This month, we discuss Bacolitsas v. 86th & 3rd Owner LLC,1 in which the U.S. Court of Appeals for the Second Circuit reversed a lower court decision granting plaintiffs summary judgment on their claim for revocation of an executed purchase agreement for a luxury condominium unit in New York City. The court’s opinion, written by Judge Peter W. Hall and joined by Judge Raymond J. Lohier Jr. and Judge Robert D. Sack, considered a matter of first impression in this circuit: whether the Interstate Land Sales Full Disclosure Act (ILSA)2 requires that the description of the lot, as opposed to the agreement in which that description is embedded, be “in a form acceptable for recording.”
ILSA. Enacted in 1968, ILSA was “designed to prevent false and deceptive practices in the sales of unimproved tracts of land by requiring developers to disclose information needed by potential buyers.”3 The Bacolitsas case turned on the reading of §1703(d), which provides:
Any contract or agreement which is for the sale or lease of a lot…and which does not provide
(1) a description of the lot which makes such lot clearly identifiable and which is in a form acceptable for recording by the appropriate public official responsible for maintaining land records in the jurisdiction in which the lot is located;
may be revoked at the option of the purchaser or lessee for two years from the date of the signing of such contract or agreement.
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