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 reportThe following summary of the Settlement Agreement between the United States Department of Housing and Urban Development and Waters Edge One, L.L.C. outlines the financial penalties for violating the Interstate Land Sales Full Disclosure Act. The complete document is posted on the HUD website.
Waters Edge One, L. L. C. began selling units in its Clearwater, Florida high-rise mixed use condominium building in January 2006. In 2007 the developer had entered into sales contracts to sell 109 units in its Waters Edge building.
During its investigation HUD found that the Waters Edge One, L. L. C., sales did not qualify for an exemption under the Act. The Department also determined that the developer had failed to file a Statement of Record and had neglected to provide purchasers with a Property Report.
As a result of these violations, the developer agreed to offer all purchasers the option of canceling their contracts and either signing a new contract at a lower price, or receiving a refund of any earnest monies paid for deposits and units’ upgrades.
The developer paid $10,000 to the United States Treasury.