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purchaser or lessee met the residency requirements of Highland
Farms. Up to the time of the trial petitioner had allowed only
two transfers of ownership: (1) A cluster home owner married
another cluster home owner, the wife transferred title of her
unit to herself and her new spouse as tenants by the entireties,
and petitioner repurchased the husband's unit; and (2) an owner
transferred title of his unit to a grantor trust, subject to the
same terms and conditions of the purchase agreement. Up to the
time of the trial petitioner had resold each repurchased cluster
home for a price higher than its original purchase price.7
The parties stipulated that the testimony of the cluster
home purchasers would be that the transactions were always
represented to the purchasers as sales, and that at no time did
petitioner make representations to the purchasers, either in
writing or orally, that the transactions were loans or mortgages
or that there was a mortgagor-mortgagee or lender-borrower
relationship between the parties. Petitioner, however, contends
such a relationship is evident in the purchase agreement. The
parties also stipulated that it was the cluster home purchasers'
understanding that they were required to transfer their cluster
homes back to petitioner for a percentage (not less than 76
percent) of the original purchase price. This was also the
understanding of petitioner's president, James Neves.
7 Although it had never happened as of the time of the
trial, if real estate market prices fell, petitioner would resell
the repurchased cluster home for a price less than its original
purchase price.
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Last modified: May 25, 2011