Officials with a national home building company say they are looking into allegations by some Lake Elsinore residents who claim they were bamboozled by the giant builder.
Nearly 100 residents turned out Jan. 31 during a public meeting at the Lake Elsinore Senior Center with paperwork in hand showing that Centex, which is now part of Michigan-based PulteGroup Inc., may have misrepresented the terms of their Mello-Roos.
The residents are part of Lake Elsinore's Community Facilities District 88-3, a swath of the city that has more than 2,000 homes surrounding McVicker Canyon Park. Residents there say the Mello-Roos tax they are paying is lasting longer than what was disclosed to them when they bought their homes. Many thought the tax would end in 2012, others claim they were told dates such as the year 2015 or 2017.
City Attorney Barbara Leibold maintains all documents filed with city clearly show the tax continues until the year 2020.
“The city claims the bonds were always for 30 years, and all the builders told everyone the taxes would only be for 20 years,” said resident Dianne Chavarria.
Builders form Community Facilities Districts to seek public financing through the sale of bonds. The financing pays for public improvements and services in the community, such a schools, parks, etc. Those living in a CFD pay off the bonds through special taxes commonly known as Mello-Roos.
Chavarria has spearheaded an effort to reach out to her neighbors who may have been sold a bill of goods and is gathering paperwork to prepare for what is expected to be a class action lawsuit.
“You were provided bad information,” Leibold told residents, some of whom bought their homes 20 years ago when sales in the development first began. “Those developer documents are incorrect. They [the builders] had a legal obligation to disclose accurately the Mello-Roos.”
On Feb. 1, Patch contacted PulteGroup and as of Feb. 7 company spokeswoman Jacque Petroulakis maintains, “We are still looking into the matter.”
Centex is one of several builders named in CFD 88-3, however it appears they were the master builder and the first to sell homes there.
In 2005, a Los Angeles group of homeowners won a settlement in a class action lawsuit that claimed developers misrepresented the residents' tax liability under Mello-Roos and disclosure laws. A total of 164 homes in the Sonata and Whispering Oaks developments in the City of Saugus were involved, with the buyers claiming their Mello-Roos tax had been erroneously disclosed by Haskell Canyon Ranch LLC/Curtis Development Corp./Curtis Ventures Inc. As part of a settlement agreement, the defendant was ordered to compensate the homeowners.
Curtis Development Corp. has been linked to Curtis-Elsinore Ranch Company, which was attached to one parcel in Lake Elsinore's CFD 88-3. Chavarria said she is not aware of any homeowners who purchased from Curtis-Elsinore and attempts to reach Curtis Development Corp. have been unsuccessful.
Meanwhile Chavarria has asked that any homeowners who feel they may have been cheated reach out to her at (951) 245-0049.