Attorney General Gansler Announces Agreement with
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
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.