On Friday, September 26, 2014, President Obama signed into law H.R. 2600, which made several important changes to the Interstate Land Sales and Full Disclosure Act (ILSA). In short, H.R. 2600 exempts the sale of condominium units from the registration and disclosure provisions of the ILSA (i.e., a “partial exemption” akin to the so-called “100-lot exemption” and the likes). The anti-fraud provisions of the ILSA will, therefore, still remain in place in the absence of a “complete” exemption, which may still be available with appropriate advance planning. H.R. 2600 will go into effect 180 days after its signing by the president, on March 25, 2015.
After the economic downturn, many purchasers sought to cancel land sale contracts by any means necessary. ILSA became a particularly popular and successful rescission of contract tool, often on very technical grounds completely outside of the framework of the deal struck by the parties to the contract.
H.R. 2600 should bring more stability and predictability to condominium unit sales by reducing the likelihood of unexpected (and unwarranted) contract rescissions by purchasers. It will also help developers of larger scale projects bring their product to market faster by disposing of the registration requirements of ILSA, which could often add months to the binding-sales-contracts timeline.
The passing of H.R. 2600 was approved unanimously by the House of Representatives on September 27, 2013 and was also approved unanimously without amendment by the Senate on September 18, 2014.