The sale of real property, including subdivided lots, completed homes, and condominium units, is subject to regulation by the U.S. Department of Housing and Urban Development ("HUD") pursuant to the Federal Interstate Land Sales Full Disclosure Act (often referred to as "ILSFDA" or "ILSA") and to state interstate land sales laws.
To protect its investment, every real estate developer should understand the applicability of federal and state land sales laws to a particular project. It is critical that everyone on a developer's team, business, marketing, and sales people, understand the importance of complying with land sales laws, including understanding the activities that trigger ILSFDA and state land sales laws, compliance requirements and the potentially devastating impact violations of federal and state land sales laws can have on a developer.
Understanding how federal and state land sales laws are triggered and available exemption and registration options is critical to helping to protect a developer from inadvertently violating land sales laws that could result in monetary penalties and allow purchase contracts to be rescinded, which rescission rights may survive closing in some instances. Development of a comprehensive land sales compliance program should be an integral part of any real estate development plan. Our experienced team works with developers on the implementation of efficient and comprehensive land sales compliance strategies. We help our clients design marketing strategies that take advantage of available exemptions from registration under ILSFDA and state land sales laws. When registration under ILSFDA or state land sales laws is required, we seek to help our clients maximize available abbreviated filing options so our clients can streamline the registration process. We counsel our clients on implementing sustainable land sales compliance programs for each project including sales training, advertising disclosures, and record retention.