On the verge of government shutdown, the United States House of
Representatives votes in a bipartisan 410-0 vote to...
... wait for it... amend the Interstate Land Sales Full
Disclosure Act! Clearly, there is no time like the imminent
shutdown of the federal government to tweak a 44-year-old piece of
Although this development comes at a curious time, it is a
potentially very significant piece of legislation affecting all
types of sellers of real estate property throughout the United
The Interstate Land Sales Full Disclosure Act (ILSA) became
effective on April 28, 1969. Its initial objective was to protect
the public from certain enterprising characters who identified the
sale of swamp lands, mountain tops and the likes as a very
lucrative business venture.
Fast forward to the "Great Recession" and we find ILSA
transformed from a consumer shield to a powerful weapon used to
great effect to "channel buyer's remorse". A
key development in that transformation was a line of court
decisions which held that a "lot" for purposes of ILSA
includes a condominium unit. Combined with the buyer rescission
rights contained in the law (for a seller's failure to
register), ILSA quickly became a favorite vehicle for purchasers
seeking a way out of real estate deals they no longer liked.
Which brings us to H.R. 2600. The bill essentially seeks to
specifically exempt condominium units from the registration and
disclosure (but not from the anti-fraud) requirements of ILSA,
which will be a significant limitation on a buyer's rescission
rights under current law.
The House passed the bill unanimously (by a 410 to 0) vote on
September 26. As of this writing, it has been referred to the
Senate's Committee on Banking, Housing, and Urban Affairs.
Stay tuned for further updates.
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