Business-Minded Legal Solutions

What makes a successful sub-development?

August 2022 expects to see the completion of a new housing development in Forney, Texas. What makes this development news noteworthy is that it represents a unique effort to stand out to prospective buyers by adding luxurious amenities such as, in this case, a massive artificial white sand lagoon.

Marketing differential or value-adding amenity?

Subdivision developments may be a smart investment for real estate developers and builders as homes are in short supply nationwide. The end consumer has many choices for their possible future home, so developers can often feel pressure to take on a new concept to stand out.

When it comes to building an attractive community, you can pursue many possibilities, and all things being equal, amenities may turn out to be the winning factor. However, if an amenity is particularly extravagant, a developer may run the risk of diminishing returns.

How would a developer protect themselves from a diminishing return?

The threat of an amenity turning into a liability depends in part on the size and nature of the amenity. In the Forney community, the proposed development will come with a massive man-made lagoon. While this will draw those interested in an outdoor amenity, manufactured water structures require regular and costly maintenance and care.

On a large enough scale, a poorly maintained man-made beach could become an unwieldy prospect. One could make the same argument about entertainment structures, expansive exercise facilities or any number of stand-out “extras.”

One aspect of a developer’s protection strategy is quite simple: create an HOA. Once all the homes in a property are sold, the facilities themselves would be staffed and handed over; the community would then take on the cost of the regular maintenance.

Smart legal structuring protects innovators

This community development strategy is commonplace because structuring the community properly from a legal perspective is vital when to help protect invested capital. Creating a homeowners’ association for a community requires experienced legal guidance.