ST. LOUIS (KMOV.com) -- If you own a home, you know that the value isn’t what it used to be. There are plenty of reasons why, but some owners complained to News 4, blaming their homebuilder.
News 4 found out that some subdivisions are changing the rules in order to sell houses. The sign at the entrance of Harter Farms subdivision in Jefferson County used to say ‘homes from the 170’s - 200’s, but when the economy faltered and people stopped building, McBride & Sons dropped its prices. It’s a sign of the market that homeowners say is killing their future.
“The biggest concern is the value of my home,” Kyle Clark, a new homeowner in Harter Farms, said.
Home prices have been taking a hit ever since the economy tanked, but homeowners in Harter Farms believe their builder is blame.
“We were all promised, based on this sales literature, that this is what the development is going to be like, and then it changed dramatically,” Rick Lamborn, homeowner in Harter Farms, said.
It’s called an indenture of trust. It establishes subdivision rules, including the size houses must be. McBride slashed the size restrictions by 25 percent simply by changing the rules.
“You’re expecting one thing,” Lamborn said. “Then it’s almost like a bait and switch.”
But here’s the catch: it’s perfectly legal. So long as the builder owns one lot in a subdivision, they can change the rules at will. Homeowners say that clause is buried 30 pages deep and only available upon request. They tell me that they wish they would have done their homework.
“If somebody would have come to you and said, ‘oh you just bought a beautiful new home, it’s nice and big but people are building smaller homes that are worth less and that’s going to affect your home value and cause the value of your new home to drop,’ I never would have bought a house in this subdivision,” Clark said.
McBride & Sons’ CEO John F. Eilermann Jr. sent me the following statement:
“McBride & Son Homes has proudly built homes for St. Louis families for over 65 years. Mr. Lamborn is not a McBride customer and in fact bought a home from a builder that went out of business. The employee owners of McBride & Son are proud to have been chosen to take over the project and have done nothing illegal or improper. Changes in indentures are common in practice and totally within our rights.”
“I feel foolish for not reading the entire indenture,” Lamborn said.
Homeowners say there’s a lesson here for everyone: read and know before you sign.