In terms of Jagex development, the Party Room was moved from Seer's Village to Falador because when they were doing King's Ransom, they needed to put the Court House somewhere, and that spot was chosen (it is close to Camelot too).
Perhaps they also opted to move it to Falador to give F2P "something" (Jagex at the time was never one to give F2P much after RS2 was launched.)
Best description might have just been a scenario similar to the quest removal of Romeo and Juliet, where the people that lived in the house just upped and moved away. Not leaving any big reason behind.
Perhaps they got bored of Falador.
Another possibility is they were bankrupted when news started to leak out about Brugsen Bursen creating the Grand Exchange. (Note: King's Ransom was released July 24, 2007, the GE was released Nov 26, 2007).
The market that the players/adventurers don't see fluctuated heavily. So all of the resources they were a part of (similar to people that flip on the GE) cratered in value. Thus, they were bankrupted.
Up to their pixelated eyeballs in debt, they swung a deal to sell their property to the Party Room (then in Seer's Village).
The operators of the Party Room wanted to move to a bigger locale. (Varrock or Ardougne were their first choices, but they couldn't get the permits.) Falador was initially reluctant to also give them a permit to build a new place. But, they didn't have any objections to them re-purposing an existing building. (Didn't hurt that the Party Room made a back room deal to let the White Knights party there free of charge ....... Sir Amik is a bit of a heavy drinker after all ... )
So the family that lived in the mansion managed to pay off their debts, but are now living quietly in some non-descript part of the game world.
15-Sep-2018 14:56:23