disclosure

The Federal Interstate Land Sales Full Disclosure Act (“ILSA”) was originally passed in 1968 in an effort to protect consumers from fraudulent land sales practices.  The ILSA previously required developers of certain types of condominiums to register new condominium projects with the Department of Housing and Urban Development (“HUD”) and to provide a property report to prospective purchasers.  Pursuant to 15 U.S.C. 1702, the ILSA previously allowed condominiums to be exempt from registration with HUD if the project was less than 100 units and the project was to be completed within 2 years.  If a Developer did not meet the exemption requirements of 15 U.S.C. 1702, and failed to provide the required property report, a purchaser was allowed to rescind the sale within two years after signing the purchase agreement.  The ILSA was amended on September 18, 2014 so that Developers no longer need to register with HUD and no longer need to provide property reports to prospective purchasers. The change will take effect 180 days after the President signs the legislation that has been approved by the House and Senate.  The elimination of the registration and disclosure requirements should lessen the paperwork for Condominium Developers.  The amendment to the ILSA does not eliminate a Michigan Condominium Developer’s obligation to comply with the state law disclosure requirements set forth in MCL 559.184a.