Local Builder filing Bankruptcy (short sale, real estate, insurance)

[bward]

I received a call from a friend in charlotte saying that St. Lawrence filed for bankruptcy yesterday (1/22/09). Has anyone heard this? I hope this is not true because we were having a house built in one of their subdivision and they still have some of our money. In the long term what does this mean.

[saturnfan]

Originally Posted by bward

I received a call from a friend in charlotte saying that St. Lawrence filed for bankruptcy yesterday (1/22/09). Has anyone heard this? I hope this is not true because we were having a house built in one of their subdivision and they still have some of our money. In the long term what does this mean.

Bad things were being heard about liens.

Your recovery or home completion depends on the type of bankruptcy. If Chapter 11, your home may get built when the company gets affairs in order. If Chapter 7, your deposit will most likely be lost with a very small chance of any partial recovery as an unsecured creditor.

[JimmyO]

It is cause for concern, obviously, but don't panic yet. They're probably filing for bankruptcy protection, to allow them to continue business while they sort out their finances. Not knowing a thing about the details, I would advise that your next two phone calls be to your agent and then a real estate attorney to figure out exactly what your rights and responsibilities are now. I am currently building a home myself, with another local company, so I can understand how you must be feeling right now. Good luck!

[VickiR]

Originally Posted by JimmyO

It is cause for concern, obviously, but don't panic yet. They're probably filing for bankruptcy protection, to allow them to continue business while they sort out their finances. Not knowing a thing about the details, I would advise that your next two phone calls be to your agent and then a real estate attorney to figure out exactly what your rights and responsibilities are now. I am currently building a home myself, with another local company, so I can understand how you must be feeling right now. Good luck!

Alot is going on with St. Lawrence, including their subs not being paid. Hopefully, your agent has knowledge on what needs to be done but I'd strongly recommend you contact a RE Attorney asap. Don't panic.

Vicki

[dansdrive]

So is it true or just roomer or speculation about St. Lawrence? I heard other smaller local builders are in trouble too. Some have stopped building until they sell what they have on the market or get a contract in hand.

[VickiR]

St. Lawrence has unpaid subs that have filed liens against the builder. These are unfinished homes. St. Lawrence's finished homes can be sold if there are no liens against the house, as long as the offer is enough to cover what they owe on the house. If the offer isn't enough, the house can be sold as a short sale IF the lender agrees.

I understand that St. Lawrence is trying to re organize.

I only know this because I had a client that wanted to purchase a St. Lawrence finished house. He decided to move on because of the time restraints in dealing with a short sale.

I do not know what will happen if you are under contract with St. Lawrence as I have heard that they can't do any more building until their re organization.

Vicki

[bward]

Thanks for your input it was very helpful. I see they have a model that I would like to purchase but they are playing hardball. The model is just sitting there full of furniture and they don't want to come down on the price. I heard that kids are playing around the empty (no agent on the premises) house. I hope they do not break any window or do major damage because then I won't want it either.

I hope things work out for the company because they build a very nice house.

[bward]

Thanks for your input it was very helpful. I see they have a model that I would like to purchase but they are playing hardball. The model is just sitting there full of furniture and they don't want to come down on the price. I heard that kids are playing around the empty (no agent on the premises) house. I hope they do not break any window or do major damage because then I won't want it either.

I hope things work out for the company because they build a very nice house.

[MI-Roger]

All recent purchasers, i.e. maybe the last 2 years, of a St Lawrence home should consult a RE Attorney, ASAP. Contractor Lien laws and Real Estate laws vary from State to State, but a similar thing happened in MI a few years ago.

A Lumber Yard in Flint MI was failing because they were not paid for the lumber used in a number of homes by a pair of financially troubled builders. The builders never obtained Waivers of Lien from the Sub-Contractors or Material Men. The Lumber Yard, in a desperate act to avoid bankruptcy themselves, then filed Liens against the purchasers of the completed homes for the value of the building materials provided.

Since the home owners did not have Waivers of Lien either (what home owner whould have thought they were necessary?) (what home buyer even knows who the subs or suppliers are?) and the Title Insurance Policy only protects the Mortgage Company (not the home owner! - Surprise!) these home owners were faced with paying for the building materials in their new homes twice!

Call a RE Attorney soon! Attorneys usually offer a free consultation during which you should learn whether you have any need to fret, and what actions to take to protect yourself.

The Real Estate Professionals who frequent this board may also be able to shed some light on Lien Law and Real Estate Law in NC.

[saturnfan]

There is a 120 day time limit in NC.