The U.S. Consumer Financial Protection Bureau recently announced an administrative enforcement action against a property developer in Tennessee for violating the Interstate Land Sales Full Disclosure Act and its implementing regulations. According to the consent order, the developer violated ILSA by making misrepresentations to consumers regarding the maintenance of roads in a subdivision. Prior to the advent of the CFPB, this obscure consumer protection statute was subject to the jurisdiction of the U.S. Department of Housing and Urban Development and it was largely overlooked. Although it is uncertain whether the CFPB will pursue vigorous enforcement of ILSA going forward, this new action by the CFPB demonstrates that ILSA compliance and representations to consumers in ILSA property reports must be taken seriously. Those subject to ILSA should therefore be wary.
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