The Interstate Land Sales Full Disclosure Act - A Land Mine Ready To Explode For Condo Developers?

The Interstate Land Sales Full Disclosure Act (ILSA) is a federal law was passed in the late 1960s, the buyer will one protection from the state. Those were the days when parcels of open land would be made known to distant speculators as promising wonderful development opportunities. Only when the land was acquired, and traveled the buyer to take a look at the package for the first time, it would be a worthless, isolated stretch of desert or swamp with little or noPotential to be necessary for the infrastructure or resources to maintain a viable development project.

Was adopted in the years since ILSA, the law was held to condo developments. And know that real estate observers, pre-construction condo investments appear in places like South Florida, many of the problems that are free to present land sales to once. In particular, announced before the construction condos are so-glamorous out-of-state investmentOpportunities - a chance to earn money, while the truest sense of the word has an innovative piece of paradise. But the luster soon wanes when the market is starting to bottom and the buyer is unable to sell the property to which he or she examines the development with a critical eye. At this time the buyer realizes how (the buildings which may not yet be fully developed) promised differs from what he or she believes was before signing the deed and the buyer beginsfeel cheated.

One of the essential requirements of the ILSA is that the developer of the development with the U.S. Department of Housing and Urban Development Registers ( "HUD") and features a thick "Property Report" to the buyer before signing the purchase agreement. Not surprisingly, developers do not want to deal with this somewhat onerous requirement if they do not have it. And in fact there are a number of exceptions that developers can use to taketo avoid the registration requirement and Property Report.

A very important exception, which is widely misunderstood, is the so-called "two-year" liberation. In principle this is a developer needs to register with HUD and with a property report if the developer is a contractual obligation to the development within two years after the date offers to build the buyer signs the purchase agreement. However, the "two years' exemption is not as easy as it may seem, becauseWhile the developers can search "qualify" every two years by limiting the buyer's commitment to action in the event that the two-year deadline is missed, are Florida court and not in its strict interpretation of the exemption, so the developer can actually lose the exemption if it qualifies, the period of two years in such a manner.

Of particular importance in this last point is 15 USC § 1703 (c), a section of the ILSA, which is in the case of a property report is requiredThe buyer is not provided, however, one of the purchase agreement before signing, the buyer has the option of revoking the contract. Given the current real estate market, it is not surprising that there are a number of cases that currently survive in the docket in Florida state and federal courts that buyers who (are anxious to have been) from their apartment contracts were not submitted a Property Report than they should have been. Time will tell whether the courts agree with these buyers and find that theFailure to provide a status report is a sufficient basis to terminate their contracts. (Here in my previous articles on issues related to the buyer's right to rescind to Florida state law, which differs from the federal appeals under ILSA Lake).

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