Interstate Land Sales Full Disclosure Act of 1968

The Interstate Land Sales Full Disclosure Act of 1968 (ILSFDA or ILSA or "Act") was an act of Congress passed in 1968 to facilitate regulation of interstate land sales, to protect consumers from fraud and abuse in the sale or lease of land. The Act was patterned after the Securities Act of 1933 and required land developers to register subdivisions of (currently 100 or more) non-exempt lots or condominium units. Originally, the filings were to be with the United States Department of Housing and Urban Development. Currently, the responsibility for administering the Act [1] and its regulations [2] is with the Consumer Financial Protection Bureau (CFPB). A regulated developer is to provide each purchaser with a disclosure document called a Property Report. The Property Report contains relevant information about the subdivision and must be delivered to each purchaser before the signing of the contract or agreement and gives the purchaser at a minimum a 7-day period to cancel the purchase agreement.

In 2013, the bill To amend the Interstate Land Sales Full Disclosure Act to clarify how the Act applies to condominiums (H.R. 2600) was introduced into the United States House of Representatives [3] by Rep. Carolyn B. Maloney. On September 27, 2013, the House of Representatives passed H.R. 2600 by a vote of 410-0.[4] The bill would provide an exemption for condominiums from ILSA's registration requirements and would apply to all new constructions after enactment.[5]

Currently, condominium developers who fail to comply with ILSA, or satisfy an exemption, are at risk of facing claims by buyers seeking to rescind otherwise valid purchase contracts within two years of the signing of the contracts. As a result of the recent economic downturn, a significant number of these claims were filed in courts throughout the country by buyers who signed purchase contracts prior to the downturn, seeking to avoid their contractual obligations to close when home prices fell and the real estate market plunged. This change in federal law would be significant for developers of condominium projects who have, historically, had to satisfy a statutory exemption or comply with rigorous registration and disclosure requirements, even though condominiums were not contemplated when ILSA was enacted in 1968.[6]

References

  1. ↑ 15 U.S.C. 1701 et seq.
  2. ↑ 12 CFR Parts 1010, 1011, and 1012
  3. ↑ "H.R. 2600 - Summary". United States Congress. Retrieved 23 September 2013.
  4. ↑ "On The Verge Of Government Shutdown, US House Of Reps Unanimously Votes To Amend...". 2013.
  5. ↑ "Bipartisan Maloney Bill Clarifying Condominium Fraud Law Passes House 410-0". 2013.
  6. ↑ "A glimmer of hope for condominium developers". 2013.

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