Homebuyers worried after one of Triangle's biggest builders says it's 'broke'
Posted June 24, 2015 6:52 p.m. EDT
Updated June 25, 2015 6:11 p.m. EDT
Raleigh, N.C. — Countless homebuyers across the Triangle are trying to figure out what to do next after their builder, ForeverHome, appears to have suddenly shut down. Signs posted on the doors of their model homes warn, “No trespassing. Property repossessed by owner."
Joelle Andrews and her husband planned to build a townhome in Raleigh's Lynwood Bluff neighborhood.
"We signed all the papers, said yes, we are doing this, here is our check," she said.
The couple put down a $2,500 deposit in May.
"Another two weeks went by, we were wondering what was going on," Andrews said. "Then at the four to five week mark, our Realtor notified us that things seemed to be going south and we should probably start to worry. Maybe even back out."
ForeverHome has multiple communities across the Triangle and Wilmington with new homes ranging from $180,000 to more than $800,000.
"There was no reason to suspect anything," Andrews said.
Danielle Cheek-Smith and her husband ran into a similar problem with their new home in Durham's Brightleaf neighborhood.
The couple put down $3,000 in March and planned to move in April. The home is built, but the interior is still just drywall and bare floors.
WRAL's 5 On Your Side spoke with ForeverHome's attorney, Ben Clifton. He said the company is "broke" and described the issue as a "cash flow problem," and said the company was "scrambling to figure it all out."
However, in a statement sent to WRAL Thursday, Mark Ward, a partner with ForeverHome, said the attorney misspoke.
"ForeverHome LLC fully intenders to complete all of its houses and resolve any deposit issues with any homebuyers," he said. "Although the cash flow issues did result in a slowdown of production and warranty services, the company is working with its lenders and subcontractors to re-start construction and complete all houses currently under construction."
"If I were a consumer, I would try really hard to do all I could to get my money back," said James Vann, an attorney who handles real estate law, but is not connected to the issues with ForeverHome.
He said an option would be for buyers to try to file a request to terminate the contract to get their money back. Otherwise, the buyer may have to consider the amount of money paid so far, and assess whether it is worth pursuing in court.
"It will not be simple, and it will not be quick," Vann said.
Andrews and Cheek-Smith both canceled their contracts, and hope to get their deposits back. They’re still startled by the troubles surrounding ForeverHome.
"This is not the kind of thing that sneaks up on a corporation overnight," Andrews said. "They must have seen it coming. They should have planned better."