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Golfcourse Owner Trying to Extort Homeowners

UglySwing

UglySwing

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My in-laws have a nice condo in Palm Springs (Rancho Mirage actually) that backs up onto a pretty nice private course.

They are the original owners (it's about 15-20 years old now).

It is a weekend getaway pad for them, and not their principle residence.

I was just over at their house this afternoon and my father-in-law showed me a letter he just received.

-The course was sold on June 19th.

-Last week all of the condo owners received a letter from an attorney.
-The new owner essentially states the course is losing money and as a result all of the condo owners have 2 options:

1/ buy the course at his cost plus all of his expenses
or
2/ guarantee him a 10% monthly profit, to be paid collectively by all of the condo owners

The letter essentially states if they don't agree to one of the 2 options, he will try and get the course re-zoned for more condo's, or let the course go to crap and leave the condo owners with a view of an abandoned old golf course.

I have a hard time believing someone could make that big a purchase, then only 2-3 weeks later decide that he needs to take such drastic action.

Is this a crazy scenario...or has anyone heard of similar circumstances for homeowners on a course?
 
We stayed at a resort a couple of years ago near Myrtle Beach and the golf course that was adjacent to the resort property had been abandoned due to (I believe) the owner passing away and litigation among the children, or with another partner. Anyways, it was an abandoned golf course. As a golfer it was sad to see, but for an owner of adjoining property, I would think the concern would be more on property values.

I find it interesting that there was such a quick demand on your in-laws following the purchase. It sounds like the buyer either did not do any due diligence or did a very poor job of it.

I would suggest that they either contact an attorney themselves, or get with some of the other owners and get with an attorney to weigh options and check on the legality of what the new course owner is trying to do.

Good luck to them.
 
Sounds like the new owner had no idea what he was doing or this was the plan all along.


Paging Seth...
 
That sounds like it's going to be an ugly situation. Hope all the condo owners get together and come out on the winning side.
 
I'm with Jeff. My guess would be he knew it wasn't a moneymaker, so he planned this all along. He must have had financial records from past years, when making a purchase of this magnitude.

Restrictive covenants may not allow this land to go back to "undeveloped land".

I lived in a restricted neighborhood at one time. Some of the lots were undeveloped, and looked rather rough.

One builder had mowed his empty lots for a few years, then decided to let them grow up.

The homeowners association stepped in and hired a crew to clean up the lots, and sent him the bill.

According to those particular covenants, you couldn't improve the conditions of property, and let it go back to undeveloped.

Hope it goes well.

Let us know,

Jack
 
Sounds to me like he had this planned out. Figures his demands wont be meet and he will be able to turn the course in to more condos which is what he wants. Sneaky Sneaky man.
 
I'm a custom home builder and buy property from developers all the time. I have yet to meet a developer that wasn't a crook. I get what I need from them and stay away from all the other BS.
 
Sounds like the intention all along is to redevelop. If I were to guess, he's banking on the fact that the condo association won't take option 1 or option 2 and then reluctantly agree to redevelopment after fear of living next to an eyesore of a golf course for some time.
 
I agree that he he's either the worst businessman ever, or more likely, this is what he had planned all along.

The homeowners are hiring an attorney to represent them.

Ive ve only been down there once since I got hooked on golfing, and I wasn't able to play the course. It's a nice little course though.
 
I'm not a Florida attorney. Nonetheless, some guidance may be found in HOA bylaws, if there are any, and if they are tied to the golf course. It's just a thought, but it may have an answer.

~Rock
 
Anyone can ask for anything they want but that doesn't mean they get it. The exact nature of this demand is curious. The cost plus expenses seems reasonable and serious but the guaranteed 10% profit is beyond absurd. Hiring a good attorney is a nice first step but all that may end up doing is preventing a worse case scenario, such as building more condos; it's apparent the guy isn't going to maintain and operate the course and I doubt there's anything that can be done about that.
 
Jeff Spicoli said:
Sounds like the new owner had no idea what he was doing or this was the plan all along.


Paging Seth...
Click to expand...
Ditto, Seth can get them #Lawyered!!!
 
I'm a cynic. Sounds like he planned this out. I think he wants everybody to move so he can level the area and develop the land differently. Fewer condos, more houses.
 
blugold said:
I'm a cynic. Sounds like he planned this out. I think he wants everybody to move so he can level the area and develop the land differently. Fewer condos, more houses.
Click to expand...

That's what I was thinking, too. He just wants the land, but IF he can get them to do Option 1, then he won't have to foot the bills for that, and THEN he can (maybe) turn a profit for himself with the golf course instead.
 
Keep in mind that whatever Board he'll have to apply for re-zoning should be sympathetic to a united front of the existing condo owners and their association. He should have to show some kind of unexpected hardship with the current land use. Shutting down a golf course within weeks of buying it (or at least threatening too) shows this was a scheme all along. I know nothing of Florida law or zoning codes but can't imagine the timing of it all will be looked at favorably.

A real estate/land use attorney surely would be the way to go...
 
This is why I believe that regulation of business is so important to the consumer. I've been called "anti-business" because of these beliefs, but this is an example of why I have them.
 
Sounds like some BS. But, if you have a vacation home in Rancho Mirage on a golf course, you likely are mid to upper class financially. The residents need to get together and hire an attorney to look into the situation.
 
If it's one of the older 1950's/1960's tropical styled clubs I could see it being a play to redevelop it and cut it into lots for sure. There is no shortage of them down there and of course RE Developers are Apex predator monsters (usually).


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A local course has sort of done the same thing (but not in a scuzzy way) where they asked the members to allow them to build condos on some of the un-used acreage to continue funding the course operations and the members board voted no, so now the course is closing 9 of their 18 holes (Rocklin Golf Club - Norcal).
 
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