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National Home Builder Faces Class Action Lawsuit In Lake Elsinore

“You were provided bad information,” Lake Elsinore City Attorney Barbara Leibold told residents. “Those developer documents are incorrect.

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.

Reverend Smith February 09, 2013 at 12:51 AM
Ya, right. Contact Chavarria first - before you contact a lawyer who can get you a just settlement instead of being bought off by the builder for chump change.
Ann February 09, 2013 at 04:23 AM
Very sad! Big business always taking advantage of people including the elderly:(
Antonio February 09, 2013 at 03:45 PM
The Democrats attempt to protect consumers and control Big business by enacting laws like the Consumer Financial Protection Agency. Republicans try everything in their power to obstruct government from regulating business and protecting consumers from predatory businesses. Sad but true.
Arthur Spooner February 09, 2013 at 05:21 PM
Really Lyn?? The democrats elect the the crooks who steal from the tax payers. Get it right! I am one of these home buyers on this list. You better bet, we will win! Not giving the tax takers another dime!
dianne chavarria February 09, 2013 at 09:38 PM
i'm not sure if this was for or against me, Reverend Smith, but please rest assured we are doing everything possible to move forward with getting the city and the builders to do the right thing for the people in our Community Facilities District. Call me if you'd like to discuss this, i welcome feedback. thank you, Dianne Chavarria
dianne chavarria February 09, 2013 at 09:39 PM
Arthur Spooner, i hope you will call me regarding this. thank you, Dianne Chavarria
Arthur Spooner February 10, 2013 at 02:08 AM
Dianne we are talking Centex homes??
kym March 19, 2014 at 03:16 AM
Kelli Yoakum-Morgan 21 mins · Edited · . I am seeking information from someone other then the City of Lake Elsinore, I knew of the issue being addressed, however the property is my Parents and my Dad was the one who took care of all these types issues (with Centex, there have been many). Dad passed and nothing has been resolved, now all warrantees etc. are expired so no one will help me or speak with me. The issues are serious, the earth moving and buckling their cement work, pool, windows no longer open or close properly to name a few. This all started when they made Sunswept a through street and built all of the homes above them. Look at the street, the asphalt has speed bumps in the cul d sac right above them, they are not speed bumps they are quick fix hole patching where the earth and water comes through the asphalt, the earth under the street is NOT stable. The first rain after the grading was done and they replanted the plants they kept, after the build of the first homes above them, brought the hillside down, the pressure crumbled the wall and everything ended up in their pool, filled it up and then over the edge into the home. Any information i could receive would be greatly appreciated. Kelli
kym March 19, 2014 at 03:27 AM
Also, if the community says their paperwork states 20 years and you all have seen it, how can you or anyone else hold the homeowners to your contract, they did not sign your contract they signed their contract.NOT the buyers issue, the City should go over all documents prior to the sale of the homes to ensure they match. To the City of Lake Elsinore, you and all of us were lied to, now I realize this takes money from the city that you may need to make up for, (like the builder).I do not see how it can be the headache of the homeowners involved. We, the home owners moved here, raise our families or are retiring here, spending our money and supporting the city of Lake Elsinore,who is supporting us?

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