When Alex Oleksy and his young family moved into an unfinished subdivision in Mooresville, North Carolina, he looked forward to peace, quiet and beautiful surroundings.
He got quiet all right. Eerie quiet. And the view? Half-built homes with fraying housewrap, rusting construction materials and other eyesores. It’s like a subdivision ghost town.
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“Very unexpected,” Alex Oleksy told WCNC. “You see rods sticking out. You see tall grass. There’s a roof being held by a 2×4. Looks unstable.”
It’s the same for other homebuyers who purchased new-build homes from Helmsman Homes and Nest Homes in Mooresville and nearby Statesville. These builders, both connected, ran into financial difficulties.
That led to work stoppages as subcontractors demanded payment for their work. As work stalled on the subdivisions, unfinished homes were left vacant, and deteriorating, for a year.
Homes sit unfinished for months
“Doesn’t look good, does it?” said Dolphus Lee, a Marine veteran and homeowner in a similarly half-built neighborhood in Statesville. “I’m upset, but ain’t nothing I can do about it.”
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Homeowners have heard little from the developers.
But contractors, including masonry and roofing companies, have filed lawsuits against both Nest Homes and Helmsman Homes, with claims that the developers owe them a combined total of $1.7 million.
According to Iredell County’s director of building standards, the companies have shuttered and the remaining properties are now owned by mortgage companies and banks.
That leaves homeowners like Oleksy and Lee — who’ve waited months hoping their subdivisions will be completed — in limbo. Now, there’s light at the end of the tunnel.
Another developer has stepped in to finish building the homes in Olesky’s neighborhood. Homeowners like Lee hope something similar will happen in their subdivisions.
Tread carefully when buying a new-build
The situation is instructive for anyone looking to buy into a new subdivision.
“Buyers need to be aware of buying into a neighborhood that’s not complete,” attorney and real estate expert James Galvin told WCNC.
“You can’t treat that purchase the same way as you’re treating a purchase in a finished neighborhood. You’re going to really want to kick the tires.”
Here are some tips on how to do your due diligence on a new development.
Seek out reviews of the developer to get an idea of how homeowners like working with them. Consumer review sites like Consumer Affairs often have customer reviews on popular builders.
Request a copy of the developer’s financial statements. Comb through the details to confirm whether the company can afford to finish building and maintaining the community.
Be wary if the HOA fees are especially low. That’s because developers own the HOA until the development is completed. Low HOA fees may indicate that construction is stalled.
Look for lawsuits in the builder’s past, ongoing litigation or signs of financial mismanagement. You might even consider hiring an investigator to dig deeper.
Take red flags seriously.
Finally, if you decide to move forward, keep a solid emergency fund on hand. If something goes wrong, you want to be able to rent a place to call home until you sort out any unexpected issues.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
