In Citrus Springs, FL—just 90 minutes from Orlando—there is a difficult situation brewing for homeowners who purchased new construction from Van Der Valk Construction.
The Citrus County-based homebuilder filed for Chapter 11 bankruptcy on April 30, and bankruptcy documents show that at least 58 homebuyers have been affected.
But all hope might not be lost, according to two Florida attorneys who spoke with Realtor.com®—even if that’s how the new homeowners might be feeling right now.
Florida homebuyers stuck with unfinished homes
Frank Sherrill hired Van Der Valk Construction in September 2022 to build his retirement home—a 1,430-square-foot house with three bedrooms and two bathrooms.
He bought the land upfront for $20,000, then put down 15% of the $184,900 cost of the home.
Sherrill tells Realtor.com he didn’t see any red flags in the beginning.
“I saw a finished house that was the exact same model as mine,” he says. “Plus, I had built a new home up north before that was in a subdivision, and everything had gone smoothly.”
He figured this experience would be the same. However, he has paid nearly $200,000 for his planned retirement house, and work completely stopped last summer.
“It’s a living nightmare,” Sherrill says.
The cabinets and lighting are in—but there is no trim work, plumbing, or interior doors. Some rooms also lack finished flooring.
Because his home was left in this condition, he was forced to get a rental, which was later wiped out by Hurricane Helene—causing Sherrill even more stress.
“I just want peace,” says Sherrill. “I don’t want this aggravation anymore. It’s the first thing I think about when I wake up in the morning.”
One thought that hangs over Sherrill’s head is that he still technically owes the remaining 10 percent of the contract, which totals $18,500.
“I have a bad taste in my mouth about this house—I don’t want to live here,” says Sherrill. “If I have to hire a general contractor to finish it myself, I’m going to do that and sell. I will probably lose about $100,000, but I just want this to be behind me.”
Meanwhile, Madeline Frets spent nearly $300,000 on her Van Der Valk Construction retirement home, which remains unfinished nearly 3.5 years later.
“It’s heartbreaking. It’s so unfair. Truly unfair,” Frets, a 9/11 survivor, told ABC Action News.
Since her house is still not ready, Frets was forced to buy a mobile home near the property. After paying the expenses of essentially living in two homes, she says just $70,000 remains in her 401(k).
Van Der Valk Construction reports more than $1 million in liabilities but less than $100,000 of assets in bankruptcy court filings, according to the Citrus County Chronicle.
Under bankruptcy law, Van Der Valk will continue to operate and remain open while legal actions, including lawsuits, collections, and repossessions, are temporarily suspended. This pause allows the company time to propose a reorganization plan, which is due by July 29, 2025.
The plan must be reviewed and confirmed by the bankruptcy court and gain approval from a majority of the company’s creditors. As part of the process, Van Der Valk is required to provide creditors with a detailed financial statement and an assessment of the plan’s viability before the vote takes place.
The company is represented in the proceedings by Ocala attorney Richard A. Perry. Realtor.com contacted Van Der Valk Construction and its attorney but did not receive a response before the time of publication.
What can homeowners do when a builder goes bankrupt?
Realtor.com spoke with two Florida-based attorneys, Tesha Allison and Steven Berman, on Sherrill and Frets’ behalf.
Neither has spoken to them directly, nor do they represent them—so their thoughts should not be construed as legal advice and are for informational purposes only.
“Legally speaking, homebuyers left with unfinished homes after a builder’s bankruptcy face a complex set of issues—but there may be options,” says Allison
Can they get their money back?
Possibly, says Allison—but it depends on the terms of the purchase agreement and whether the builder breached those terms.
“Buyers should also check if the builder had insurance, a surety bond, or a construction warranty in place,” she says. “These protections can sometimes cover damages or complete the build, especially if the builder was working under a state or municipal development license.”
Berman says buyers should also take a look at that bankruptcy case.
“If they are creditors in the case, they may be able to receive a distribution,” he says.
Can they cancel their mortgage?
Generally, no, says Allison. The mortgage is a binding loan agreement between the buyer and the lender. So even if the home is incomplete, the loan still stands.
“Unless the property becomes legally uninhabitable in a way that triggers a clause in the loan documents, which is rare, cancellation is unlikely,” says Allison. “The best hope is to negotiate a modification or deferment directly with the lender.”
Are there any state-funded groups that can help?
The state-funded Florida Homeowners’ Construction Recovery Fund program helps homeowners recover financial losses due to fraudulent or dishonest practices by licensed contractors.
“This provides consumers an avenue to file a claim against this fund if they’ve lost money when a contractor fails to complete a job,” says Berman. “It’s specifically set up for people who didn’t get their job done.”
Can they hire their own contractors and build on the land themselves?
“Yes—if the title has been transferred to the buyer and there are no legal encumbrances or liens,” says Allison.
She says buyers should also verify whether the permits remain valid and if any outstanding code violations or building department issues exist.
“In some cases, insurance or bond coverage may assist in funding the completion,” she says. “And check with the city code department on what is allowed.”
