This young couple with super credit scores bought their first home from a builder in 2004. They paid their mortgage and taxes on time for six years. Then a knock at the door. “Your house is on my lot”
Palm Coast, FL – November 6, 2014 – For six years, Robin and Steve Sampson enjoyed their Palm Coast home at 21 Luther Drive. They had purchased the modest 1,316 SF three bedroom, two bath home from Village Homes Construction, the builder, in 2004 for $126,900. All of the paperwork was in order; sales contract, deed and legal description, survey, utility hookups, mortgage and title insurance. Life was good until 2010 when Louis DeSantis, of Coral Springs, knocked on their door to tell them that their house was on his 23 Luther Drive lot. Robin and Steve’s lives would be changed forever.
It was Sampson’s first home. Both had excellent credit scores and they always paid their bills on time. They grew up in St. Augustine but chose Palm Coast because it was more affordable. They loved their house. DeSantis announcement came with a demand for a substantial amount of cash to accompany a lot swap. If the cash was not forthcoming, DeSantis would sue to have them ejected. Apparently the thought of a free house or windfall profit was too strong.
The problem of a house built on the wrong lot is not uncommon. There are several legal precedents. The courts do not allow the lot owner to benefit by having a free home on his lot. That would constitute what lawyers call “unjust enrichment.” Like most homes in Palm Coast, the house is built of cement blocks on a concrete slab. It cannot be moved.
Swapping lots seems the most appropriate and most common solution, although both parties incur costs associated with sorting out the paperwork. Documents have to be redone to reflect the correct addresses and legal descriptions. In many similar cases, the lot swap is accompanied by an exchange of cash.
Where should the money come from? Neither lot owner is at fault. Both are innocent victims of someone else’s error. Clearly, the builder, as general contractor, has liability. So does the survey company that staked out the wrong lot in the beginning. But six years and one housing bubble after the house was built, both the builder and survey company had gone out of business.
What about the title insurance company? Sampsons did have insurance, but their claim was denied since the policy did not apply to 23 Luther Drive where their house stood. It warranted clear title to Sampson’s vacant lot at 21 Luther Dr, There was no title defect associated with 21 Luther Dr.
Repeated attempts by Sampsons and their attorney to contact GMAC Mortgage, the mortgage lender, were unsuccessful. To get the bank’s attention, Sampsons finally stopped making their mortgage payments. DiSantis initiated legal proceedings against the couple in January 2012. The lender filed for foreclosure in February 2013.
When negotiations with DiSantis appeared fruitless, Sampsons contacted a consumer affairs reporter at Orlando Channel 9 TV. The station ran a news segment illustrating their plight. As a result an Orlando attorney offered to handle their cast pro bono. Still, their plight remained under the radar in Palm Coast.
Just when you think things can’t get any worse, they do. Steve Sampson had to shut down his motorcycle repair business due to a contract dispute with a customer. The financial vise tightened further.
Robin contacted me after she read my GoToby.com story, Million Dollar Home Built on Wrong Lot in Ocean Hammock, NE Florida published a month ago. That story generated international headlines and was read by thousands around the world. Why had Robin and Steve’s story escaped notice? Their home is not worth a million dollars. But the tragedy of their builder’s error is no less devastating.
The million dollar house on the wrong lot resulted from an error in the original survey. Everybody down the construction sequence from there relied on the survey’s accuracy. That house was completed and occupied for six months before the error was discovered. Sampson’s situation arose from the same set of circumstances. Ironically, the street addresses, 21 and 23, are the same in both cases.
After four years facing their problems and ten years after buying their home, Sampson’s are giving up on the fight. They are hitting the reset button. They are still unable to find someone at the lender who has the authority or willingness to help them. They feel the justice system has let them down; both with the wrong lot issue and with Steve’s business struggle. They will likely let the house go to foreclosure, declare bankruptcy and move back to St. Augustine, leaving the unraveling to others.
And unraveling won’t be easy. The lender’s mortgage is on 21 Luther, a vacant lot. They will naturally expect to take title and sell the house and lot to recover some of their losses. I’ll bet they will be really surprised to find the subject house is not on the mortgaged lot, but on the lot next door.
The lender’s cost to fix this mess will be several times higher than the cost would have been had they simply dealt with Robin and Steve fairly and on a timely basis. DiSantis will probably wish he had acted more appropriately as well.