California company in arrears on $200,000 in assessments to Holiday Island
HOLIDAY ISLAND -- Holiday Island is looking at upwards of a $200,000 loss in assessments if National Recreational Properties, Inc. (NRPI) does not come through with its payments that were due Oct. 10.
District Manager Kevin Crosson told the Board of Commissioners at its Monday work session that the California-based real estate sales corporation not only failed to make its assessment payment Oct. 10 but had not responded to inquiries.
"We haven't heard from them," Crosson said later. "They don't return phone calls."
After NRPI failed to make its agreed-upon quarterly payment in July, and the October deadline was fast approaching, Crosson said he had sent a letter informing them that failure to make the Oct. 10 payment would result in a late fee of an additional 25 percent.
Crosson said during the work session that NRPI owes assessments on about 657 lots. Of those, 404 were purchased as "inventory" lots from the developer. The total assessment figure translates to $202,000. Of that amount, however, the district expects to receive about $23,000 in contract-for-deed payments from property owners paying NRPI.
He said the district has a process for overdue assessments.
After the Oct. 10 deadline passes, the district sends a letter informing the property owner the assessment is due with an additional 25-percent penalty. If there is no response, the district turns the bill over to its attorney for collection.
The attorney sends a warning letter about foreclosure.
"If we foreclose, and lots get sold on the courthouse steps, the original property owner has a two-year right of redemption," Crosson said.
The district must pay any past due property taxes. If the lots sell at the courthouse auction, the new owner will pay anything the district has into them, including past assessments, property taxes and legal fees. The new owner must then hold the lot for two years.
Lots can also be quit-claimed to the district, Crosson said. In that case, the district turns those over to Holiday Island Development Corporation for resale. HIDC will pay back taxes on them, and the former owner loses the two-year right of redemption in that case.
In the district's agreement with the developer, he does not pay past or current assessments on quit-claimed lots. The district's only hope at that point is for the lot to be resold quickly.
With the district facing a serious budget crunch, the loss of $200,000 in assessments could spell disaster. Crosson has already trimmed the 2009 budget, which was looking at a $100,000 loss. His first-pass cuts to programs and capital expenditures will save $124,000.
The board will continue to look at the budget over several meetings, however.
Crosson said the district will also continue to look at options for recovering the assessments NRPI owes.
In other discussions, the board briefly revisited changes to Reg. 39, on employees accepting gratuities; and Reg. 19, on insurance coverage for volunteers working on district projects. Changes to both documents passed first reading at the September meeting. They will be up for a final, second-reading vote at Monday's upcoming business meeting at 9 a.m. at the district office.