The Interstate Land Sales Full Disclosure Act: Its Requirements, Consequences, and Implications for Persons Participating in Real Estate Development
The Interstate Land Sales Full Disclosure Act, (ILSFDA), was passed by Congress as Title XIV of the Housing and Urban Development Act of 1968 and became effective on April 28, 1969. The ILSFDA contains provisions for the prevention of fraud and misrepresentation in interstate land sales. In general, persons affected by the ILSFDA can be classified into three groups: 1) those subject to the ILSFDA; 2) those subject to the ILSFDA but exempt from certain requirements; and 3) those who are not subject to the ILSFDA. Although the classification of persons may appear to be relatively straightforward, the process, in fact, is often quite unclear. Ambiguity in classification and characterization of persons is of concern to everyone involved in real estate development because of the serious implications of the ILSFDA. It is the goal of this article to clarify these implications by examining the purpose, requirements and consequences of the ILSFDA. In particular, this article will examine the following aspects of the ILSFDA: (1) its purpose and background; (2) the general requirements for compliance; (3) the conditions for asserting violations; (4) its scope of liability; (5) its procedural aspects; and (6) its implications for persons participating in real estate development.