Palm Coast Tidelands Article Stirs Controversy

It stirred the pot, bringing more reader comments than most news stories.

December 5, 2007Palm Coast, FL – I expected the story about the two Tidelands condo owners who were exploring a legal avenue to redress the loss in value of their Tidelands units would get some attention. I was not disappointed. To date, there have been nine reader comments with opinions on both sides of the issue, also some phone calls and emails. And I’m sure the phones at Centex have been busy. My intent was not to paint a target on Centex’s back but to raise an issue to the surface and let it churn a bit.


I see a parallel between the current real estate market and the stock market’s post bubble. Some people, among them many who had done very well while the market was rising, suddenly decide that those who gave such incredibly astute and profitable advice in the past were really liars and thieves all along. Today, developers have become the bad guys while the lawyers sport white hats. But, as I’ve said in a previous commentary, "Developers don’t create speculators any more than casinos create gamblers. Casinos are built because gamblers already exist."


Everyone has a set of “happy ears.” We hear what we want to hear. We are especially fond of hearing anything that helps rationalize what we want to do. Sales people naturally paint their product in the best light. That’s their job. Sales people and happy ears – the perfect storm. When things turn out well, there aren’t problems. But when they don’t, it becomes an “I said/you said” argument with both sides relying on recollections, the accuracy of which can be tainted by emotions and the passing of time. That is why we have written contracts.


Verbal representations cannot be relied upon because they are probably made by someone unauthorized to make them. The Centex contract had a place where you could write in any oral statements on which you relied to make your decision. Centex would then have had the option of accepting the contract with the added statement(s) or rejecting it. In either case, the Centex decision would have been made by an authorized party. By initialing the page without adding the verbal representations, you accepted the contract “as is.”


Renderings and models (including those of planned amenities) cannot be relied upon in a pre-construction purchasing decision because the developer has not yet applied for building permits for them. The city has a lot of say in how a final plan comes together.


You could argue that a nineteen page contract is too long to read and understand in the heat of closing a sale. That is why the law provides a rescission period, a cooling off period where you can step back and rethink your decision away from the sales person, a time when you can seek legal advice.


I lost money when the bubble burst, a lot of it. I did much better in real estate investments – until my last purchase. I bought a house in August 2005, at the peak, but I didn’t know it was the peak. I paid $280K and put $20K and a lot of sweat equity into it with plans of selling at a profit. My happy ears heard only that the house down the street sold for $183.37 per square foot. At that price per square foot, my property would fetch $355K. Two years later, I still own the house. It’s currently listed at $255K. In the meantime, carrying costs have added up to about $75K. Am I mad about it? Yes, I am, but I’m mad at myself. The decision was mine. It was stupid. It was regrettable, but it was mine.


When someone tells you that they think you may have a case for a lawsuit, are you really listening or are you just listening with your “happy ears?”


7 replies
  1. Paul Martini
    Paul Martini says:

    Happy Ears – Apples and Oranges

    Toby, buying a house to flip it is different from buying a condo to keep it. When I understand your privious writings correctly then a lot of representations have been made to these buyers which now are not being kept. We know that the city people have been deceived – same as the condo buyers. They were promised a golf course, a hotel and a number of other things. So were we, you and I and the city of Palm Coast. I could go on and on – you get my drift. Even if the buyer also wanted to flip the condos – they are still missing the amenities which were promised to them. You got caught by the market – they got cought by the market and a developer who bailed and did not fulfill his promises.

  2. Lee Johnson
    Lee Johnson says:

    Happy Ears with Ear Muffs

    Very well put Mr. Toby. Personal repsonsibility seems to be fleeting in this country, and when it disapears, attorneys seem to always rush in to save us from ourselves.
    Unlike some stocks whose value can drop to a value of zero, real estate will always maintain some value- maybe not the value the investor had \”dreamed of\”, but value neverless.

  3. Ken Long
    Ken Long says:

    Snakes around every corner

    I don’t tread lightly on the commentary you post here because I think you are about as well informed as a person could be regarding the real estate market in Palm Coast and surrounding area. It’s true that a lot of people including myself were trying to catch whatever waves were producing big payoffs. Some of us hit it right, some did not. With family in Palm Coast, I have my own perspective as someone who came down and invested. I was trying to cash in. I was also listening to those who had the knowledge of the local area that I lacked. Time and time again I was told by different real estate agents and title companies that I should forgo using an attorney, that it was an unneccesary expense. For the most part I didn’t listen and used attorneys. Of all the states in the union, Florida should be number one on the required ‘get yourself an attorney’ list before buying real estate. Why the local RE agents would suggest bypassing the use of a lawyer I can only guess was to insure that the deal got done and no snags developed. By snag I mean a good reason not to proceed with the deal. After all, the commissions don’t come as fast when lawyers are reading the fine print. Also, I think you do take it a little too easy on the developers. For example Landmar, which bought three local golf courses, Pine Lakes, Cypress Knoll and Matanzas Woods-where I own some property. Landmar is considering or has decided to shut down the 9th hole on the Matanzas course. I do not own any property on the 9th hole but I am sure that when the current owners bought golf lots/homes, and paid a premium for those lots/homes, they never envisoned their lots/homes being anything but part of a golf course. What’s their recourse? What about the condo owners over at European Village who were promised many more things than have been delivered? How about Citywalk? This project was started in 2004, it’s going to be 2008, STILL NOT DONE. Are the units worth anywhere near what the buyers paid? I am guessing various lawsuits will answer that question but in this market how could any local appraiser come in and meet those numbers? Is the fix in? Who pays? The developers work hand in hand with the local RE esate agents to help market and get commitments from buyers so that the banks are satisfied and the agents can look forward to nice commissions down the road. The unfortunate part is that Centex and Landmar and the developers running Citywalk and European Village and many others can change direction depending on the economic realties they may be faced with. The people who put deposits down and based their decisions on what was promised by those developers, and when, are left to hold the bag when those same developers change course or slow there progress. My advice, if you are buying real estate in Forida, get your self a good lawyer, preferably one outside the county you are doing business in, and never do business without one. Secondly, avoid jumping into a large scale development with too many promises. Generally, some local lawyer working for and with a local developer will draw up a contract that will make it allowable for said developer to take your first born, take ten years to build, retain your deposit even if you died, and do whatever they want, contract be damned in the effort to keep your money and waste your time.
    I exaggerated to make a point. You can be contractually mislead and there isn’t a lot you can do except hire the lawyer you should have hired at the beginning.

  4. BB
    BB says:

    The facts

    People living on Cypress Knoll and Pine Lakes are living on beautiful, newly renovated golf courses with new and renovated club houses. A benefit for which homeowners on those courses paid nothing. Those courses had to be closed temporarily for renovations just like Mantanzas Woods is now. Doesn’t sound like a \”snake\” to me…

  5. Ken Long
    Ken Long says:


    To BB,

    Not that I want get into a he said she said but the lots and homes at Cypress Knolls and Pine Lakes you describe as having benefitted fron the renovations does not yet count for Matanzas. From what I see the slowest renovation yet and neither one of those courses, to my knowledge, had one of their holes moved or closed. It’s easy to talk about the have nots when you are staring down from your perch of have.

    GENE HOLLAND says:


    Toby: Most of us who have invested in real estate when everything was rising with the hope of turning it for a great profit have lost plenty of money.

    When investing, there are very few guarantees of substantial profits.

    LET THE BUYER BEWARE. You put your money down , roll the dice, and hope to come out a winner. Doesn’t always work the way you way you want it to.

    I all boiles down to the age-old adage: LET THE BUYER BEWARE.


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