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For Immediate Release

Media Contact:
Shanetta J. Paskel, 410-576-7939
spaskel@oag.state.md.us

Attorney General Gansler Announces Agreement with Developer
Rouse Fairwood Development to forgive $2 million loan


BALTIMORE, MD (October 9, 2008) - Attorney General Douglas F. Gansler announced today that his Consumer Protection Division entered into a settlement with Rouse Fairwood Development, LLP, concerning a loan that the developer had made to a homeowners’ association for the financing of amenities in the community. Rouse Fairwood is the developer of the Fairwood housing community in Prince George’s County, MD.

" Consumers should be fully informed of the debts of the homeowners’ association that they will become a part of when they purchase a home," said Attorney General Gansler. "I am happy that we were able to reach an agreement and obtain loan forgiveness for the homeowners in this development."

Negotiations for this settlement began out of concerns raised and brought to the attention of the Attorney General’s Office by community residents. The Consumer Protection Division alleged that the developer had not adequately disclosed to purchasers that the homeowners’ association had taken out a loan from the developer to pay for promised amenities within the community.

Under the settlement agreement, the developer agreed to forgive $2,000,000 of debt that the homeowners’ association owed to the developer and to restructure the remainder of the loan. Rouse Fairwood also agreed that two-thirds of the homeowners would need to approve any future loans that the homeowners’ association took out from the developer. The developer further agreed to clearly disclose to prospective purchasers the existence of the loan from the developer to the homeowners’ association and to disclose in future advertisements that several of the amenities offered to the house community are funded through homeowners’ assessments.

 


   

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