Antelope Shores, Incorporated

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IN THE MATTER OF ANTELOPE SHORES, INCORPORATED, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Docket C-2738. Complaint, Oct. 1., 1975-Decision, Oct. 11,., 1975 Consent order requiring six Denison, Tex., sellers of undeveloped real estate, among other things to cease violating the Trth in Lending Act by failing to disclose to consumers, in connection with the extension of consumer credit, such infonnation as required by Regulation Z of the said Act. 912 Complaint Appearances For the Commission: John J. Hemrick. For the respondents: Charles L. Gullett Denison, Tex. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and of the Truth in Lending Act and the implementing regulation promulgated thereunder, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that the parties named in the caption hereof and more particularly described below and sometimes referred to hereinafter as respondents, have violated the provisions of said Acts, and the implementing regulation promulgated under the Truth in Lending Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the puhlic interest, hereby issues its complaint stating its charges in that respect as follows:

I. Respondents Antelope Shores, Inc., doing business as Sherwood Shores VII and VIII of Belton; and Castle Land and Livestock Company, doing business as Castle Lake Ranch; and Greenbelt, Inc. doing business as Sherwood Shores IX; and Saint's Roost, Inc. doing business as Mesa Verde Ranch; and Texoma Lakeside Vilage, Inc. doing business as Mil Creek Meadows, are corporations organized existing and doing business under and by virtue of the laws of the State of Texas with their principal offce and place of business located at P. Box 497, 200 S. Austin St., Denison, Tex.

Respondent Sherwood Properties, Inc. of Utah doing business as Sherwood Shores V, is a corporation organized, existing and doing business under and by virtue of the laws of the States of Utah and Texas, with its principal offce and place of business located at P.O. Box 497 200 S. Austin St., Denison, Tex.

Respondent George L. DeArmond is a director of the corporate respondents, and an officer of the corporate respondents except respondent Saint's Roost, Inc. doing business as Mesa Verde Ranch. He formulates, directs and controls the acts and practices of the corporate respondents including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondents. 2. Respondents are now and for sometime last past have been engagedreal estatein the advertising,to theofferingpublic.for sale and sale of undeveloped 3. In the ordinary course and conduct of their business as aforesaid respondents regularly extend, and for some time last past have regularly extended, consumer credit, as "consumer credit" is defined in Complaint 86 F.

Regulation Z, the implementing regulation of the Truth in Lending Act duly promulgated by the Board of Governors of the Federal Reserve System.

4. Subsequent to July 1, 1969, in the ordinary course of their business as aforesaid, and in connection with their credit sales, as credit sale" is defined in Regulation Z, respondents have caused and are causing their customers to enter into contracts for the sale of respondents' real estate. On these contracts, hereinafter referred to as the contract " respondents provide certain consumer credit cost information. Respondents do not provide these customers with any other consumer credit cost disclosures prior to the consummation of the credit sale" as required by Section 226.8(a) of Regulation Z. COUNT I Alleging violations of the Truth in Lending Act, the charges of Paragraphs 1 , 2, 3 and 4 hereof are incorporated by reference herein as if set forth verhatim.

5. By and through the use of the contract, respondents: A. Fail to disclose the finance charge and the annual percentage rate above or adjacent to the place for the customer s signature as required hy Section 226.8(a)(I) of Regulation Z. B. Fail to disclose the number of payments scheduled to repay the obligation as required by Section 226.8(b)(3) of Regulation Z. C. Fail to disclose the "total of payments" using that term as required by Section 226.8(b)(3) of Regulation Z. D. Fail to use the term "cash down payment" as required by Section 226.8(c)(2) of Regulation Z.

E. Fail to use the terms as applicable "unpaid balance of cash price or "unpaid balance" or "amount financed" as required by Sections 226.8(c)(3)(5) and (7) of Regulation Z.

Fail to disclose the "deferred payment price" using that term as F. required by Section 226.8(c)(8)(ii) of Regulation Z. G. Fail to determine on the face of the contract whether the customer expects to use the property purchased from respondents as a principal residence so that it can be determined whether the customer is entitled to any of the rights provided in Section 226.9 of Regulation COUNT II Alleging violations of the Truth in Lending Act, the charges of Paragraphs 1 , 2 3 and 4 hereof are incorporated by reference herein as if set forth verbatim except as to respondents Saint's Roost, Inc. doing ANTELOPE SHORES, INC., ET AL. 915 912 Complaint business as Mesa Verde Ranch and Texoma Lakeside Vilage, Inc. doing business as Mil Creek Meadows.

6. By and through the use of the contract, respondents, except those excluded, have failed to disclose the annual percentage rate with an accuracy at least to the nearest quarer of one percent as required by Section 226.5(b)(I) of Regulation Z.

COUNT II Alleging violations of the Truth in Lending Act, the charges of Paragraphs 1 , 2, 3 and 4 hereof are incorporated by reference herein as if set forth verbatim except as to respondents Castle Land and Livestock Company doing business as Castle Lake Ranch; Saint' Roost, Inc. doing business as Mesa Verde Ranch and Texoma Lakeside Village, Inc. doing business as Mil Creek Meadows. 7. By and through the use of the contract, respondents, except those excluded, have failed to use the term "cash price" as required by Section 226.8(c)(I) of Regulation Z.

COUNT IV Alleging violations of the Trth in Lending Act, the charges of Paragraphs I , 2, 3 and 4 hereof are incorporated by reference herein as if set forth verbatim except as to respondents Castle Land and Livestock Company doing business as Castle Lake Ranch; Greenbelt Inc. doing business as Sherwood Shores IX; Sherwood Properties, Inc. of Utah doing business as Sherwood Shores V and Texoma Lakeside Vilage, Inc. doing business as Mil Creek Meadows. 8. In the ordinary course of their business as aforesaid, respondents, except those excluded, cause to be published advertisements of their property, as "advertisement" is defined in Regulation Z. These advertisements aid, promote, or assist directly or indirectly extensions of consumer credit in connection with the sale of their property. Typical and ilustrative of said advertisements, but not all inclusive thereof are:

A. 11.22 Acre tract - Cash Price $3,310 or owner wil finance with $110 down payment, 10 year payment at $3.83 per month. 8% simple interest. B. Sher.ood Shores - $995 - Wil sell for $695. $70 down and $20 per month. 9. By and through the use of the advertisements set forth in Paragraph Eight hereof, respondents, except those excluded, have stated the amount of the down payment, the number of monthly installments, the period of repayment, and the simple rate of interest without also disclosing the following items in the terminology required by Section 226.8 of Regulation Z:

Decision and Order 86 F. A. ailed to use the term "cash price" to describe the cash price of the property as required by Section 226.1O(d)(2)(i) of Regulation Z. B. Fail to use the term "cash down payment" to describe the amount of the down payment in cash as required by Section 226.1O(d)(2)(ii) of Regulation Z.

C. Fail to disclose the number of installments scheduled to repay the obligation as required by Section 226.1O(d)(2)(iii) of Regulation Z. D. Fail to disclose the "annual percentage rate" using that term as required by Sections 226.10(d)(2)(iv) of Regulation Z. Fail to disclose the "deferred payment price" using that term as E. required by Section 226.IO(d)(2)(v) of Regulation Z. practices set forth above 10. By and through the acts and respondents have failed to comply with the requirements of Regulation duly, the implementing regulation of the Trth in Lending Act, promulgated by the Board of Governors of the Federal Reserve System. Pursuant to Section I03(q) of the Act, such failure to comply constitutes a violation of the Truth in Lending Act, and, pursuant to Section 108 thereof, respondents have violated the Federal Trade Commission Act.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereto with violation of the Federal Trade Commission Act, and the respondents having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jursdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint and waivers and other provisions as required by the Commission rules; and The Commission having considered the agreement and having provisionally accepted same, and the agreement contaning consent order having thereupon been placed on the public record for a period of sixty (60) days, now in furher conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby issues makes the its complaint in the form contemplated by sad ageement, following jurisdictional findings, and enters the following order: 1. Respondents Antelope Shores, Incorprated doing business as . ), 912 Decision and Order Sherwood Shores VII and VIII of Belton; Castle Land and Livestock Company doing business as Castle Lake Ranch; Greenbelt, Inc., doing business as Sherwood Shores IX; Saint's Roost, Inc., doing business as Mesa Verde Ranch, and Texoma Lakeside Vilage, Inc., doing business as Mil Creek Meadows, are corporations organized, existing and doing business under and by virtue of the laws of the State of Texas with their principal office and place of business located at P.O. Box 497, 200 S. Austin St., Denison, Tex.

Respondent Sherwood Properties, Inc., of Utah doing business as Sherwood Shores V, is a corporation organized, existing and doing business under and by virtue of the laws of the States of Utah and Texas, with its principal offce and place of business located at P.O. Box 497 200 S. Austin St., Denison, Tex.

Respondent George L. DeArond is a director of the corporate respondents, and an officer of the corporate respondents except respondent Saint's Roost, Inc., doing business as Mesa Verde Ranch. He formulates, directs and controls the acts and practices of the corporate respondents including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondents. 2. The Federal Trade Commission has jursdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER a It is ordered That respondents, Antelope Shores, Incorprated, corporation doing business as Sherwood Shores VII and VIII of Belton; Castle Land and Livestock Company, a corporation doing business as Castle Lake Ranch; Greenbelt, Inc., a corporation doing business as Sherwood Shores IX; Saint' s Roost, Inc., a corporation doing business a as Mesa Verde Ranch; Sherwood Properties, Inc., of Uta, corporation doing business as Sherwood Shores V; and Texoma Lakeside Vilage, Inc., a corporation doing business as Mil Creek Meadows, their successors and assigns, and their officers, and George L. DeArmond, individually and as an officer or director of said corporations, and respondents' agents, representatives and employees directly or through any corporation, subsidiar, division or other device, in connection with the extension of consumer credit, as consumer credit" is defined in Regulation Z (I2 CFR 226) of the I5 U. C. 160l et seq. Truth in Lending Act (Pub. L. 90-321, forthwith cease and desist from:

1. Failing to disclose the finance charge and the annual percentage , Decision and Order 86 F. rate above or adjacent to the place for the customer s signature as required by Section 226.8(a)(I) of Regulation Z. 2. Failing to disclose the number of payments scheduled to repay the obligation as required by Section 226.8(b)(3) of Regulation Z. 3. Failing to disclose the "total of payments" using that term as required by Section 226.8(b)(3) of Regulation Z. 4. Failing to use the term "cash downpayment" as required by Section 226.8(c)(2) of Regulation Z.

5. Failing to use the term, or terms as applicable unpaid balance of cash price " or "unpaid balance" or " amount financed" as required by Sections 226.8(c)(3), (5) and (7) of Regulation Z. 6. Failng to disclose the "deferred payment price" using that term as required by Section 226.8(c)(8)(ii) of Regulation Z. 7. Failng in any consumer credit transaction or advertisement, to make all disclosures, determined in accordance with Sections 226.4 and 226.5 of Regulation Z, in the manner, form and amount required by Sections 226. , 226. , 226. , 226.9 and 226.IO of Regulation Z. 8. Failng to have the following notice printed in bold face type on the face of each of the respondents' contracts: NOTICE IF YOU EXPECT TO USE THIS PROPERTY AS YOUR PRINCIPAL RESI- DENCE YOU HAVE UNTIL MIDNIGHT OF THE THIRD BUSINESS DAY FOLLOWING THE DAY YOU SIGN THIS CONTRACT TO CANCEL THIS TRANSACTION. IT IS THEREFORE REQUIRED THAT YOU COMPLETE THE FOLLOWING:

I DO NOT EXPECT TO USE THIS PROPERTY AS THE SITE OF MY PRINCIPAL I DO DATERESIDENCESIGNATURE 9. Failing to provide two copies of the notice of the right of rescission to each customer so entitled in the manner and form required by Section 226.9 of Regulation Z.

It is further ordered That respondents Antelope Shores, Incorporated, a corporation doing business as Sherwood Shores VII and VIII of Belton; Castle Land and Livestock Company, a corporation doing business as Castle Lake Ranch; Greenbelt, Inc., a corporation doing business as Sherwood Shores IX; and Sherwood Properties, Inc., of Utah, a corporation doing business as Sherwood Shores V, their successors and assigns, and their offcers, and George L. DeArmond individually and as an offcer or director of said corporations, and ), , ), ), ANTr LA).. 1: "-'''''-n 912 Decision and Order respondents' agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the extension of consumer credit as "consumer credit" is defined in Regulation Z (I2 CFR 226) of the Truth in Lending Act (Pub. L. 90-321, I5 U. C. 160l et seq. do forthwith cease and desist from:

IO. Failng to disclose the annual percentage rate with an accuracy of at least to the nearest quarter of one percent as required by Section 226.5(b)(l) of Regulation Z.

It is further ordered That respondents Antelope Shores, Incorporated, a corporation doing business as Sherwood Shores VII and VIII of Belton; and Greenbelt, Inc., a corporation doing business as Sherwood Shores IX; and Sherwood Properties, Inc., of Utah, a corporation doing business as Sherwood Shores V, their successors and assigns, and their officers, and George L. DeArond, individually and as an officer or director of said corporations, and respondents' agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the extension of consumer credit, as consumer credit" is defined in Regulation Z (12 CFR 226) of the Truth in Lending Act (Pub. L. 90-321, 15 U. C. I60l et seq. forthwith cease and desist from:

11. Failng to use the term "cash price" as required by Section 226.8(c)(1) of Regulation Z.

It is further ordered That respondents Antelope Shores, Incorporated, a corporation doing business as Sherwood Shores VII and VIII of Belton; and Saint's Roost, Inc., a corporation doing business as Mesa Verde Ranch, corporations, their successors and assigns, and their officers, and George L. DeArond, individually and as an officer or director of said respondent corporations, and respondents' agents representatives and employees, directly or through any corporation subsidiary, division or other device, in connection with the extension of consumer credit, as uconsumer credit" is defined in Regulation Z (12 CFR 226) of the Truth in Lending Act (Pub. L. 9O-32I, 15 U. 1601 et seq. do forthwith cease and desist from: 12. Representing, directly or by implication, in any advertisement as "advertisement" is defined in Regulation Z, that no downpayment is required, or the amount of the downpayment or of any installment payment required (either in dollars or as a percentage), the dollar 217-184 0 - 76 - 59 Decision and Order 86 F.T.C. amount of any finance charge, the number of installments or the period of repayment, or that there is no charge for credit, unless it also clearly and conspicuously sets forth all of the following items in terminology prescribed under Section 226.8, as required by Section 226.IO(d)(2): (a) the cash price;

(b) the amount of the downpayment required or that no downpayment is required, as applicable;

(c) the number, amount, and due dates or period of payments scheduled to repay the indebtedness if the credit is extended; (d) the amount of the finance charge expressed as an annual percentage rate; and (e) the deferred payment price.

It is further ordered That the individual respondent named herein promptly notify the Commission of the discontinuance of his present business or employment and of his affiliation with a new business or employment. Such notice shall include respondent' s current business address and a statement as to the nature of the business or employment in which he is engaged as well as a description of his duties and responsibilties.

It is further ordered That respondents deliver a copy of this order to cease and desist to all present and future personnel of respondents who are engaged in any aspect of the extension of consumer credit or in any aspect of preparation, creation, or placing of advertising, and that respondents secure a signed statement acknowledging receipt of said copy of this order from each such person.

It is further ordered That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondents such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of this order. It is further ordered That the respondents herein shall within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. TYSONS CORNER REGIONAL SHOPPING CENTER, ET AL. 921 921 Order