This article entitled “Some buyers sue to get out of condo deals” appeared in the Tennessean on March the 18th, 2009. The author is Naomi Snyder:
Now that many condo developers are finishing up work on their buildings downtown, buyers are seeking relief from the courts to get out of buying them.
Several Nashville-area residents filed a lawsuit Thursday in Davidson County Chancery Court against the developers of the 22-story Icon in the Gulch, saying the developers violated the terms of their purchase contracts and federal law.
The plaintiffs, Franke Elliott, David Haley, Scott Williams, Terry Miller and Deborah Williams, are seeking to cancel their contracts and get their earnest money returned, plus punitive damages and attorneys’ fees.
The developers of the Icon’s next-door neighbor, Terrazzo on 12th Avenue and Division Street, got slapped with a lawsuit earlier this month in U.S. District Court from another potential buyer seeking to get out of his contract, also saying the developers violated federal law.
Last month, several buyers in the Braxton Condominiums project at Harpeth Shoals Marina in Cheatham County sued to cancel their contracts, saying the developer failed to live up to promises made.
Buyers in all three projects say the developers failed to finish the developments on time and they shouldn’t have to close.
Attorneys expect more lawsuits to follow as developers press down on buyers who signed contracts but haven’t closed.
In some cases, buyers are having trouble getting financing as the values of their properties have fallen below what they agreed to pay, said Jean Dyer Harrison, the attorney representing the Icon buyers.
“Anyone buying a condo unit, if you are going to get a mortgage, the comparable sales are not there,” she said. “The values of those units are down.”
Disclosures are issue
In some cases, the condo contracts didn’t allow buyers to get out of their contracts if they couldn’t find financing.
But that’s not a point addressed in the condo lawsuits filed this month. Instead, lawyers are arguing that the developers of the Icon and the Terrazzo violated the terms of the Interstate Land Sales Full Disclosure Act, which requires multiple disclosures to buyers in some types of sales.
Health-care executive Franke Elliott, who is suing the Icon, said he attended a frenzied pre-sales event in April 2006 at which buyers were encouraged to claim condos and sign contracts the same day, to avoid missing out on a favorite unit. He said he signed a contract that day for a one-bedroom condo in the Icon, agreeing to pay $205,850.
“There was not a lot of time to deliberate,” he said. “There was no guarantee they would hold a condo for you.”
He put down $5,000 in earnest money with a cashier’s check.
Elliott said the developer then collected his contract but took six months to countersign it.
“Why it took them six months to countersign my contract is somewhat of a mystery to me,” he said.
Now, his attorney is arguing in the lawsuit that the developers failed to complete the unit within two years of his signing the contract, in violation of the terms of the contract and the Interstate Land Sale Act, which requires developers to publish certain disclosures if they don’t finish within two years.
“The Icon has denied that the units were not ready and instead claimed that the date of the contract was not from the date of the acceptance of the funds, but from the much later return of the contract by Icon,” the lawsuit says.
CEO: Obligations met
Charles Carlisle, chief executive officer of Franklin-based Bristol Development Group, developer of the Icon, issued a statement saying the lawsuit is a “direct response to our efforts to compel these individuals to meet their obligations and close on the condominiums they contracted with us to build for them.”
He said Bristol fulfilled its obligations under the contracts.
“We have been proactive in trying to work with every buyer to resolve any particular issues they have and will continue to work to obtain a mutually satisfactory result for all parties involved,” he said.
He declined to address the specifics of the lawsuit. About 125 buyers have closed on purchases in the 417-unit Icon.
The next-door Terrazzo is finishing work on the first six floors and should begin closing contracts at the end of this month, said Anita Bailey, a spokeswoman for the developer, Crosland LLC of Charlotte, N.C.
Crosland declined to comment on the lawsuit against it.
View all condos for sale in the Icon in the Gulch


April 30, 2009, 9:57 am
I heard the sales prices are not being listed on MLS for some of the condos downtown. I think as of Monday the lenders/developers will not be able to hand pick the appraisers…new federal law. Also heard an appraisal firm in town came in at 60% of sales price and they were not asked to do any more.
i think this could be an issue if appraisals start coming in lower than the purchase prices then nobody will be able to get financing
Any thoughts??
April 30, 2009, 4:57 pm
I heard the sales prices are not being listed on MLS for some of the condos downtown. I think as of Monday the lenders/developers will not be able to hand pick the appraisers…new federal law. Also heard an appraisal firm in town came in at 60% of sales price and they were not asked to do any more.i think this could be an issue if appraisals start coming in lower than the purchase prices then nobody will be able to get financingAny thoughts??
April 30, 2009, 4:57 pm
I heard the sales prices are not being listed on MLS for some of the condos downtown. I think as of Monday the lenders/developers will not be able to hand pick the appraisers…new federal law. Also heard an appraisal firm in town came in at 60% of sales price and they were not asked to do any more.i think this could be an issue if appraisals start coming in lower than the purchase prices then nobody will be able to get financingAny thoughts??
May 14, 2009, 6:38 pm
The rabbit hole goes deeper. You may soon find out more of the truth. THE CURTAINS ARE ABOUT TO BE DRAWN BACK…. comming soon…
May 15, 2009, 1:38 am
The rabbit hole goes deeper. You may soon find out more of the truth. THE CURTAINS ARE ABOUT TO BE DRAWN BACK…. comming soon…
May 14, 2009, 7:49 pm
To answer the first comment, yes, banks can no longer hand pick the appraiser. In fact, appraisers are assigned from a ‘blind pool’ so you might get an out of area appraiser who does not know the area’s values well. This is being done in an effort to take lender steering out of the process.
I am not aware of a single condo in downtown that has appraised for 60% of what an individual paid, but I am painfully aware of several condos that appraised for 10-15% less than what the owner paid and/or contracted the condo for originally.
As to the second comment, please elaborate. I have heard many conspiracy theories in the past so nothing with offend me.
May 15, 2009, 2:49 am
To answer the first comment, yes, banks can no longer hand pick the appraiser. In fact, appraisers are assigned from a ‘blind pool’ so you might get an out of area appraiser who does not know the area’s values well. This is being done in an effort to take lender steering out of the process.I am not aware of a single condo in downtown that has appraised for 60% of what an individual paid, but I am painfully aware of several condos that appraised for 10-15% less than what the owner paid and/or contracted the condo for originally.As to the second comment, please elaborate. I have heard many conspiracy theories in the past so nothing with offend me.
May 15, 2009, 2:49 am
To answer the first comment, yes, banks can no longer hand pick the appraiser. In fact, appraisers are assigned from a ‘blind pool’ so you might get an out of area appraiser who does not know the area’s values well. This is being done in an effort to take lender steering out of the process.I am not aware of a single condo in downtown that has appraised for 60% of what an individual paid, but I am painfully aware of several condos that appraised for 10-15% less than what the owner paid and/or contracted the condo for originally.As to the second comment, please elaborate. I have heard many conspiracy theories in the past so nothing with offend me.
August 10, 2009, 3:45 pm
August 14, 2009, 1:13 pm
August 17, 2009, 6:20 am
October 20, 2010, 8:23 pm
Interesting story in today’s NY Times regarding the Interstate Land Sales Act and how buyers are trying to use it to get out of contracts with developers after the bottom fell out of the real estate market, also known as buyer’s remorse. I know several lawsuits were filed in Nashville seeking identical relief, but the last I heard the Court of Appeals held these disputes were subject to arbitration and dismissed the court cases. Do you know the current status of these matters? If I’m not mistaken, reluctant buyers sued the developers of Icon, Terrazzo, Braxton, and possibly other projects using this theory.