Eleven homes of a partially completed residential project in Centreville have been auctioned off, and seven of them sold this week in front of the Fairfax County Judicial Center for a total of $493,000.
The seven houses, which were being built by Crest Homes, a bankrupt Maryland home builder, were purchased by Potomac Savings and Loan Association. The Maryland thrift provided loans to Crest and later foreclosed on the houses in the Sequoia Farms project when the company was unable to finish them. The project is located near Braddock Road and Rte. 28.
Last month, in a similar auction, another four homes in the subdivision were purchased by Coldwell Banker for a total of $255,000.
At least 14 would-be home buyers who had signed contracts for the Crest houses as early as January 1986 are trying to recover their deposits of between $4,000 and $8,000. Jerrold Gottlieb, president of Crest Homes, which declared bankruptcy in June, promised that the homes would be completed as early as June 1986.
But only a few of the houses were finished. The rest are surrounded by dirt, piles of wood or sit vacant with warped roofs and other structural problems, according to would-be home buyers. It was not immediately clear what will happen with the unfinished houses.
The 14 homes are part of 350 homes at Sequoia Farms. Three other builders are constructing homes in the complex; their houses are not affected by Gottlieb's financial difficulties.
Eight would-be buyers who made deposits on the Crest houses located on Nandina Court still haven't gone to settlement. On June 4, they each filed suit against Crest Homes trying to recover their deposit money and an additional $25,000 in damages. A Fairfax County judge ruled in their favor, but did not make an immediate determination of the amount of the damages they would receive.
Most of the would-be buyers have found new homes elsewhere. Glenn and Cindy Vestal, who put down a $6,400 deposit on a $115,000 house last year, have moved from the cramped quarters of an apartment in his parents' house to a two-bedroom home in Manassas. Jim Militello and his family, who put down a $7,000 deposit for a home at Sequoia Farms, have moved out of their Burke apartment into a town house nearby that has two fewer bedrooms and a kitchen, living room and basement that are smaller than the Crest house they planned to buy. The town house cost $135,000, only $5,000 less than the detached home the Militellos had hoped to purchase in Centreville.
Patty Hill, 33, a teacher's aide, planned to move into a four-bedroom home last year with her husband Jeff, 35, and their children. They made a $4,000 deposit, but their home was never finished. Since then, they have been living in a Reston apartment. They recently signed a new contract for a home several blocks away from the Sequoia Farms project and hope to move into it next month.
"We've been living out of suitcases ever since," Hill said shortly after witnessing this week's auction. She said they have spent about $30,000 during the past year in legal and storage fees. "Hopefully, my husband and I are young enough and hopefully have the earning capacity to recoup somewhere along the way."
Jeff Harrab, an attorney for Potomac Savings and Loan, which provided some of the construction loans to Gottlieb for part of the development, declined to comment. Gary Goldstein, an attorney for Gottlieb, said his client unsuccessfully tried to save the project earlier this year by investing $250,000 of his own money. He had hoped the thrift would lend him more money to complete the subdivision, Goldstein said.
After several newspaper articles last March detailed the complaints of frustrated would-be home buyers, as well as Gottlieb's ties to Old Court Savings and Loan, the defunct Baltimore thrift, and his trail of unsuccessful projects, Goldstein said the bank refused to lend him any more money. "The bank became very concerned about his ability to finish," he said.
Goldstein also said the Gottlieb's building suppliers got worried after reading the newspaper articles and asked that Crest Homes pay in advance and in cash.
Gottlieb's problems go beyond the Crest houses.
Last year, the Maryland Deposit Insurance Fund sued Gottlieb and Jeffrey Levitt, a business associate and convicted former president of Old Court, for $70 million in connection with a property acquisition scheme