Use and occupancy addendum

[kdhastedt]

<<What the builders are doing is trying to protect themselves.>>

If this is the case, then they're not trying to protect themselves, they're just greedy money grubbers.

I live in one of the very nicest developments in the area and there are no idiotic rules like this.

Keith

[dbassett74]

What the builders are doing is trying to protect themselves.  What has happened is a builder will price the Phase 1 homes at $100,000 (for instance).  They then want to price the Phase 2 homes at $200,000.  Investors buy the Phase 1 homes, and put them right back on the market for $150,000.  New buyers purchase from the investor rather than the builder.  I believe this is what it’s about.

Sounds logical, although a bit greedy and completing against the basic idea of a free and open market.  So why would renting out (rather than owner occupying) for the year be any problem?  I'm not selling, just renting.  Why do they want me to actually occupy?  Would they even know if I was renting?

[nor-calREI]

It is a restriction against investors.  In the developers opinion a community full of owner occupants is better than renters for a varitiety of reasons.  

I don't see how they would know if you were renting it out, I may choose that path.

[niravmd]

considering it takes 2 years in CA to develop raw land, the builders have high holding costs. the increase in pricing helps mitigate this cost [and add significantly to their bottom line]

i asked 2 lawyers about this. both of them said it would definitely hold up in court[atleast the contract i had] however the sales agent said the builder wasn't going to pursue this, just wanted investors to be discreet about selling[like no banners or for sale signs]

regardless, i now work only with builders who are investor-friendly. there's a ton of them where i'm investing.