Lennar forces a "charitable Endowment Fee" to homebuyers?

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noshellsnail_IHB

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While speaking to sales representatives of a William Lyon development in Columbus Grove, they mentioned a 0.05% "charitable Endowment Fee" which will be assessed on the property during a transaction, present and future. Basically whenever a sales transaction occurs on a Lennar developed community (IE the whole Villages of Columbus), buyer will have to pay this fee, even in future resales. Apparently this charitable fee is for the Lennar Charitable Housing Foundation to help the homeless and needy.





I have no problem giving to charity. But I have some concerns:


- This is the first time I've heard of this charity organization. Even with Lennar's backing, I have limited trust in its credibility.


- When Lennar collects these fees from all their home buyers, will they include HOMEBUYER's names when they make the donation? Or is it just another publicity stunt for Lennar using our money?


- I do not like the idea of being FORCED to contribute to a specific charity. I'd rather have the option of donating to a charity of my choice.





Has anybody else encountered this clause in their purchase contract within a Lennar development?
 
<p>This is a private transfer tax that is allowed with no oversight and no restriction.</p>

<p>Recently there was a bill propsed to prohibit this type of "tax" but was dismissed by the housing committee, you can read it here: </p>

<p><a href="http://info.sen.ca.gov/pub/07-08/bill/sen/sb_0651-0700/sb_670_cfa_20070413_131835_sen_comm.html">http://info.sen.ca.gov/pub/07-08/bill/sen/sb_0651-0700/sb_670_cfa_20070413_131835_sen_comm.html</a></p>

<p>This "tax" will be collected everytime the home is sold and resold, and the builder can collect the funds and spend or not spend them as they see fit. </p>
 
mini2126: The masterplan development of Villgaes of Columbus is a Lennar project. William Lyon builds the homes we looked at. But basically this "tax" will covers all Villages of Columbus, regardless of who the builders are.





Interloper: Thanks for the info. I just find it hard to swallow that after making record revenue from the homes they sale, they still have to milk the buyers for extra "tax."
 
edit: Read up on Villages





My suspicion is this really a cost that Lennar incurs from "lost" profit due to conforming to standards of a community. In this case, the low-income houses would be the source. Their perceived loss (cost) is forwarded to the purchaser of a full price home.





One thing you can do is make explicit in the proposal that sale of the property is contigent on receipt of 503c3 tax exemption number and payment receipt. While they may or may not actually have an actual foundation, you'll know depending on how they respond. In a buyer's market, I'd be more than willing to stick it to them to have some integrity. I'd additionally follow up on this "foundation".





If no such foundation exists, then this is a policy from the builders. While they may not be willing to negotiate, they are able to. Seeing as there is a HOA, I'm guessing they won't budge. If they don't want to negotiate, how much do you really want the property?
 
<strong></strong>

<strong>Irvine Planning Commission Considers Ban on All Private Transfer Taxes</strong>




The Irvine Planning Commission will meet tonight, May 17, 2007 at 5:30 p.m. in the City Council Chambers at Irvine City Hall to consider a proposal that would ban all Private Transfer Taxes (PTT) on any future developments
 
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