Home builder to reimburse Del. buyers

Drew Smith Sep. 23, 2008, 11:53am

Beau Biden (D)

WILMINGTON, Del. (Legal Newsline)--Ryan Homes will be forced to pay nearly $500,000 in reimbursement fees to homeowners living within the company's Townsend, Del., housing community, state Attorney General Beau Biden has announced.

A Delaware Department of Justice investigation found that the Reston, Va.-based developer used misleading marketing practices that resulted in the overcharging of several buyers within the Homeowners of Hearthstone development, the attorney general said.

"The Delaware Department of Justice is standing up for consumers who were misled when making one of the most significant financial decisions of their lives - the purchase of their home," Biden said in a statement. "We're holding the developer accountable to the law and making it absolutely clear that they have an obligation to provide full disclosure to consumers."

At issue is an annual fee of $800 charged to the homeowners for membership to the development golf course. Ryan Homes stated at the time of purchase that the customers were exempt from the annual fee. However, customers were charged the fee once they purchased their home.

According to the settlement agreement, the company will pay the golf-related assessment fee to any homeowners who filed a complaint for as long as the homeowner owns the home.

The company has also been ordered to reimburse each owner $28,858, which represents fees already paid to the golf course, and $25,000 in investigative costs to the Delaware DOJ. Sixty-eight homeowners are eligible for the reimbursement.

The total cost of the agreement is expected to reach nearly $500,000.

The agreement also requires Ryan Homes to inform all prospective home purchasers of golf-related fees and to obtain homeowners' signatures on a receipt and acknowledgement form.

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