March 12, 2008 News & Views » News Feature

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Beazer bummer 

Equity Apartments gave renters hope of buying a home. Then Beazer left town.

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click to enlarge JASIATIC - NO-SWEAT EQUITY: An Equity-owned apartment complex
  • Jasiatic

  • NO-SWEAT EQUITY: An Equity-owned apartment complex

When Beverly moved into Kimmerly Glen Apartments in East Charlotte about six years ago, she did so for one reason: to earn equity toward the home she would purchase when the time was right.

That time came in the summer of 2007.

But when she went to cash in on her equity, Beverly was told that if it wasn't a Beazer home, she wasn't going to get sqaut.

"It was either move to a Beazer home or lose that money," says Beverly, who didn't want to use her last name.

Equity Apartments, which owns Kimmerly Glen, has offered renters a program in which they can earn "equity" points to buy a Beazer home when they pay rent, says Susanne Ryan, a local representative with the company, whose parent owner, Equity Residential, is based in Chicago.

The program also allows residents to take advantage of special mortgage rates and no closing fees through Bank of America, according Equity's Web site.

But Equity's program isn't transferable. "We only have one home builder in Charlotte that we were dealing with," Ryan says.

So why wouldn't Beverly want to pick a Beazer home since she had nearly $8,000 to use toward the down payment?

"During that time, Beazer Homes had really high interest and there was news about Beazer home mortgage rates going up after you moved into the home," she says.

All is not right in the Beazer world.

Media outlets from The Charlotte Observer, which wrote a series of articles detailing problems with Beazer homes, to BusinessWeek have catalogued Beazer's troubles. Last month, the Triangle Business Journal reported that the home builder is leaving the Charlotte market, though it will complete all homes currently under construction in the Queen City. The Atlanta-based Beazer has also pulled out of Columbia, S.C.

"Reports that the company made loans to unqualified buyers in Charlotte have led to federal investigations, and the downturn in the national housing market has punished Beazer's stock," the Business Journal reported.

So why does Equity Apartments still deal with the builder, who has left the area under such controversy? Ryan says Equity, which owns properties throughout the country, including two other Charlotte apartment complexes, McAlpine Ridge and Berkshire Place, plans to leave the market in two years.

Ryan claims it's because there isn't enough land in the area for the company to grow. "Equity's big plan is to be in markets where there is available land to grow the company," she says.

Still, the rental company had been actively seeking other builders to join the equity program. When Equity leaves the area, Ryan says renters who have built equity toward a home will be given a certificate and will have a year to use it with Beazer.

But if they do, Ryan says, they won't be able to use a real estate agent. And April C. Turner, a Realtor with Headline Realty, says that requirement could hurt buyers.

"A realtor is there to protect the interest of the client," says Turner, who wasn't familiar with Equity Apartments' deal with renters. "When you go in [to purchase a home] without a Realtor, you don't have that protection. A home is a major purchase and you need that protection. There are a lot of little details that the public may not know, but a Realtor knows."

Even if Equity does entice new builders, it will come a little too late for former renters like Beverly.

She's since bought a home in an established community not built by Beazer.

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