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to evaluate what they are buying? Some Congressmen have suggested federal safeguards, but even today there is much the buyer can do to safeguard himself.
HOFFMAN. Well, we think people are pretty well advised to go down and see if a particular piece of land meets their own individual family needs or not. What is satisfactory for one family, might not be for another. So, if you go down and look at it and perhaps talk to a few people who are down in the area then you'd know more what you're buying.
BURNS. The fact remains that many buy their property sight unseen, and in fact are often encouraged to do so by steamroller salesmanship. Many customers seem content to buy blind, not so much as an investment, as an act of faith, and to some critics this is the most disturbing fact in the Florida land boom.
CBS NEWS, Miami, Fla. GULF AMERICAN LAND CORP.,
Miami, Fla., September 23, 1966. Senator HARRISON A. WILLIAMS, Senate Office Building, Washington, D.C.
DEAR SENATOR WILLIAMS : Replying to your letter of September 9, 1966, for purposes of clarification I have set forth below the answers to your questions in the same order in which they are set forth in your letter.
1. See reply to question #1 in my letter to you dated August 16, 1966. 2. I have no comment to make.
3. We do not maintain records of all resales made of either developed or undeveloped property. Many of these sales are made individually and through independent brokers.
4. Our contract gives the purchaser a right to exchange. We do not know what their motives are for exercising this privilege.
5. See reply to Question #1 of my letter to you dated August 16, 1966. 6. I have no comment.
1. See reply to Question #1 of my letter to you dated August 16, 1966. 2. See reply to Question #8 of my letter to you dated August 16, 1966.
1. See reply to Question #3 of my letter to you dated August 16, 1966.
3. See reply to Question #6 in my letter to you dated August 16, 1966. Modern Air Transport, Inc. is a supplemental carrier and all of its operations are subject to CAB and FAA regulations.
4. See reply to Question #7 in my letter to you of August 16, 1966.
5. As stated in my letter of August 16, 1966, I will not reply to any newspaper articles.
6. See reply to Question #5 in my letter to you of August 16, 1966.
1. I will not reply to any newspaper articles.
2. Promised improvements for developments of our land are bonded to the county in accordance with county regulations before any plats can be recorded.
3. I will not reply to any newspaper articles.
1. No contradiction exists. Development costs as such refer to the land being sold.
2. The basis for the claim of pleasure profits is clearly set forth in the brochure.
3. I believe that the reply to this question is clearly set forth in my reply to Question #1 in my letter to you of August 16, 1966.
4. The extent and duration of inundation depends on the rainfall of any given year.
(a) and (b) We do not know that it will have any effect on hunting or fishing or upon resale value.
(c) Reply is set forth in Question #2 above.
1. I will not reply to any newspaper article.
4. If you will let me know what specific articles you want, I will be glad to see that they are furnished. Yours very truly,
LEONARD ROSEN, Chairman of the Board.
APPENDIX & MATERIAL RELATED TO LAKESHORE
SEPTEMBER 1, 1966. Mr. E. L. PARKER, President, The Lakeshore Corporations, Miami Beach, Fla. (Attention: Mr. C. V. Browne, Manager).
DEAR MR. PARKER: As I mentioned in a telegram of August 15 to Mr. Browne, I expected to submit several questions to you in connection with hearings on S. 2672, the Interstate Land Sales Full Disclosure Act.
You are probably familiar with provisions of the bill. Our paramount purpose is to make certain that a buyer is as fully informed as possible before he purchases a site.
I would like, therefore, to put the following questions to you, and I appreciate your willinginess to give response by mail :
ONE: CLEVELAND PLAIN DEALER ARTICLES
Your letter of August 3 says that you have spent over $100,000 for Shenango Lakes in Pennsylvania for roads, surveying, repairing of dam, equipment for beach areas, etc. Articles appearing in the Cleveland Plain Dealer in August 1965 are highly critical of the roads, provisions for sewage, disposal, and maintenance of the property. I have enclosed several of the articles and would like responses to the following:
[From the Cleveland Plain Dealer, Aug. 1, 1965]
“PYMATUNING 'DREAM AREA' Is NIGHTMARE
“(By Donald L. Bartlett and Terence Sheridan) “A band of Florida-based real estate hucksters has turned a Pennsylvania summer vacationland near Pymatuning Lake into a potential candidate for the nation's first rural slum clearance district.
"In selling postage stamp-sized lots mainly to city dwellers from Cleveland, Akron and northeast Ohio, the smooth-talking salesmen took in an estimated quarter-million dollars.
“In one phase of the high-pressure campaign, developers collected about $125,000 for land they originally purchased for less than $9,000—a return of $14 for every $1 invested.
"The quick dealing real estate firm is The Lakeshore Corps. of Miami Beach, Fla., which bills itself as a national organization-developers of waterfront property coast to coast.'
"Representatives of the company—the object of complaints from irate land buyers from coast to coast-vanished from Pennsylvania last month after disposing of all but a few lots.
"The lots are situated in two developments about four miles south of the OhioPennsylvania causeway across Pymatuning :
"The 175-acre Shenango Lakes Allotment, which consists of two tiny manmade lakes surrounded by 570 lots.
“The 100-acre Shenango Lake Estates, situated about three miles away on former farm land cut up into 465 lots. "Hundreds of land-buyers who shelled out from $300 to $1,800 each for their lots were attracted by promises of weekend retreats in South Shenango Township: sylvan, silent, peaceful.
"But the 275-acre 'playland,' sprawled over rolling countryside dotted with weed-covered pastures and clumps of thick woods, is turning out to be anything but silent and peaceful. “It is still sylvan, but not for long.
“The problems, found by Plain Dealer reporters in a two-week investigation that reached into several states, are these :
"Owners of many of the more than 1,000 lots may not be permitted to build cottages because the clay soil is not suitable for septic tanks.
“Pennsylvania health authorities expect serious health hazards to develop because the 60-by-120-foot lots generally are too small to accommodate both a septic tank and water well.
"Owners of a number of lots will be unable to reach their properties whenever it rains or snows. Most of the roads were carved out of wooded areas and consist of topsoil. Some are impassable now because of deep ruts and firmly implanted tree roots.
“Persons who purchased the 570 lots in the initial development, in the immediate area of the two lakes, were told they had exclusive rights to the water and the roads.
"Persons who purchased the 465 lots in the second allotment, some two to three miles away, were assured they could use the lakes. They also were issued membership cards supposedly granting them the lake privileges and were informed that their guests also could go swimming, fishing and boating.
"It would be physically impossible for all the property owners who were told they could use the lakes to go swimming or fishing on the same weekend. “The result is a simmering feud between the 'old-timers' who live near the lakes and the 'newcomers' who live several miles away.
“All of the landowners questioned by The Plain Dealer said they entered into the agreements with the understanding that Lakeshore would lay gravel roads and maintain the lakes and beach areas.
“However, none of the promises concerning construction of the roads and maintenance of the lakes was placed in writing.
“And all of the contracts between property-owners and the Lakeshore Corp. indicate that oral pledges are not binding.
“In addition, the allotment plat plan accepted by the South Shenango Township Board of Supervisors states that both the lakes and 'roads' are dedicated to public use,' meaning they are open to the general public.
“The result is that residents of the bustling weekend community are stuck with their backwoods byways and the cost of upkeep of their lakes.
"For the State and township, the major problem is sewage. For the lot owners, it is the roads and use of the lakes.
"An organized group of lot owners from the first allotment attempted to block plans for the second subdivision last year.
“But the township supervisors who have the final word on all plat plans and are the sole source of building restrictions, approved the project.
“ 'The supervisors should not have approved the allotment,' said C. J. Lytle, a sanitarian in Crawford County for the Pennsylvania Department of Health.
“ 'We never heard about it until after the supervisors approved the allotment. But half of our work is education. Ours is a preventive job. We just have no jurisdiction in the townships. We have no restrictions.
“ After all the damage is done, the state's jurisdiction begins. We just can't permit sewage at ground surface.'
"Fewer than a dozen land owners have started building cottages or have set up trailers in the new section.
“ 'Still, the place is becoming a mess right now,' said the engineer. We know we're going to have real problems there.
"That is a heck of a place to get rid of sewage. There is lots of clay there and that's absolutely nonabsorbent.'
“At least one township supervisor agrees. "He is Frank W. Arey, a former Cleveland who candidly concedes: “‘After we approved it, we found out the soil would not absorb. it's all clay. We could condemn every stinking lot up there. We may have to padlock every cottage.'
[From the Cleveland Plain Dealer, Aug. 5, 1965)
“(By Donald L. Barlett and Terence Sheridan) “Advertising gimmicks employed by Florida developers of the controversial Shenango Lake vacationland in Crawford County, Pa., have been labeled as 'misleading and objectionable.'
"The label was slapped on previous direct mail advertising campaigns of The Lakeshore Corps. of Miami by the national office of the Better Business Bureau.
"In a two-week investigation, The Plain Dealer found that Lakeshore advertising as complained about by land buyers, may be in violation of Pennsylvania Real Estate Commission regulations.
“Although the commission initiated an inquiry in July 1964, into Lakeshore operations, a state official said the probe still had not been completed and that no action had been taken against the company.
"The Florida hucksters, who have promoted summer retreats across the country, first came to the attention of the BBB in 1946.
“They have used the same circular-conveying the impression of a free lot in a summer paradise-to sell most of their developments, reporters found.
"As several hundred Cleveland-Akron area residents who purchased land at Shenango Lake, just inside the Pennsylvania border near Pymatuning Lake, have found, the lots are not free.
"The city dwellers shelled out from $300 to $1,800 for lots as small as 60 by 120 feet.
"They then found some persons may not be permitted to build cottages because the clay soil is not suitable for septic tanks, roads are impassable when it rains or shows and two small lakes billed as 'private' really are public.
"The literature mailed out by Lakeshore, a BBB official in New York, said, definitely gives the impression that the recipient has been selected to receive a free lot.
“We have tried for years to get Lakeshore to correct its selling methods, but have not succeeded,' he said.
"The Lakeshore teaser sent into thousands of homes in northeast Ohio begins:
"'We are pleased to inform you that in conjunction with our advertising campaign . . . you have been selected from your district to receive an allotment of a full-size cabin site at Shenango Lake Estates.'
"Pennsylvania Real Estate Commission rules on advertising state that 'Advertising is "misleading" when, taken as a whole, there is a distinct possibility that it will deceive the ordinary real estate purchaser, seller, loandlord, or tenant or other person whom it is intended to influence.'
"Violation of commission's regulations, a state official said, is ground for revocation of a broker's or corporation's license.
"Commission rules also state:
“ 'No broker shall make representations to give assurances or advice concerning any aspect of a real estate transaction which he knows or should know to be incorrect, inaccurate or improbable.'
“Of the more than 50 lot owners interviewed by Plain Dealer reporters, nearly all said that Lakeshore salesmen had promised that:
“Roads in the 275-acre summer 'playland' would be paved with gravel and brought to such a condition that they would be taken over by South Shenango Township, where the development is located.
"Beach and picnic areas would be laid out around the two lakes.
"Persons who bought lots surrounding the lake were told the lakes would be private and that no one else could use them.
"Persons who purchased lots in a second subdivision about three miles away were issued membership cards and, told they and their friends could
use the lakes. “The only verbal commitment met by Lakeshore was the promise that lot owners in the second development could use the lakes.
"And this promise was fulfilled only because the original plat plan for the development dedicated the roads and lakes 'to public use.'
"THEY BOUGHT A SUMMER PARADISE
BUT DID THEY FIND IT?
“(By Donald L. Barlett and Terene Sheridan) “How is the gold beam become dim! How is the most fine gold changed! The stones of the sanctuary are poured out in the top of the street.—Lamentations, Old Testament.
“The written word about the promised land in Pennsylvania went out to Ohioans, and they did respond.
They came running from Greater Cleveland, Akron, Wooster, East Liverpool, Kent, Lima, Warren and Niles.