(WNY News Now) Eagle Rock Resort Co., LLC and its parent firms are being sued by Pennsylvania Attorney General Michelle Henry for allegedly engaging in dishonest business practices by overcharging for undeveloped land lots.
Attorney General Michelle Henry revealed that a complaint has been filed against Eagle Rock Resort Co., LLC, a resort developer, as well as its parent firm and co-subsidiaries, for using false and exaggerated values to sell undeveloped land lots.
Eagle Rock, the owner and operator of a resort in Hazelton, markets to customers from Pennsylvania and other states, offering real estate for sale on the property. According to the lawsuit, Eagle Rock uses deceptive comparisons regarding the undeveloped properties’ potential for value growth in order to misrepresent their worth.
The lawsuit aims to prevent Eagle Rock from deceiving customers about its properties and to recoup money for buyers of undeveloped lots.
Attorney General Henry said that Eagle Rock misled customers into thinking they were making wise real estate purchases when, in fact, they were purchasing expensive homes with little market value. In addition to preventing Eagle Rock from selling any more properties based on false information, this civil lawsuit aims to compensate consumers who were defrauded.
Customers are encouraged to report Eagle Rock or its subsidiaries’ business practices to the Bureau of Consumer Protection online, by phone at 1-800-441-2555, or by email at [email protected] if they think they may have been a victim.
In order to sell the undeveloped lots at such high prices that almost no buyers could ever resell and break even unless they constructed a house on the land, Eagle Rock allegedly utilized inaccurate comparisons and other deceptive practices, according to the lawsuit.
Eagle Rock often sells lots for between $30,000 and $100,000; those homes have much lower resale values. According to the lawsuit, undeveloped lots that sell on the secondary market frequently only bring in $5,000 to $20,000, if they sell at all, in contrast to Eagle Rock’s claims made throughout the sales process.
Eagle Rock made it clear in their sales script that prices have increased at astonishing rates: You can invest here and accumulate ownership in something you can also enjoy. Over the last five years, our lot prices have increased by 15% annually on average, and in the last year alone, they have increased by more than 10%.
In a complaint to the Office of Attorney General, one consumer victim described how, for ten years, she and hundreds of others believed that our property had increased in value. This is due to the fact that over 100 resale lots with an average price of $65,000 are available while searching for Eagle Rock lots online. I believed my investment to be respectable. I then made the decision to sell. My lot was not listed at all by the first two realtors I contacted, which is odd. The only lots that are selling on the resell market, I discovered, are those that are priced at $20,000 or less.
According to another customer, Eagle Rock put a lot of pressure on my wife and me to buy one of their lots. They promised us relatively low upfront payments and that the lot’s value will increase in four years or so, by which time there wouldn’t be any more lots available for purchase. They guaranteed that after four years, the property’s equity would cover the price of a four-year university.
According to the lawsuit filed by the Office of Attorney General, Eagle Rock’s sales tactics are against both the federal Consumer Financial Protection Act and Pennsylvania’s Unfair Practices and Consumer Protection Law. For Eagle Rock customers who purchased land based on Eagle Rock’s false promises, the Attorney General is requesting restitution and injunctive remedies. Additionally, the Office is requesting that the court compel Eagle Rock to pay fines, costs, and legal fees for breaking both federal and state consumer protection statutes.
Deputy Attorney General Pat Gavin has filed this complaint in the United States District Court for the Middle District of Pennsylvania.