The Interstate Land Sales Full Disclosure Act of 1968 (ILSFDA or ILSA or "Act") was an

act of Congress An Act of Congress is a statute enacted by the United States Congress. Acts may apply only to individual entities (called private laws), or to the general public ( public laws). For a bill to become an act, the text must pass through both house ...

passed in 1968 to facilitate

regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. ...

of interstate land sales, to protect consumers from

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...

and

abuse Abuse is the improper usage or treatment of a thing, often to unfairly or improperly gain benefit. Abuse can come in many forms, such as: physical or verbal maltreatment, injury, assault, violation, rape, unjust practices, crimes, or other t ...

in the sale or

lease A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...

of land. The Act was patterned after the

Securities Act of 1933 The Securities Act of 1933, also known as the 1933 Act, the Securities Act, the Truth in Securities Act, the Federal Securities Act, and the '33 Act, was enacted by the United States Congress on May 27, 1933, during the Great Depression and after ...

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 The United States Department of Housing and Urban Development (HUD) is one of the executive departments of the U.S. federal government. It administers federal housing and urban development laws. It is headed by the Secretary of Housing and Ur ...

. Currently, the responsibility for administering the Act and its regulations is with the

Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mo ...

(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 2014, the Act was amended to additionally apply to condominiums. When the financial crisis of 2008 severely limited the ability for purchasers of newly constructed units to purchase homes they could no longer afford, these contract vendees found attorneys wielding this statute as a weapon to rescind contract for buildings with more than 100 units. Real estate attorney Adam Leitman Bailey pioneered the use of the ILSA provision to get buyers out of contracts by either causing developers to discount prices allowing purchasers to close or if purchasers could not longer afford the home they would be able to terminate the contract. Builders argued that the statute was not meant for sophisticated wealthy buyers and the purchaser's attorneys apologetically, used it to successfully get clients out of contracts and to obtain a refund of the down payment. In other cases using the statute the attorneys for the purchasers received large discounts off the purchase price. On September 19, 2014, a bill unanimously passed the House of Representatives and United States Senate repealing the law for condominiums. On October 6, 2014, President Barack Obama signed the bill into law.

References

External links

Article about ILSA
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Carmel & Carmel Law FirmArticle about ILSA
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Miami lawyer Jared H. Beck
United States federal commerce legislation United States federal legislation articles without infoboxes {{US-fed-statute-stub