The Interstate Land Sales Full Disclosure Act, or ILSA, was first enacted back in 1968, but due to a variety of revisions and amendments over the years, many condo owners and developers can be impacted by it today. The law was originally setup to protect out of state investors from purchasing a plot of land thinking it was very valuable, only to come out to inspect it after the purchase and find that it was of much lower quality than they were led to believe.
Condo owners and developers in Florida often attract out of state investors who want to buy into a condo that is being built or renovated. If the economy (or even an investor’s personal finances) takes a downturn, they may look for a way out of the commitment, and turn to the ILSA. Investors have filed lawsuits to get out of condo investments claiming a wide range of things including that the condos being built aren’t up to the specifications that were originally advertised.
Requirements for Condo Owners
There are many specific requirements for condo owners who want to avoid any trouble related to the ILSA. The following are some of regulations that come up most often in the courts:
- In some cases, condo owners must provide investors with regular updates to the status of the project, which can be quite difficult during an active construction job.
- Condo construction, in some instances, must be completed within two years of taking on investors.
- Roads, gas lines, water lines, electric, and other common aspects of a condo project must be clearly identified and completed along with the condo.
All documents provided to investors and potential investors must also accurately reflect the current or future design of the condo in question. If changes to the plans are made at any point along the way (even minor changes), the investors must be notified properly.
Potential Consequences for Violating ILSA
What makes ILSA especially serious for condo owners is that this a federal law and violating it can be both a civil infraction and a criminal charge. Potential consequences include civil penalties as high as $1000 per violation, a delay or shutdown of a project, and in some cases, up to 5 years of imprisonment.
Take Steps to Avoid ILSA Complications
The often confusing nature of ILSA, along with the potentially very serious consequences of a violation, make it especially important to have an attorney review all aspects of any condo transactions, especially in regards to new construction or renovation. The Law Office of Ray Garcia, P.A. has experience working on ILSA cases and can review your contracts, investment materials, and offer assistance throughout the process. We can also represent you in court should a charge of violating ILSA be brought against you. Whether you’ve been charged, or you’re in the process of building a condo, please contact us to go over all your options.
Law Office of Ray Garcia, P.A.
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