From the September issue: In this weak real estate market, new condo developers possess
relatively little in their arsenals to arm themselves against the
onslaught of purchasers seeking to back out of contracts. But there are
a few measures developers can take to protect themselves without
scaring off potentially legitimate buyers.
Some developers, for instance, are using new clauses designed to prohibit buyers from litigating their way out of deals.
Real estate attorney Adam Leitman Bailey pointed to clauses in
which the buyer agrees to refrain from citing ILSA, the United States
Department of Housing and Urban Development’s Interstate Land Sales
Full Disclosure Act, as an excuse to break a contract. Bailey claimed
that such a clause is not enforceable.
Under ILSA, a 41-year-old consumer protection law, condo developers
with more than 99 units are required to file a project report with HUD,
present a copy of the document to each buyer prior to the purchase
agreement signing, and guarantee delivery of the apartment within two
years.
