A law implemented in 1968 to protect would-be swampland purchasers is now the best friend of home buyers who went into contract at the height of the bubble and are now trying to escape paying well-above market value and get back their deposits.
Under the Interstate Land Sales Full Disclosure Act (ILSA), minor technical violations can unwind a whole deal. Buyers are getting out of deals because of things like the developer:
* Didn’t give a legal description of the property
* Didn’t register the building with the Department of Housing and Urban Development
* Didn’t inform them of their rights under ILSA
* Didn’t file the contract with the city register
Never mind its name, ILSA also applies to properties in the same city and state as the buyer.
Developers avoid ILSA if they complete the project within two years and are building fewer than 100 units.
Previously judges weren’t very sympathetic to ILSA cases but they’ve softened with the economic downturn.
If you think you have a case under ILSA, you can contact HUD at hsg-respa at hud dot gov to see if it applies to you. And then, lawyer up, cowboy.