Developers/Declarants Breached Contract By Failing To Pave Roads – Corporate/Commercial Law

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United States:

Developers/Declarants Breached Contract By Failing To Pave Roads


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Facts

Plaintiffs are property owners in what were originally three
separate planned communities known as Mystic Lands. Defendants are
the developer/declarant and its sole shareholder, Shinitzky. In
October of 2006 the Plaintiff and his wife entered into a contract
with declarant to purchase Lot 28 in Mystic Ridge. The Property
Information Sheet stated “the streets throughout Mystic Ridge
are private and shall be maintained by the . Association. The
initial capital expense for the streets, including the asphalt,
shall be bourne (sic) by the Developer.” Shinitzky said this
statement represented the intention of the Developer and that other
similar representations meant “asphalt paved roads.”
However the deed described the lot by reference to the plat which
stated “ALL INTERIOR ROADS ARE 14′ GRAVEL.” Developer
did pave some of the roads in Mystic Ridge as the development
progressed, but in 2013, for the first time, Shinitzky stated in a
Property Disclosure Statement that the roads “would be
gravel.”

Suit

In 2015 Plaintiffs filed suit “for judgment declaring the
period of declarant control had expired and injunctive
relief.” A jury held that the purchase contract required the
Developer to pave the roads and that Developer had breached the
contract. The trial Judge granted Plaintiff’s motion for
specific performance requiring Developer to pave the roads.
Developer appealed.

Appeals Court

Developer literally raised what seems like every possible
defense, including (1) there was no valid contract to pave the
roads; (2) the statute of limitations had passed, (3) novation, (4)
estoppel, (5) waiver (6) laches, and (7) acceptance of the deed
barred the specific performance claim. Although the case involved
other issues as well, including the calculation of the time that
Developer could maintain control, in the end the Appeals Court
affirmed the trial court judgment on both the breach of contract
for failing to pave and for an injunction preventing Developer from
further exercising declarant control.

LESSONS:

  1. If you sign a contract stating that you will pave roads or that
    roads will be paved, people will hold you to your word, even if
    other documents say something to the contrary; and

  2. When you are the one who wrote the condominium documents and
    the Property Information Sheet, the inconsistencies will likely be
    interpreted against the drafter of the documents.

Anderson v. Mystic Lands, Inc. 852 S.E. 2d 735
(2020, Fla)

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