The DRE requires the developers to post bonds for all the uncompleted common areas. Even if the developer abandons a project, the bonds are in place to complete the common area amenities. I can’t address what you are saying about the city of Temecula seizing the model homes and auctioning the contents but I do feel confident that the DRE (as well as any city I’ve worked with), required bonds for completion of the improvements. How in the world would the city be able to seize private property except through an eminent domain action? Perhaps there was a clause in the City’s agreement with the developer that in the event of default of the building process the City was entitled to the proceeds from tangible assets of the developer?
In Temeku Hills the reason for the boarded up land was a bankruptcy by the original builder. McMillin bought the property out of bankruptcy for pennies on the dollar. Corky McMillin was a shrewd businessman. He partnered with UDC Homes for one of the two initial tracts, brought the place back to life, and put his company at the top of local builders. FYI – there were 2 complexes completed before the original developer went BK – an attached home (patio home) complex consisting of very few units, and a manufactured housing for seniors complex, also very small. I think those complexes have separate HOA’s and had had acrimonious relationships with the Temeku Hills Master HOA in the past.
It is common practice for the developers to sell and then lease back the models. There may be some tax advantages, hence this widespread practice.
