Are the Developers of Scenic Wolf and Breakaway Village in Violation of the Interstate Land Sales Full Disclosure Act?

The Scenic Wolf and Breakaway resorts are located in Mars Hill, North Carolina. The sale of land in these adjoining subdivisions should be subject to the rules and regulations set forth in the Interstate Land Sales Full Disclosure Act. The survey for Phase 1 of Scenic Wolf Mountain Resort was recorded on June 9, 2004 and the survey for Breakaway on September 19, 2005. A search of North Carolina Subdivisions on the U.S. Department of Housing and Urban Development website indicate that the developers, Scenic Wolf Development L.L.C. and Breakaway Land Company, L.L.C. have not registered their developments.

Interstate Land Sales Full Disclosure Act

In 1968 Congress passed the Interstate Land Sales Full Disclosure Act to protect consumers from fraudulent and abusive land sale practices. This bill requires land developers to register their subdivision plans for a 100 or more non-exempt lots with the U.S. Department of Housing and Urban Development (HUD) and to provide purchasers with a detailed Property Report.

The Penalty for Failure to Comply

The following was taken from the HUD Interstate Land Sales Full Disclosure Act website:

Contact Rights Concerning Property Reports

It has always been the law that if the developer has an obligation to register with the Interstate Land Sales Division, the developer or sales agent must give the buyer a copy of the current property report before the buyer signs a contract. Otherwise, the buyer has up to 2 years to cancel the contract and get his or her money back. That fact must also be clearly set forth in all contracts. You may have the right to void the contract if the subdivision has not been registered with HUD or you were not given a property report.

Furthermore, if the developer has represented that it will provide or complete roads, water, sewer, gas, electricity, or recreational facilities in its property report, in its advertising, or in its sales promotions, the developer must obligate itself to do so in the contract, clearly and conditionally (except for acts of God or impossibility of performance).

List of Nine Dishonest Sales Practices:

1. Concealing or misrepresenting facts about current and resale value.
2. Failure to honor refund promises or agreements.
3. Misrepresentation of facts about the subdivision.
4. Failure to develop the subdivision as planned.
5. Failure to deliver deeds, title insurance policies.
6. Abusive treatment and high-pressure sales tactics.
7. Failure to make good on sales inducements.
8. "Bait and switch" tactics.
9. Failure to grant rights under the Interstate Land Sales Full Disclosure Act.

Where to Complain:

If you believe you have been cheated in a transaction covered by the Interstate Land Sales Full Disclosure Act, write to HUD, Interstate Land Sales Division, 451 Seventh St. S.W., Washington, D.C. 20410. Set forth specific details of your complaint and include the name of the developer, name and location of the subdivision, and copies of the contract or any other documents you signed. It is important to act quickly because there are specific time limits for exercising your legal rights.