The Interstate Land Sales Full Disclosure Act, 15 U.S.C. 1701 (ILSA) was designed to protect uninformed buyers from purchasing undeveloped home sites on mountain tops in Florida and on the oceanfront in Wyoming. Yet, when the economy receded and the housing bubble burst in 2007, well-heeled, sophisticated, pre-construction buyers watched the values of their units decrease as construction progressed. Remorseful buyers seized upon ILSA as a way to rescind their sales contracts. Hundreds of buyers sought economic relief in Florida’s federal and state courts and Florida became a hotbed for ILSA litigation.

ILSA never was intended to relieve knowledgeable purchasers from the repercussions of a world-wide recession. Congress passed ILSA in 1968 to protect purchasers — who often were out-of-state — from unscrupulous sellers of unimproved home sites that allegedly were ready for development but actually were under water or usable only for grazing. An anti-fraud consumer protection statute, ILSA uses disclosure to discourage misrepresentations, making it unlawful to sell or lease a non-exempt lot without first furnishing the buyer or renter with a property report that meets the statutory guidelines. Failing to provide the report before the contract is signed permits the buyer or lessee to revoke the contract within two years after signing the agreement. The buyer or lessee is then entitled to a refund of any deposits made and reasonable attorney fees and costs.

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