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Not really familiar with these (MDs). How does one find out if a property is in one before looking at or purchasing it?
Demand full disclosure from the realtor who is representing the property. Also ask the realtor if anyone has been murdered, or has a serious crime taken place in the home you're interested in buying. And, always get to know your future neighbors before signing the contract...usually a great source for information.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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for FULL disclosure... Take it a few steps further than a realtor (acting in self interest / no legal obligation / not knowledgeable (can plead ignorance) )
Review title report in detail / encumbrances
Review any HOA / accompanying facilities that have claim to "use of property".
Always pay a visit to the:
1) County / City planners
2) Tax assessor
3) Law enforcement
4) EMS (Fire and medical)
5) Library district
6) Schools
Dig up the total information yourself. or hire a professional (not a realtor) to do it for you.
A good Real Estate lawyer will cost about 1/10th - 1/20th the going 'realtor rate'.
A lawyer can Advise You (which a realtor cannot).
"For the past five years, residents of the Thompson Crossing Metropolitan District in Larimer County who sell their homes have paid the district a fee. At Thompson Crossing, the transfer fee is 0.5% of the sales price, so a house that sells for $250,000 would owe a $1,250 transfer fee to the district.
Three-quarters of that amount — or $937.50 — goes to the developer to help cover expenses for building the community.
The rest, about $312, goes into a nonprofit foundation at the metro district that is called the Thompson River Ranch Foundation."
I had never heard about such fees.
This whole thing stinks of political corruption. If I "own" a house, what right do you have to force me to pay you a fee when I decide to sell?
"In 2016, a neighbor posted a seemingly simple question in a community social network online: “Why do my taxes keep increasing?”
The effort to answer that question took me on a three-year journey that exposed the depths of special-district abuse not only in my community — Solterra — but also across Colorado. The thread on Nextdoor led to my first meeting a week later with neighbors and a resident appointed by the developer to the Solterra special-district board. He was there to “monitor” the conversation (his words).
An hour later, the message was clear: Residents won’t understand. They won’t care. Don’t rock the boat.
I left my neighbor’s home smiling. I’m still “rocking,” and won’t quit until I stop special-district abuse.
So what was the developer of Solterra, Brookfield Residential, trying to hide?
As of Dec. 31, 2016, Solterra residents — according to Brookfield’s own presentations and documents outlining bonds issued over the years — had paid the developer a total of $21.2 million in interest and $7.1 million in principal on a $55 million advance from the developer. This was part of an agreement that Brookfield made with itself to have taxpayers pay for development expenses plus 6% interest. In addition, taxpayers have continued to pay between 4.5% and 7.25% on the bonds issued to repay a portion of the Brookfield loan, which, according to the bond documents, will cost $36 million in interest over the life of the bonds.
How could such a fiscally imprudent thing happen with taxpayer dollars?
Lakewood created the Solterra metropolitan district in 2006 — named Fossil Ridge Metropolitan District — on vacant land. Immediately, the “electors” (people who can vote) held an “election.”
It would be the first and only election for the next 11 years.
The “electors” were eight voters, all employees of Brookfield. They voted to eliminate an important right of future residents: the right to vote on their own future taxes.
They gave that right to the board of directors.
And, for 11 years, the boards of directors were Brookfield employees.
Every public election since 2006 was canceled because “no one wanted to run.” “No one wanted to run” because residents were told by many with Brookfield that they couldn’t run until the development was 75% completed. That was untrue.
Since “no one wanted to run,” the Brookfield employees continued to appoint themselves to the boards. And for those 11 years, the Brookfield employees voted four times to issue bond debt.
Directors of the board also voted in 2006 to set a limit on how much future Solterra homeowners would be taxed to pay off the “loan” from the developer — a modest $4.9 billion when you add up principal and interest over the next three to four decades.
The good news is that my neighbors in Solterra woke up. They did understand. They did care. And they rocked the boat.
In May 2017, 26 residents knocked on doors and obtained 749 signatures to recall the Brookfield employees off the Solterra boards. A couple of nights there was a line outside our front door to sign petitions.
We later discovered that Brookfield planned to issue another $30 million in bond debt in June 2017. But the bond counsel told them they could not possibly sell the bonds. You see, the bonds tell the bond investors that the residents really like the idea of borrowing all this money and paying all this interest. After all, the explanation was, the residents voted.
Of course, what the bonds don’t say is that there were only eight voters, they all worked for the developer, and that all the scheduled elections since then (for 11 years) had been canceled by the developer. Having to disclose a pending recall petition would kinda muddy the waters.
The recall removed the Brookfield employees from the boards. It also stopped more bond debt, for now.
Solterra is not unique. Special districts across the state are using bonded debt, approved solely by developers who stand to profit, to fund infrastructure. We all must ask: Why special districts? Is there a better way to pay for infrastructure — streets, sidewalks, pipe in the ground?
The most efficient way is for the developer to use his own money because he will spend it in the most efficient manner possible. That cost is included in the value of the lots. This is how developers do it in other parts of the country. This is how they do it here if the developers continue to own the property and in commercial development. (Those customers know the game.)
But the most profitable way to pay for infrastructure is to use the residents’ money through a special district. Still, start with the developers’ money. But now add a profit margin — pick an arbitrary figure. And make it a loan to the future residents. And don’t have them pay it back right away. Have them finance repayment of the loan with another loan: bond debt.
Solterra is now paying more than $2 million a year to pay off this bond debt, and Brookfield wants another $30 million. And we still don’t really know what they spent the money on, or what happened to the money that paid for lots.
During an informal session of three mediation meetings attended by Lakewood Mayor Adam Paul to persuade us to withdraw the recall petition, I asked again. Brookfield’s attorney stated they were still trying to figure it out — 11 years later.
How does this happen? Periodically there are reports of special-district abuse. A local public television reporter broadcast a series in 2008. Castle Pines declared bankruptcy in the late 1980s.
It happens because lots of people make lots of money doing it: attorneys; bond investors with the safest investment available backed by property taxes and equity in homes; an industry of management companies running special-district meetings and special-district organizations; an industry of special-district engineers running special-district projects.
And local municipalities like Lakewood rely on side deals with the developers to make improvements outside the district boundaries. In Solterra’s case, those were a large dog park, significant improvements to three roads, and more pipe in the ground to pave the way for developing the rest of Rooney Valley. Oh, and contributions to a $20 million highway interchange to facilitate the development of the land around Dinosaur Ridge.
It’s a huge industry built around financing infrastructure to generate more profit, not more value.
At a minimum, here is what every city and county must do to protect future homeowners and to stop the billions of dollars being sucked out of the Front Range, money that could be invested in roads, schools, police and fire.
• Ballot issues. Submit all ballot issues for prior approval by the city or county until the boards are exclusively residents. This should preserve the future residents’ right to vote on their own debt, and hold the developer accountable for actual costs.
• Disclosures. You know more about how your money is being spent when you finance the purchase of a used car than when you purchase a home in a special district. Disclose the total amount of interest being paid to the developer. Disclose the total financing cost. Disclose the loan.
I was smiling almost three years ago because I love our community, and I then knew how to protect it from the unchecked greed associated with its creation: rock the boat.
John Henderson is an attorney and expert on special districts."
My opinion: Force developers to fund the infrastructure development themselves. Otherwise, don't develop.
Thanks for all that spot-on information, Vision67. There is a clear message here, and perhaps the only way to protect yourself in these choppy waters...never consider buying a home in a Colorado neighborhood that is still under construction.
And local municipalities like Lakewood rely on side deals with the developers to make improvements outside the district boundaries. In Solterra’s case, those were a large dog park, significant improvements to three roads, and more pipe in the ground to pave the way for developing the rest of Rooney Valley. Oh, and contributions to a $20 million highway interchange to facilitate the development of the land around Dinosaur Ridge.
One can argue that this is also an example of new residents paying their own way for improvements to minimize the impact they make on current residents and to improve they overall quality of the city. This is a mechanism should appeal to current residents as it does pass off the cost of growth. Not that they necessarily think that way.
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My opinion: Force developers to fund the infrastructure development themselves. Otherwise, don't develop.
They are funding the infrastructure themselves and putting the money upfront. The payback is just different and far more profitable.
One can argue that this is also an example of new residents paying their own way for improvements to minimize the impact they make on current residents and to improve they overall quality of the city. This is a mechanism should appeal to current residents as it does pass off the cost of growth. Not that they necessarily think that way.
New homes should already have the cost of the infrastructure development built into the price of the homes. New residents minimize their impact to current residents by paying the same tax rates as everyone else and adding to an existing tax base with existing coffers.
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They are funding the infrastructure themselves and putting the money upfront. The payback is just different and far more profitable.
That's quite the euphemistic way to say the payback mechanism is a blatant grift by developers.
New homes should already have the cost of the infrastructure development built into the price of the homes. New residents minimize their impact to current residents by paying the same tax rates as everyone else and adding to an existing tax base with existing coffers.
They could, but then those homes would cost an extra $100K or some large-ass figure and that would exclude a **** ton of people from securing the 'merican dream of a large tract house in the burbs. I'm all for making SF housing more expensive to ram home the concept that most American shouldn't own a SF home because they're too goddamn poor to do so. But that's an unpopular position.
At least this metropolitan district model permits citizens to get shiny new houses and it's solidly their own fault if they can't understand what a metropolitan improvement district entails. Solterra is a good example of what happens when residents actually do understand and take action (though it did take an attorney who specialized in the field to do so). Reunion is a good example of people being too goddamn stupid to understand.
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That's quite the euphemistic way to say the payback mechanism is a blatant grift by developers.
One person's grift is another's prudent financial model.
They could, but then those homes would cost an extra $100K or some large-ass figure and that would exclude a **** ton of people from securing the 'merican dream of a large tract house in the burbs. I'm all for making SF housing more expensive to ram home the concept that most American shouldn't own a SF home because they're too goddamn poor to do so. But that's an unpopular position.
At least this metropolitan district model permits citizens to get shiny new houses and it's solidly their own fault if they can't understand what a metropolitan improvement district entails. Solterra is a good example of what happens when residents actually do understand and take action (though it did take an attorney who specialized in the field to do so). Reunion is a good example of people being too goddamn stupid to understand.
One person's grift is another's prudent financial model.
So you fall back on the "to be fair, they let themselves get screwed" defense. Yikes.
As wasteful as suburbs are, infrastructure is affordable when slimy developers aren't underhandedly tacking on two layers of high interest debt payments then lying about it.
It's kinda horrifying to think that there are people out there who see the world as zero-sum then celebrate dishonest accumulation of wealth.
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Transfer fees?
