On a single lot house development project, a builder/developer completed the whole development infrastructure: the water supply system, site drainage and the road network. He completed only one section of the planned houses before going bankrupt. The bank took over and completed a few more houses. The bank went bankrupt. Enter the Resolution Trust Company (RTC) with their consultant: DiGeronimo PC.
Water Supply System: The Independence Municipal Utility Authority (IMUA) had not accepted the water supply system contingent on the completion of a significant list. DiGeronimo PC investigation found that IMUA had been using the water supply system and charging homeowners for the water generated by the water supply system that IMUA had not accepted.
DiGeronimo PC argues – IMUA should not distribute potentially harmful water to homeowners since the IMUA had found the system not acceptable. Further, any money received for the water belongs to RTC since it is RTC’s system, not yet belong to IMUA until IMUA accepted the system. The IMUA found the water system to be acceptable upon DiGeronimo PC’s completion of a few construction items.
Site Drainage: The Municipal Engineer considered site drainage defective due to the absence of seeding and grading at the retention basin. A retention basin is a large hallow of land designed to hold water in a rainstorm, eventually percolating naturally into the ground. The development is several years old. The hollow of land is fully covered with plant forms indigenous to the area (i.e. weeds). DiGeronimo PC cut the weeds and the Municipal Engineer accepted the drainage system.
Road Work: The municipality had not accepted the roads. Since the roads were not municipality accepted, RTC was obligated to maintain the roads – snow removal and weed maintenance. Individual homeowners had been granted certificates of occupancy by the municipal Building Code Official. How is it possible for the municipality to allow homeowners to traverse the roads if the roads were not acceptable? The municipality assumed costs for the roads. The RTC received a reimbursement from the escrow account held by the municipality.