U.S. Senate Passes Amendment to the Interstate Land Sales Full Disclosure Act; Kramer Levin Plays Key Role in Development of New Legislation

On September 19, 2014, the United States Senate passed new legislation amending a federal statute, the Interstate Land Sales Full Disclosure Act (ILSA).  The new legislation exempts condominium developers from all filing and registration requirements under ILSA, a crucial victory for condominium developers.  Real estate partner and chair Jay A. Neveloff had a key role in the development and promotion of the bill, which closes a loophole in the 1968 law that was originally meant for raw land sales, not sales of units in condominium complexes. Under the new legislation, developers of new condominiums of 100 units or more will no longer be required to register their buildings with the U.S. Consumer Financial Protection Bureau.  The issue came to the forefront following the 2008 economic crisis, when condo buyers began citing technical violations of ILSA in order to invalidate their contracts, resulting in a mass of federal litigations against developers and stalling the overall housing market recovery. 

Mr. Neveloff, along with litigation partner Jeffrey W. Davis and litigation associate Eileen M. Patt, worked closely with the Real Estate Board of New York (REBNY), New York Congressional Representative Carolyn Maloney, who sponsored the bill in the House of Representatives (along with Representatives Grimm, Nadler and  McHenry) and with New York Senator Charles Schumer who sponsored the bill in the Senate (along with Senators Gillibrand and Heller).  The House of Representatives passed an identical bill in 2013, so the legislation now awaits signature by President Obama.  The exemption for condominiums would take effect 180 days after the new law is enacted.