Highland Farms, Inc. and Subsidiary - Page 5

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          Cluster Homes                                                               
               Cluster homes featured individually owned units grouped in             
          clusters of four to six units with attached carports.  The                  
          cluster homes were available with one, two, or three bedrooms.              
          Cluster homes were available for purchase only and required                 
          payment of a monthly maintenance fee.  In addition, condominium             
          units were available for purchase only and required payment of a            
          monthly maintenance fee.  Petitioner reserved the right to                  
          increase the maintenance fee effective the first of each calendar           
          year with 30 days' notice to the owners.                                    
               Three legal documents were executed in connection with the             
          purchase of a cluster home:  a deed, a purchase agreement, and a            
          lease agreement.  Petitioner's attorney, Charles Worley, drafted            
          these documents for petitioner's use.  All three documents made             
          reference to the other two documents.  A copy of the purchase               
          agreement was attached to the recorded deed, and the terms of the           
          purchase agreement were also incorporated into the deed by                  
          reference.  Pursuant to the deed, petitioner "bargained and sold"           
          and conveyed the cluster home unit in fee simple to the                     
          purchaser.  The lease agreement was for the surrounding yard; the           
          lease payment was $1 per month.  The term of the lease ran "for a           
          term coinciding with [purchaser's] ownership" of the cluster                
          home, terminating upon the "sale or other disposition" by the               
          purchaser of the cluster home.  The purchase agreement remained             
          in effect as long as the owner occupied the cluster home.                   
               In the purchase agreement, petitioner agreed to convey and             
          the purchaser agreed to purchase the identified unit.  In the               



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Last modified: May 25, 2011