A fire-gutted home on a pristine street: The twisted tale of the house on Blue Highlands Drive
LAKELAND — Thomas Gebregergis had $100,000 in cash and was looking to secure a spacious second home. He turned to the foreclosure market and offered $28,100 on what he thought would be a dream property for him and his family.
Instead, he ended up with a nightmare: a home gutted by fire at 2121 Blue Highlands Drive, in a relatively young and pristine development off Airport Road in west Lakeland.
The previously beautiful four-bedroom, three-bathroom house spanning 2,600 square feet burned mostly to the ground nearly two months before Gebregergis purchased the home at auction. But he didn't know that.
When he found out his offer had been accepted on May 28, Gebregergis' initial reaction was to jump for joy with his wife. He couldn't believe his luck.
"I just pay immediately from my bank because I felt like someone — I was just kind of nervous, 'Oh, they're gonna cancel the sale,'" Gebregergis said.
The next day, Gebregergis, his wife and kids drove 45 minutes from their home in Kissimmee to view the property in person for the very first time. A week later, Gebregergis filed in court to have the sale thrown out.
Gebregergis' legal challenge was just the latest in a string of financial and legal woes levied against the property that suffered from an explosion and burned in April.
"It's a very unusual situation," Lakeland Assistant City Attorney Jerrod Simpson said. "I haven't seen anything like this."
What remains of the house, situated in one phase of the expansive Lakes at Laurel Highlands development, has gone untouched for nine months. Neighbors are nervous about the health and safety hazards the property poses, with rubble and glass littering what remains of the structure and the yard.
Simpson said Gebregergis has pledged to demolish what's left of the home by the end of January. If he doesn't, Lakeland is prepared to go back to court.
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Property was tied up in foreclosure
Problems with the property in question can be traced to August 2019.
More than two years ago, the Lakes at Laurel Highlands Homeowners Association served a notice to the two previous property owners, Jerry Bryant Arnette Jr. and Jason Eric Smith.
The notice informed the pair that they owed the association $377 — $224 in assessment fees, a $25 late fee, a $125 administrative fee and $3 in interest. The association informed the owners that it would file a claim of lien against the property if they didn't receive payment within 45 days. A property lien allows the holder to take property if debts aren't paid.
Later, the association gave the owners another 45-day notice that the next step would be a foreclosure claim. The debt had risen to $966.13 with interest.
Finally, in March 2020, the association filed a complaint for lien foreclosure and monetary damages. But that July, the HOA had to file an extension because after 120 days, Jason Kromash with Acer Legal Resources had been unable to locate either named defendant.
While Smith's mailing address was listed as 2121 Blue Highlands Drive, two other addresses were found in connection to him. But Kromash was unable to serve Smith at any of his three listed addresses.
The property in question was reported as "vacant and unoccupied." The grass was overgrown and there was a sticker on the wall that said "found vacate, no electricity," according to court documents.
That home was the only available address for Arnette, who also couldn't be located. Arnette was reached by phone by Kromash. According to court documents, Arnette told Kromash that he had been in the hospital for a month and would be there for two weeks, though he declined to give the name of the hospital or his current address. He told Kromash to call him back in two weeks but never answered.
Consequently, the court ruled in favor of the HOA, deciding that the final debt amounted to $6,513.75, including the unpaid assessment fees, interest and attorney fees.
To cover those costs, Judge Susan Barber for the county court for the 10th Judicial Circuit ruled in late April — after the fire — that the home would be sold to the highest cash bidder on May 28.
Buyer's regret
Gebregergis won that bid. On June 4, he filed a motion to have the court set aside the sale because he'd had no idea the house he bought had burned to the ground.
Gebregergis said in researching buying homes through the foreclosure process, he'd seen properties sell for a fraction of the listed property value. After seeing the home in question valued at over $200,000 on Zillow and in the county's auction notice, he decided to go for it.
The Zillow page for the property does now include a note that the property "is damaged due to fire or other unknown issues."
It was only after he saw the remaining husk of what he'd hoped would be his forever home that Gebregergis learned of the fire and that the Lakeland Fire Department was treating the incident as "suspicious."
Gregory Sanoba, a lawyer representing Gebregergis, asserted that the HOA should have known the residence had been destroyed prior to the foreclosure sale.
“Plaintiff took no steps to inform the Court or any Public Records of the total destruction of the residence nor LFD’s active investigation," the motion reads. "Plaintiff took no steps to provide actual or constructive notice that the property’s assessed value of $204,785.00 was, or may have been, grossly inaccurate. Plaintiff took no steps to delay or cancel the foreclosure sale that was being investigated by law enforcement for potential criminal misconduct.”
"I felt I was tricked at the beginning," Gebregergis told The Ledger. "This should be a scam. But everyone says this is actually legal."
The HOA argued in a June 11 response that it had no obligation to inform Gebregergis as to the condition of the property. The plaintiff said that by arguing the HOA should have kept him up to date, Gebregergis "attempts to shift Bidder's obligation to conduct his own due diligence with respect to the Property he bid on and ultimately acquired at the May 28, 2021 sale to others."
Plus, the response notes, just the land for the property in question is valued at $42,000, so Gebregergis paid less than what the property is worth regardless of the status of the physical home.
The court sided with the HOA in June.
“Mr. Gebregergis researched the property via the internet, but did not personally view the property prior to the foreclosure sale," the ruling reads. "Had he personally inspected the property, the fire damage would have been clearly visible and obvious."
The judge's ruling notes that the fire that destroyed Gebregergis' property was treated as suspicious. Lakeland Fire Marshal Cheryl Edwards said the investigation was turned over to the state because of its suspicious nature the night of the fire.
The state found the cause of the fire to be "undetermined" and the case was closed in August because of insufficient evidence.
The certificate of title was awarded to Gebregergis in August. But before that, at the end of June, defendant Arnette made his first appearance since lawyers had first tried to locate him in March.
Jessica De La Cuevas with De La Cuevas Law represented Arnette in court filings, where Arnette transferred his legal authority to Get Liquid Funding LLC. The company was introduced to recover surplus funds for Arnette in the sale of his property.
In November, the court ruled Arnette could get his cut of the sale. Between the original lawsuit and attorney fees incurred when Gebregergis tried to get the sale thrown out of court, the HOA was entitled to $8,816.67, according to court records. Of the surplus funds, Arnette is entitled to half, or $9,641.67.
At the eleventh hour: a second lawsuit
But there's still funds to be doled out.
On May 12, a little less than two weeks before Gebregergis acquired the property at auction, another foreclosure complaint was filed — this time by Freedom Mortgage Corp., the mortgage holder for the home.
In the complaint, the plaintiff alleges that the previous owners, Arnette and Smith, executed a mortgage in June 2018. They have missed every payment since the one due on Oct. 1, 2019.
According to the compliant, the two owners owe $242,634.04 between the principal note and mortgage, interest and title search expense.
The mortgage company wanted the court to force another sale of the home to recover the funds. But the introduction of a new owner through a separate foreclosure lawsuit, plus intervention from the city of Lakeland, complicated things.
Because Freedom Mortgage had filed a foreclosure claim, the city was unable to demolish the remaining structure and then file a lien against the property for the cost. As a result, the city filed for an injunction that would allow it to go onto the property, assess it and gather demolition bids it could then distribute so one of the involved parties could tear down the burned building.
COVID-19 slowed the city's ability to gather those bids, but the lowest one eventually gathered came in at $8,390. That was in November.
On Dec. 6, Freedom Mortgage filed a claim to stay its motion to foreclose on the property in question while it pursues an insurance claim. Gavin MacMillan, an associate attorney representing Freedom Mortgage, told Simpson in an email that the insurance claim was initially denied in October, but the mortgage company is requesting a reconsideration.
MacMillan did not return a request for comment on the state of the insurance claim.
In its request for a stay, Freedom Mortgage argues that the outcome of the insurance claim impacts the company's need for a mortgage and forced sale.
"Plaintiff is currently in the process of resolving its insurance claim which will have a direct impact on its damages and therefore the amount sought in a final judgment of foreclosure," the motion reads. "Without a determination as to the coverage and any potential recovery Plaintiff is uncertain as to the final amount due under the terms of the loan."
The motion also notes potential benefits for Gebregergis.
"Because the house is destroyed, Mr. Gebregergis would like the opportunity to reasonably settle the matter without paying the entire amount currently due," the motion reads. "Of course, the application of any insurance proceeds would benefit Mr. Gebregergis because the outstanding amount due would be reduced by the insurance proceeds and may facilitate a resolution of this matter."
The additional foreclosure means that Gebregergis' future ownership of the property is up in the air. But for now, he's liable for any damages or injury that might occur should the structure collapse.
As a result, Gebregergis told the city he'd have the property demolished by the end of January. If he doesn't follow through, Simpson said, the city will go to court to determine who will pay for the demolition.
"As far as the city knocking it down, because of the liens statute, it makes it so that the taxpayers would have to pay for that expense and ultimately for the benefit of the bank if they end up taking the property," Simpson said. "We don't want the taxpayers to pay for that."
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'We are running out of time'
While the intricacies play out in court, neighbors need relief now.
In early December, Simpson sent an email to MacMillan stressing the urgency of the demolition.
"I received an update from the neighbors this morning that a portion of the structure fell off and caused some property damage to a neighboring fence/gate as well as reports of children climbing into the building apparently to take selfies," Simpson wrote. "We are running out of time."
Nathaniel Hago lives to the left of the property in question. He moved with his wife and three children in May without seeing the home, which he's renting from a landlord. He sent someone in advance to view the property.
Hago said that with hurricane season over, he's not too concerned about the remaining structure. But there were a couple of close calls.
"There were a couple instances where we're like okay, if they had flown a little bit farther, it might have hit the house," Hago said. "So that has been a concern."
Hago said his only real concern are animals gathering in the rubble. But he hasn't noticed any strange odors and no pieces of the structure have fallen into his yard.
"Since I don't own a house and it's not something I, you know property value wise that I'm concerned about, right, it doesn't really affect me," Hago said. "But I guess the neighborhood is just so much nicer than from where we came from up in Connecticut. So we're just like okay, well, a burnt house is not the worst thing."
Simpson said the city is pushing for demolition to give neighbors a voice, despite the unusual situation.
"It's definitely been a confusing process in having the foreclosure and everything," Simpson said. "It's unfortunate. We'd like for it to have been taken care of a lot sooner."
Gebregergis said he just wants to make sure everyone is safe.
"I don't want anyone to be hurt just because of my poor decision," Gebregergis said. "I messed up, I lose money, on top of that, I don't want anyone to be hurt. That's my goal. After that, we'll see if I'm lucky. If God will give it to me and at least I can sell it or I can recover my money."
Maya Lora can be reached with tips or questions at mlora@gannett.com. Follow her on Twitter @mayaklora.
This article originally appeared on The Ledger: Lakes at Laurel Highlands home destroyed by fire to be torn down
