West Virginia Mountain Developers and the 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 sales 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). Developers offering 25-99 lots as part of a common promotional plan are not required to register but are subject to the anti-fraud provisions. Violations of the Act may result in criminal and civil penalties and the buyer's right of rescission.

The law also stipulates that each purchaser receive a pre-sale Property Report detailing all material facts about the land offered for sale. The sale of condominiums is covered under this Act. The Property Report is intended to be a revealing document. It is uniform in design and requires full disclosure of known potential land risks.

Fact: West Virginia Mountain Land is Hazardous.

On June 3, 2008, as a result of severe storms, tornadoes, mudslides, landslides and flooding, the federal government declared Barbour, Clay, Doddridge, Gilmer, Harrison, Jackson, Jefferson, Marion, Taylor, Tucker, Tyler and Wetzel counties presidential disaster areas.

The following West Virginia hazard information was taken from Community Alert online:

Because of the mountainous nature of West Virginia, landslides are a common hazard. A Geological and Economic Survey study estimated that there are nearly 500,000 landslides each year in the state, and damage estimates are about $30 million annually (Lessing, 1996). West Virginia accounts for 13 percent of U.S. landslide damage and is ranked one of the top two states in highest landslide damage per capita values at $100-$300/person/year (Kite, 2003).

According to the United States Geologic Survey, practically all of West Virginia resides in a zone of high incidence of landslides. As such, landslides pose a significant threat to the lives and property of West Virginia's residents.

West Virginia mountain developers who are subject to the Act should disclose the following material information under the Land Characteristics and Climate/Hazard Section of their property reports:

1. The land in this subdivision is naturally hazardous. Geologists and soil experts have determined that the lots in this subdivision are at risk of slope failure. Homeowner policies will not cover this damage.

2. This project was approved without landslide hazard mapping and under regulations that did not require site specific stability studies. Please contact the West Virginia Geological Survey for information.

Another section of the report defines financial responsibilities for the Property Owner's Association. If applicable, the following should be discussed:

Roads in this subdivision are private and will be maintained by the Property Owner's Association after the developer's obligations are satisfied. Subdivision roads are presently stable but are subject to erosion and slope failure. All future road costs will be shared by members of the association.

It is unknown whether West Virginia mountain developers are in compliance with the Interstate Land Sales Full Disclosure Act. Occasionally developers neglect to file a statement of record with HUD and also fail to supply purchasers with a Property Report. For an example of a recent HUD Settlement Agreement please see U.S. Department of Housing and Urban Development and Waters Edge One, L. L. C.

The U.S. Department of Housing and Urban Development Web-site provides a list of West Virginia land developers who have registered with the agency.