Real Estate Developer Repays More Than $525,000 to Homebuyers Over Allegations of Unreturned Deposits

Defendant Took Advance Payments for New Homes He Failed to Build; Will Pay an Additional $30,000 to Commonwealth Under Settlement

BOSTON – February 4, 2014 – (RealEstateRama) — A real estate developer who allegedly took thousands of dollars in advance payments for new, single-family homes that were never delivered, has repaid more than $525,000 to affected homebuyers, and has been permanently required to protect any future consumer deposits, Attorney General Martha Coakley announced today.

“This developer took thousands of dollars in advance payments from new homebuyers for houses he never delivered,” AG Coakley said. “We are pleased that this settlement ensures that all affected consumers have received restitution, and that the developer can no longer accept unprotected payments in the future.”

The consent judgment, entered Thursday in Suffolk Superior Court, settles allegations against Michael Intoccia of Foxboro, and his former companies Bella Estates Realty Trust, MTI Realty, Intoccia Builders Corporation, and Intoccia Development Corp., for taking large deposits from consumers upon contracting for the construction and sale of new homes, failing to deliver the promised homes by the contractual deadlines, and then refusing to return consumers’ deposits.

Under the terms of the settlement reached with the AG’s Office, Intoccia has consented to a $100,000 judgment, including a $30,000 payment to the Commonwealth. The remaining $70,000 is suspended provided that Intoccia complies with the terms of the judgment.

As a precondition of the judgment, Intoccia has settled all consumer claims against him regarding outstanding real estate deposits. In addition to the five homebuyers named in the AG’s original complaint, Intoccia voluntarily disclosed several other outstanding deposits, dating back as far as 2007. Intoccia has now paid over $525,000 to more than a dozen individuals from whom he took deposits for new homes in Sharon, Halifax, North Attleboro, Norfolk, and Franklin.

In February 2013, the AG’s Office obtained a temporary restraining order against Intoccia, prohibiting him from accepting future deposits for new homes unless the deposits are put into a designated escrow account. As part of the settlement, Intoccia is now permanently prohibited from taking any unprotected advance payments or deposits from consumers.

According to the original complaint, Intoccia operates a development business in Norfolk County through a network of companies that were involved in the planning, marketing, and construction of the Bella Estates development in Sharon that was to consist of 29 single-family house lots. Intoccia allegedly solicited buyers and took deposits of up to $55,300 per residence.

Intoccia and his companies also allegedly made false promises to promptly build homes in several other communities, when they knew that construction was prevented by permitting issues, and in some cases took multiple deposits for the same lot. Homebuyers suffered additional expenses for moving, temporary housing, appliances and fixtures for houses that were never built.

Intoccia allegedly held consumers’ deposits long after the final deadlines for closing passed and in some cases more than two years after the deposit was paid. The complaint alleges that, after defaulting on the deals, the defendants allowed many lots to fall into foreclosure.

This matter is being handled by Assistant Attorney General Jeffrey Walker of Attorney General Coakley’s Consumer Protection Division, and Amanda George and James O’Hara from the Civil Investigations Division.

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This is a statement of Michael Intoccia, real estate developer, on the Final Judgment by Consent, signed by Mr. Intoccia and the Office of the Attorney General of the Commonwealth of Massachusetts:

On the day that the Attorney General’s Office filed the civil action in my case, I assured those involved that my goal had been and remained to facilitate where possible the completion of the homes that were planned or to reimburse my customers for the deposits they paid to my companies. With today’s settlement with the Attorney General’s Office, I have now been able to complete what I promised.

BACKGROUND
In the last five years our country, including Massachusetts, experienced an extremely difficult economic period. The real estate market was one of the hardest hit areas. As one of the largest builders of homes in the Boston area, with a solid reputation of delivering quality homes, I and my companies encountered serious economic challenges following the economic turmoil that began in 2008. During this period, as the real estate market collapsed, the properties I owned went into default as the value of the properties dropped below the value of the loans, and the properties were the subject of foreclosure sales.