CONGRESSWOMAN ELISE STEFANIK
On Wednesday, September 25, 2013, the House will consider H.R. 2600, a bill to Amend the Interstate Land Sales Full Disclosure Act to Clarify how the Act Applies to Condominiums, under a suspension of the rules. The bill was introduced on June 28, 2013 by Rep. Carolyn Maloney (D-NY) and referred to the Committee on Financial Services.
H.R. 2600 amends the Interstate Land Sales Full Disclosure Act (ILSA) of 1968 to exempt condominium sales and leases from certain registration and disclosure requirements if they are not already exempt from these requirements.
The Interstate Land Sales Full Disclosure Act (ILSA) of 1968 was enacted in order to regulate interstate land sales as well as to protect consumers from fraud and abuse in land exchanges. This law specifically protects out-of-state land purchasers who are unable to see the land prior to purchase from fraud. The law provides buyers a right of action to rescind contracts if they had been subject to fraud. In the 1980’s, courts ruled that ILSA applied to vertical developments, such as condominiums, which required developers to file repeated disclosures for every unit sold or leased.
During the economic downturn, buyers began using ILSA as a basis to rescind contracts for economic reasons, an unintended effect of the legislation. H.R. 2600 distinguishes condominium sales from other land sales by exempting condominiums from ILSA’s registration requirements. However, it still allows consumers the right to rescind contracts in the case of fraud.
No formal CBO estimate is currently available. However, it is estimated that this legislation will not have a significant impact on the federal budget.
For questions or further information contact the GOP Conference at 5-5107.