. It does not refer to any amount of money received at closing or outside of closing to assist in making monthly mortgage payments for a period of time; and
· Be able to submit a signed copy of the HUD-1Closing Statement from purchasing the property.