Summit County has sued the former owners of a deed-restricted unit of affordable housing at Kimball Junction claiming the defendants violated the restrictions that limit the allowed sales price and require consent from Mountainlands Community Housing Trust for the home to be sold.
In a 10-page complaint The Park Record obtained from 3rd District Court on Monday, officials claim defendants Jeffrey H. Gordon and Donna Riven Gordon sold unit H-8 at 1684 W. Fox Hollow Lane in violation of the deed restrictions.
A “side agreement” the Gordons made to sell a nominal amount of furniture for $100,000 as a condition precedent to the sale, violated the restrictive covenants, which limited the sale price of the property to $175,000, according to Scott Loomis, executive director of Mountainlands Community Housing Trust, the group charged with helping enforce various deed restrictions on properties in Summit County.
The complaint also accuses defendants Christine C. and Jack Leroy Healy, who purchased the unit from the Gordons, of transferring the property without approval from Mountainlands and using the unit to secure a loan in excess of the permitted maximum sales price of the condo, according to Loomis.
Third District Court, by Tuesday morning, had no record of any of the defendants having an attorney. The Gordons could not be reached at a number listed in a Park City telephone book.
“We hope this lawsuit sends a message to those who choose to ignore the requirements of deed restrictions that the county will take all necessary action to uphold the integrity of the restrictions,” Loomis said in a prepared statement.
In December 2005, less then a year after they bought the condo, the Gordons sold the unit to Christine C. Healy for the maximum allowed price of $175,000, according to the complaint.
Before closing the sale, however, Healy was required by the Gordons to execute an agreement with the couple to buy furniture for $100,000, according to the complaint.
“As a result, a mortgage in excess of the maximum allowed sales price was executed against Unit H-8 by the [Healys] and currently encumbers the real property,” the complaint states. “The value of the furnishings purportedly sold under the Buy/Sell agreement is far less than the sum paid. As such, the [Gordons] received a true windfall obtaining sums in excess of the maximum allowed sales price for the real property and in excess of the value of the furnishings sold.”
With the lawsuit filed Dec. 7, Summit County and Mountainlands seek to overturn the transaction and recover $100,000 from the Gordons, according to Loomis.
“This action is a civil proceeding to void the transaction and recover funds received that exceeded the allowable purchase price at the time,” Loomis said.
Meanwhile, defendants in the case will not face criminal charges under a law recently enacted in Summit County that makes violating covenants on a deed-restricted piece of property a class B misdemeanor.
Those violations occurred before the criminal ordinance took effect, deputy Summit County attorney Jami Brackin said.
“If it occurred right now, quite frankly, we would probably do both avenues. We would charge criminally and we would file a suit to recover the money,” Brackin said in a telephone interview Tuesday. “I think this is a very blatant case of people trying to ignore the deed restrictions that are on the unit and trying to circumvent what was intended. Certainly, we don’t like it and we’re going to do what we can to stop it.”
According to Loomis, the purpose of the restrictions is to provide homes for people in the community who couldn’t otherwise afford to buy property in the pricey Park City real-estate market.