Seven Months After Stein – Can Condominium Developers Worried About ILSA Claims Finally Breathe a Sigh of Relief?
The Interstate Land Sales Full Disclosure Act (ILSA) is not a talisman that transforms a condominium purchaser's "buyer's remorse" into a legally cognizable defense to a breach of contract claim, or so went the clear implication of the Eleventh Circuit's unanimous opinion, Stein v. Paradigm Mirasol, LLC, decided late in 2009. The ruling was certainly welcome news to residential condominium developers because of its potential to dampen the recent proliferation of lawsuits from unhappy purchasers seeking to reverse or escape deals that have proven to be bad financial investments.
Despite the favorable ruling, many condominium developers have undoubtedly been reluctant to declare final victory against ILSA rescission lawsuits. Before Stein, most courts had adopted a rule of construction construing ILSA strictly against condominium sellers in favor of purchasers. Many of these courts appeared to go to great lengths to rationalize new reasons to allow purchasers to rescind their contracts or undo their already completed purchases. This article examines Stein and its recent progeny to determine whether the decision can properly be interpreted as replacing this rule of construction with a more balanced one interpreting the seller's two-year completion obligation in light of the anti-fraud purposes of the statute. To read the full article, please click on the link below.
The article was first published in the RPLS State Bar of Georgia Summer 2010 Newsletter.