The Cottage Grove City Council met on June 7 and approved a plan to assist 20 new homeowners left in the lurch by the tragic passing of their contracted builder. The builder, Lakeville-based Mark Elliot Homes, was required to put forward funds for each new home to be held by the city in escrow until completion of the lots.

Mark Elliot Pasvogel, Jr., the late owner of Mark Elliot Homes, died in an automobile accident on I-35 in Lakeville on April 15, when his vehicle struck another car and a semi-truck before going off the road and rolling. As a result of the tragedy, the building company was not able to finish the necessary work to bring the homes up to city code within the contracted time period.

The new homeowners, living in the Parkview Pointe subdivision near Jamaica Avenue South and Military Road, were issued six-month temporary Certificates of Occupancy (CO) upon moving into their homes during the winter. The temporary COs were contingent upon certain exterior requirements being completed by May 19, including an as-built survey, sod, trees, landscaping, and curb boxes. According to the building permits issued by the city, in order to receive a valid CO those items need to be completed or the homeowners would not be allowed to legally occupy their homes.

The city acknowledged the unique predicament the homeowners were in and acted to find a solution. Several of the homeowners recently met with the city council and city staff to discuss their options. The escrowed funds total $129,500, and to remedy the unexpected situation the council approved the release of $6,295 directly to each homeowner to assist in fulfilling the exterior home obligations left unfinished by the builder, bringing them into full compliance provided they complete the items by Aug. 31. The residents were provided reputable contractor options to help finish the required work.

Cottage Grove Senior Planner Emily Schmitz explained the plan at the council meeting, saying, “We understood the best way to be able to help these folks as they are left with muddy yards, no landscaping, and a very challenging situation, was to take some dollars and offer our support in that way, which was the best that we could do. So, we are taking that escrow money that the builder had submitted to the city, and we are returning that to the property owners.”

Councilmember Justin Olsen said, “We had to figure out a way to help them. Essentially, it sounds like what we’ve done is we’ve used some of those escrow funds, redistributed those back to the homeowners.” He added, “I’m really grateful that we were able to find a way forward to help these folks, because it wasn’t their fault. They were in a really tough spot.”

Councilmember Tony Khambata noted that not all cities require escrow guarantees for similar work completion in their building permits, but considering unlikely scenarios like this, he is glad that Cottage Grove does. He then acknowledged that sometimes the escrows don’t fully cover the work that needs to be done, asking, “In this case, are these escrows sufficient in making these homeowners whole, or are they still going to have to foot some of the bill to get this work done?”

Schmitz replied, “There is a chance that it does not cover completely the cost to finish these. A lot of these property owners also didn’t receive the irrigation that they had in their contract either, so there are some dollars that will need to be fronted, unfortunately, from their perspective.”