In Shea, the taxpayers (a corporation and two partnerships related through common ownership, or for our purposes, “Shea”) were in the home development business in Arizona, California and Colorado. Shea wasn’t in the habit of throwing up a spec home and calling it a day; rather, it preferred to develop planned communities ranging from 100 to 1,000 homes. The builders emphasized the features and lifestyle of the planned communities to potential buyers, advertising their developments with cliché, but apparently effective, slogans like “The Pursuit of Happiness.” Shea invested significant funds – upwards of 30% of total budgeted costs, in some developments — in the amenities – such as pools, golf courses, and clubhouses –for each neighborhood. In addition, Shea was held to its promise by state and municipal law,
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In the event Shea failed to finish the improvements, it would be required to pay the bond amount over to the government agency. Similar bonds were entered into to secure performance with homeowners associations established for each development.
In general, when Shea sold home to a buyer, the purchase contract identified the home as the subject matter of the contract. Depending on the state of sale, however, additional documents were required to protect the buyer. In Arizona, the contracts required the purchaser to initial and sign an acknowledgement indicating that he or she had read a copy of the development’s public report before signing the purchase agreement. These public reports identified the developments’ common areas and improvements. The reports also indicated the dates that Shea anticipated completion of the common-area improvements and facilities as
In the event Shea failed to finish the improvements, it would be required to pay the bond amount over to the government agency. Similar bonds were entered into to secure performance with homeowners associations established for each development.
In general, when Shea sold home to a buyer, the purchase contract identified the home as the subject matter of the contract. Depending on the state of sale, however, additional documents were required to protect the buyer. In Arizona, the contracts required the purchaser to initial and sign an acknowledgement indicating that he or she had read a copy of the development’s public report before signing the purchase agreement. These public reports identified the developments’ common areas and improvements. The reports also indicated the dates that Shea anticipated completion of the common-area improvements and facilities as