Fraud and Misrepresentations Come Back to Bite Rarity Communities Developer Michael Ross
It wouldn’t take much time on the internet to discover a slew of lawsuits and negative press about real estate developer Michael Ross, Robert Stooksbury and Rarity Communities from upset property owners, investors, builders and vendors. During the peak of the real estate market in 2006, Rarity Communities had an impressive list of luxury waterfront and golf course master planned communities either under construction or planned in pristine Eastern Tennessee lakes. These gated Tennessee private communities at project completion would have easily exceeded $1 billion dollars in combined value:
Rarity Bay - Tellico Lake
Rarity Pointe - Loudon County
Rarity Ridge - Watts Bar Lake
Rarity Club - Chattanooga
Rarity Enclave - Venore
Rarity Rivers - Dayton
Rarity Mountain - Campbell County
Rarity Meadows - Sweetwater Valley
Rarity Oaks - Oak Ridge
Rarity Landings - Loudon
By 2008, the domino’s began to fall for Rarity Communities as lenders foreclosed on a number of Rarity Communities because of unpaid bank notes and property taxes. This left Rarity property owners and investors in nine Rarity Communities with no hope, most with no community amenities and severely deflated property values. Only the big brother of them all, Rarity Bay on Tellico Lake has been spared the collapse of Rarity Communities, still a beautiful gated Eastern Tennessee lake community alive and well, where we see property owners relatively happy owning there. Can Rarity Bay on Tellico Lake survive the Rarity brand’s bad name going forward?
This week, Loudon real estate developer Michael Ross was found guilty of fraud by a jury of 12 and ordered by the courts to pay Chattanooga Bill Worley Construction Company $5.8 million dollars. The jury concluded Michael Ross had committed unfair and deceptive trade practices. We wondered if the jury in rural Tennessee were capable of being unbaised as locals aren't fond of real estate developers changing the footprint of their land. This is the first of many lawsuits on the horizon for Michael Ross and Rarity Communities. As the court cases continue with the two next in line from Chattanooga developer John "Thunder" Thornton and we expect to learn more about how Michael Ross burned through cash so quickly. Was it the extravagant marketing and sales events, helicopter rides and big payrolls which ate up millions of dollars in cash from sales or was the money re-routed in ponzi scheme? Questions now on the table: 1) Will Loudon real estate developer Michael Ross appeal the judgement and if so, how can he afford it? 2) Will Michael Ross end up doing jail time? 3) Will the Plaintiff Bill Worley Construction Co and future Plaintiff's ever actually see a dime from court ordered judgements as we believe attorney's too push the envelope for their own financial gain?
While those wronged by Loudon real estate developer Michael Ross, Robert Stooksbury and Rarity Communities are on a witch hunt to make them pay the price, some of us need to take a look at ourselves and acknowledge how we fueled the insatiable real estate demand which enticed real estate developers to build as fast as they could. The flippers and the dreamers hoping to make a fast buck right along side the Loudon real estate developers. The real victims here are the buyer’s who truly planned on building a home in a defunct Rarity Eastern Tennessee lake community. Unfortunately, all the ‘lawyering up’ in the world won't guarantee a financial payback and happy ending in our lifetime. Maybe land banking or gifting the lot to our grandchildren is the only positive way we can accept today's financial loss.
What remains through this hardship is the timeless beautiful region of Eastern Tennessee. Folks - Rarity Communities were not the only master planned communities in Eastern Tennessee. Tennessee will continue to be a hotspot as one of the best states to retire as Baby Boomers move forward with their relocation plans. While the negative news about Loudon real estate developer Michael Ross rains on the Rarity Communities brand and Robert Stooksbury once again, we see savvy buying opportunities.
Write us if you'd like to know what we're referring to: info@communityfinder.com or call toll free 866.384.1799
