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On Tuesday March 11, 2014, Senators Charles Schumer (D-NY, Dean Heller (R-NV) and Kristen Gillibrand (D-NY) introduced S. 2101, a bill to amend the Interstate Land Sales Full Disclosure Act (ILSA) to clarify how the act applies to condominiums. If enacted, the ILSA would treat the sales of condominiums still under development in the same manner as condo sales in completed projects. ILSA protects consumers from purchasing property that is not as advertised (such as being unfit for development) by requiring extensive disclosures by project developers. If ILSA disclosure requirements are not fully met, the purchaser may revoke the purchase contract. During the recent economic downturn as markets softened and some high rise condominium developers lowered their asking prices, some early buyers used the ILSA’s reporting requirements to rescind valid real estate contracts. S. 2101 amends the ILSA to treat sales of units in condo projects under development in the same manner as condo sales in completed projects. By doing so, the bill closes the loophole that allowed buyers to use a technicality to rescind otherwise valid real estate contracts due to personal financial reasons or “buyer’s remorse”. The House has already approved a companion bill, H.R. 2600 (Grimm, R-NY; Maloney, D-NY) by a vote of 410-0 late last year. The Senate bill’s cosponsors are working on bringing the bill to the floor early this year.
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