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A Real Estate Agent's Worst Nightmare?

1st Rights of Refusal-What Sellers in Penn Estates Should Know

You may or may not know that the developer of Penn Estates, Cranberry Hill Corp., reserved for themselves, through a Deed Restriction (aka Covenant), the right to purchase properties back at the time they are offered for sale and a buyer is found.  Basically how it works is this:  a seller markets his or her home or lot for sale and finds a buyer.  The buyer and seller negotiate the terms of the Agreement of Sale.  Once all is agreed to and the proper documents are signed, the seller (or their agent or attorney) must advise Cranberry Hill of the terms of the contract.   Cranberry Hill then has 30 days in which to excersise their right to buy the property at the agreed upon terms.  Up until recently, there was a charge imposed for the Release of this Right to be signed, somewhere between $100 & $200, to be paid by the Seller of the property, and no one really thought much of it.

However, not too long ago, Cranberry Hill assigned these Rights of Refusal to another company, Penn Vista Associates.  This company then raised the fee for the signature on the Release to $485, an astronomical amount in my opinion.  Effectively this company seeks to make $40,000+ per year for doing nothing but signing off on 100+ sales a year.  Anyway, I digress.... 

Rougly 2/3 of the homes in our Community are subject to this requirement.  If your lot is part of the original, pre-1989 subdivision plan, you may not be affected.  However, if you plan to sell your home I suggest you find out for sure, before you put your house on the market, if this Covenant exists in your chain of title.  If it does, you will need to discuss this with your agent and your attorney early on in the process.  Obviously, this extra cost can affect your anticipated bottom line when you are calculating your sale expenses, but I do know of some Sellers who have avoided paying the $485 under specific conditions and circumstances.  But, as this can become a legal issue and affect the quality of the title you are conveying, you should discuss this possibility with your attorney to be sure you are properly protected.

   

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