Summer 2009 Update

LEGAL ALERTS First Global decision holds piggybacking of ILSA exemptions must be done properly Rensin v. Juno-Loudon, LLC - ILSA case rejecting Bodansky decision Bodansky v. Fifth on the Park Condo, LLC - New York ILSA Decision Stein decision rules on adequacy of language dealing with Improved Lot Exemption Jankus Part II - Rules against Plaintiff, however prior holding regarding 3-year statute of limitations not discussed more legal alerts »

“You just need to offer less than 100 lots at a time. Then you are exempt.” Heard that before? Done that before? We have heard this time and time again, first by developers when we review their initial documents and we tell them they could be at risk, and now by developers trying to defend themselves against a complaint filed by an unhappy consumer who wants their money back.

The HUD regulations are clear about what constitutes a “common promotional plan”, a “subdivision’ and how identify the number of lots in a subdivision. If your master plan calls for more than 100 lots or units, the fact you are only “offering” some for sale at a given time most likely does not qualify the sale of the lots for this exemption. Did you know that the land does not even need to be contiguous to be considered part of a “common promotional plan?” Did you know that if you sell parking spaces and deed them separately they could be counted as part of the subdivision?

These are complicated questions in a complicated time. There are more and more complaints filed with HUD and the courts by people who signed contracts one or two years ago who now want their money back. A business decision to take the risk before may not be a good idea now. Developers who thought they were “sold out” in 2007 are finding themselves defending themselves and desperately trying to hold on to these sales in 2009.

Now is the time for good advice from a team of lawyers that specializes in this area of the law. Utilizing an in-depth knowledge of the real estate industry, our attorneys make sure that clients are protected and prepared from the beginning of the due diligence process until ground-breaking, then through ribbon-cutting and beyond. We take care of the legal needs of our clients to ensure they are steered away from problems and guided toward success.

If you would like for us to review your community and your potential exposure, please contact us. We will only charge you if we are retained but we can provide you with an initial consultation at no charge.

Carmel & Carmel attorneys can be reached at info@carmel.us or 202-787-1322.

2009-03-01