Changes to the Interstate Land Sales Full Disclosure Act will be effective March 29, 2015. These changes will exempt condominium developers from the filing and registration requirements of the Interstate Land Sales Act. This amendment will eliminate the need for condominium developers to register condominium projects with the Consumer Financial Protection Bureau and to provide condominium unit purchasers with the property reports and contractual protections required under the Interstate Land Sales Act.
Since condominium developments are regulated on the state level, Congress basically moved to eliminate the dual registration requirements. However, condominium developers will still be subject to the fraud and misrepresentation provisions of the Interstate Land Sales Act and will have to comply with all provisions of state law regarding condominium purchases.
During the recent housing crisis, purchasers of condominiums had used technical violations of the Interstate Plan Sales Act as a creative method to back out of condominium purchase contracts and retain their deposit despite the terms of the condominium purchase agreement.