President Barack Obama has signed an amendment to the Interstate Land Sales Full Disclosure Act of 1968 into law.
The amendment exempts condominium units from filing and registration requirements mandated by ILSA, which was intended to protect consumers from fraud and abuse in connection to the sale or lease of land. The law was almost never used until the crash of 2008. Afterward, it became a strategy for condo buyers to get out of their deposits, as been reported previously by The Real Deal.
“ILSA was enacted decades ago to deal with abuses relating to the sale of swampland,” attorney Jay Neveloff said in a prior interview with TRD. Neveloff has been lobbying to have the measure passed for years. “There were provisions of that law that made it very clear that it didn’t deal with condos,” he added.
Compliance with ILSA used to be time consuming and expensive for developers of condo projects, because it required detailed disclosures to buyers and contract provisions that could be bad for developers, according to JDSUPRA Business Advisor. Now, developers won’t have to register with ILSA anymore to provide buyers with property reports, rescission rights or other contractual protections. [JDSUPRA Business Advisor] — Claire Moses