Steven M. Siegfried, our firm’s founding partner, was quoted in an article in the September 24 edition of the Daily Business Review about the impact of a new federal law to eliminate registration requirements for new condominium and timeshare developments under the Interstate Land Sales Full Disclosure Act.
The article reads:
A bill headed to President Barack Obama’s desk could be a “major victory” for condominium developers and save them millions of dollars in rescinded deposits from clients with buyer’s remorse.
The proposed S.2101 would amend the Interstate Land Sales Full Disclosure Act, which was used by some depositors as a tool to escape regrettable real estate contracts after the market crashed.
Developers and their attorneys are applauding the legislation, saying the [ILSA] law’s stringent technical requirements give buyers a green light to spot reporting loopholes and recoup deposits on condo contracts.
. . . Florida developers have been prime targets under ILSA. State regulations allow them to launch condo sales well before projects break ground, which means developers rely on renderings and forward-looking statements when marketing pre-construction projects.
But that practice cost them in court when judges interpreted the law in favor of “definitive” descriptions in sales and prospectus documents.
“The word ‘anticipate’ was not definitive enough, so there were lots of cases,” said Steve Siegfried, shareholder at Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel. “The courts were interpreting the basic requirements very, very strictly in a manner that almost gave the buyers an opportunity to find some technical reason why there was a noncompliance.”
“The statute is so extensive that attorneys were looking for very questionable errors, and basically arguing that any minor error in the property report allows them to rescind the contract,” added Siegfried, adjunct construction law professor at the University of Miami School of Law. “It was so technical, it became almost abusive and really caused a lot of problems for developers.”