Condo developers have a lot on their plate. They need to deal with construction renovation, maintenance, growth, employees, and much more. One of the most important, and often most difficult, aspects of the job is making sure they are in compliance with all legislation that impacts their industry. One often overlooked law is the Interstate Land Sales Full Disclosure Act (ILSA).
This act was first passed back in 1968 due to several revisions and amendments that were put in place since then, however, condo owners and developers need to be aware of what this law does and how it impacts their business. This set of regulations looks primarily at how a condo developer attracts buyers or investors when trying to build a new facility, or make improvements on an existing one.
What Requirements Does the ILSA Have?
As a condo developer, the ILSA has a variety of different requirements that must be met. Violations of these requirements can lead to fines and other penalties that could have a very negative impact on your business, and even your private life. The more important regulations include:
- Utilities – When sending out any type of information about a condo or proposed condo, detailed information about any roads, gas lines, electrical lines, water pipes, and other necessary utility details.
- Timely Completion of Job – Whether creating a new condo building or making significant improvements to an existing one, the law states that the work must be done within two years of taking on investors. There are some exceptions to this rule, however. To learn about the exceptions, speak with your attorney
- Status Updates – When working on a major construction or improvement project, the investors must be given regular updates on the progress. In addition, any changes to the original plans must be sent out to the investors as well.
Violating the ILSA is Very Serious
If you fail to meet the requirements laid out in the ILSA, the consequences can be quite serious. This is a federal law, which means failure to comply could land you in federal court. Civil penalties incurred from violations can go to as much as $1000 per instance, and the courts can also interrupt or even shutdown the project. For especially egregious or repeated violations, it is possible that criminal charges will be filed. These charges can come with up to five years in prison.
Working with an Attorney
The best way to avoid problems with complying with this law is to work with an attorney who has experience in this area. The Reyes Law Group works with many condo developers and boards to help ensure they are in compliance with this, and all other applicable laws. Contact us to discuss your situation and see how we can help.