Group settlements, a mass meeting where a condominium developer and 15 or more buyers can close on a number of mortgages at once, are beginning to take place here, following the example of similar projects in California.
For condominium purchasers it's a way to get to know their new neighbors quickly. For condominium developers it's a way to save on legal fees.
Park Fairfax, an Alexandria conversion of 1,684 units, will begin holding closings for up to 50 units at one time in August. The Rotunda, a new luxury complex of 239 units in McLean, will do the same this winter.
Developer Giuseppe Cecchi, who has had a hand in those projects and in the Watergate at Landmark project, where group settlements have already taken place, said the idea of grouping purchasers together was suggested two years ago by firm's attorney, William Thomas of Thomas and Sewell, as a way to move several hundred people into Watergates at Landmark in a short time. (The developers waited to complete the building before moving anyone in.)
New owners participating in a group settlement receive more information than they normally would at a private closing, according to Cecchi. First there is a 45-minute lecture with slides. Buyers learn about condominium projects in general and theirs in particular. This is followed by an hour and a half of line-by-line explanation of the documents.
There are no disclosures of personal information, Cecchi said. Each person follows a numbered model on the screen corresponding to financing data on his or her own document. Personal questions are answered in an adjacent private room.
The two attorneys doing the settlements represents the developers. Purchasers may have their own lawyers present at their own expense if they wish. However, Thomas and Sewell associate David Mercer estimates that outside lawyers have been present only 10 times in 750 closings.
For the developer, who absorbs the attorney's fees, the legal costs for the closings are cut in half, according to Cecchi. And the purchasers seem to like the arrangement.
Asked why the practice was not more widespread here, Mercer replied that was undoubetly because not enough developments had a sufficient volume of closings - between five and 10 a week - to make it economically viable.
Another attorney doing group settlements is Lucille Lambert of Lambert and Lambert in Alexandria. She began a year and a half ago with new owners of Skyline Plaza condos at Bailey's Crossroads. She said she had been scheduling individual closing an hour apart, "but by the time you've done five in one day you're ready to blow your stack.
"Besides," she continued, "I'm an old school teacher anyway, so it was just like getting back into the profession."
Lambert's volume settlements are less elaborately staged than Thomas and Sewell's. Moreover, her firm bills by unit rather than on an hourly basis so the cost is the same to the developer.