Homeowner denied share of fees

Judge rules on Durham levy

Staff WriterAugust 16, 2006 

— A homeowner was denied Tuesday in his attempt to grab a chunk of the more than $8 million Durham County recently refunded after its school impact fee was ruled illegal.

Senior Resident Superior Court Judge Orlando Hudson denied a request by Kevin E. Jones who sought to join 13 home builders as part of a lawsuit that already has essentially been settled.

Jones had hoped to stake a claim to some of the $8.3 million in impact fee revenue Durham County collected from January 2004 until earlier this year.

Jones' attorney, Edward J. "Trip" Coyne, argued that Jones and others who bought homes in Durham County while the county was collecting the fee were due money back because the cost of that fee was passed along to them in the purchase price of their homes.

In court filings, Coyne accused home builders of deceit, saying that they claimed at one point that they would have to pass that extra cost to buyers and later saying that they bore the financial burden themselves.

In court Tuesday, Coyne played a recording of a radio commercial from earlier this year sponsored by the Wake County home builders association.

In it, one of the narrators said in part, "Impact fees are a hidden tax that everyone pays."

But Hank Fordham, the attorney for the 13 home builders who brought the suit against Durham County, said that Jones' attempt to join the lawsuit at this late juncture was little more than a money grab. Jones filed court papers attempting to join the lawsuit after the state Supreme Court declined to review a lower court's decision in favor of the home builders, effectively ending the lawsuit.

The county has subsequently refunded the money, after placing it in an interest-bearing account until it was distributed.

"This is now the plaintiffs' money. It's in the plaintiffs' account," Fordham said. "The judgment has been fulfilled."

Hudson said little in rendering his decision Tuesday, and Coyne declined to comment except to say, "Obviously, we saw things differently."

While Jones was the only homeowner attempting to join the lawsuit, he had hoped to lead a class action representing the more than 4,000 residents who bought homes while the county was assessing the fee.

In 2003, Durham County became the state's first county to create an impact fee without a state law specifically allowing it. County leaders did so in an attempt to hold builders financially accountable for the extra stresses that their homes -- and the families that would live in them -- would bring to the county's school system.

The county charged builders $2,000 for each new single-family home and $1,155 for every apartment or condo unit they built.

But that fee was never explicitly mentioned on housing contracts, and there is no proof that home buyers ever actually paid all or part of it, said Nick Tennyson of the Home Builders Association of Durham, Orange and Chatham Counties.

"It wasn't specifically delineated, I don't think it's recoverable," he said. "It was paid specifically by the builders involved. They're the ones with the financial risk."

Staff writer Eric Ferreri can be reached at 956-2415 or eric.ferreri@newsobserver.com.

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