Comments on: Plaza Court, L.P., v. Baker-Chaput and O’Brien: Florida Adopts the Jankus Rationale on the Interstate Land Sales Act http://lawandequity.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/ Mon, 12 Jul 2010 20:24:58 +0000 hourly 1 http://wordpress.com/ By: Ann Evanston http://lawandequity.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-17 Ann Evanston Thu, 09 Jul 2009 18:05:39 +0000 http://timothypowersoneill.wordpress.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-17 I appreciate that you are making this information available through a blog! I appreciate that you are making this information available through a blog!

]]> By: Navigating The ILSA Minefield: How Have Courts Applied The Interstate Land Sales Full Disclosure Act In An Era Of Economic Crisis? « Jared Beck’s Real Estate Market Crisis Law Report http://lawandequity.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-16 Navigating The ILSA Minefield: How Have Courts Applied The Interstate Land Sales Full Disclosure Act In An Era Of Economic Crisis? « Jared Beck’s Real Estate Market Crisis Law Report Mon, 06 Jul 2009 08:21:09 +0000 http://timothypowersoneill.wordpress.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-16 [...] While ILSA is a federal statute, it specifically allows the plaintiff a choice of forum between federal and state court.  This means that state courts are also in the business of interpreting and applying the statute, and Florida state courts have certainly seen their fair share of ILSA cases along with their federal brethren.   The two most important recent Florida state appellate decisions, both from 2009, are Mailloux v. Briella Townhomes, LLC, 3 So. 3d 394 (Fla. 4th DCA 2009) and Plaza Court, L.P. v. Baker-Chaput, __ So. 3d __, 2009 WL 1809921 (Fla. 5th DCA 2009).  Taken together, these two decisions apply a strict “impossibility of performance” standard to the improved lot exemption, one that is unfavorable to developers and protective of buyers.  The Plaza Court opinion even went out of its way to distinguish part of its ILSA analysis from the conclusions reached several weeks earlier by an Alabama federal court, chiding the Alabama court for “hold[ing] the developer harmless” for violations of the statute.  My friend Tim O’Neill has a detailed look at the Plaza Court case on his blog. [...] [...] While ILSA is a federal statute, it specifically allows the plaintiff a choice of forum between federal and state court.  This means that state courts are also in the business of interpreting and applying the statute, and Florida state courts have certainly seen their fair share of ILSA cases along with their federal brethren.   The two most important recent Florida state appellate decisions, both from 2009, are Mailloux v. Briella Townhomes, LLC, 3 So. 3d 394 (Fla. 4th DCA 2009) and Plaza Court, L.P. v. Baker-Chaput, __ So. 3d __, 2009 WL 1809921 (Fla. 5th DCA 2009).  Taken together, these two decisions apply a strict “impossibility of performance” standard to the improved lot exemption, one that is unfavorable to developers and protective of buyers.  The Plaza Court opinion even went out of its way to distinguish part of its ILSA analysis from the conclusions reached several weeks earlier by an Alabama federal court, chiding the Alabama court for “hold[ing] the developer harmless” for violations of the statute.  My friend Tim O’Neill has a detailed look at the Plaza Court case on his blog. [...]

]]> By: Marc http://lawandequity.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-11 Marc Wed, 01 Jul 2009 20:57:37 +0000 http://timothypowersoneill.wordpress.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-11 Timothy, Actually, my scenario is the opposite. The developer has never registered with HUD or given a property report and its original contract was nowhere near compliant with ILSA, in my humble opinion. They replaced some (but not all) of their buyers' contracts with another one that they believe qualifies for the two year exemption. It's not perfectly clear how they think they're exempt under the original contracts that were not replaced especially now that the two year window has been pretty strongly opened for an additional year. Perhaps they think they can stack exemptions and exempt the original contracts under the 99 lot exemption. Or perhaps they think they're a sovereign state and compliance with the Act is discretionary! For anyone reading this posting or my posting above, it is not intended as and you should not rely on it as legal advice. If you have any questions about your rights and obligations under a contract to purchase a condominium (or any other type of property) you should consult your own independent legal counsel. Timothy,

Actually, my scenario is the opposite. The developer has never registered with HUD or given a property report and its original contract was nowhere near compliant with ILSA, in my humble opinion. They replaced some (but not all) of their buyers’ contracts with another one that they believe qualifies for the two year exemption. It’s not perfectly clear how they think they’re exempt under the original contracts that were not replaced especially now that the two year window has been pretty strongly opened for an additional year. Perhaps they think they can stack exemptions and exempt the original contracts under the 99 lot exemption. Or perhaps they think they’re a sovereign state and compliance with the Act is discretionary!

For anyone reading this posting or my posting above, it is not intended as and you should not rely on it as legal advice. If you have any questions about your rights and obligations under a contract to purchase a condominium (or any other type of property) you should consult your own independent legal counsel.

]]> By: Timothy Powers O'Neill http://lawandequity.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-10 Timothy Powers O'Neill Wed, 01 Jul 2009 13:24:48 +0000 http://timothypowersoneill.wordpress.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-10 Thanks for the kind words Marc. Quite the converstions you have in the comments of your blog! You mentioned a "two contract" or replacement contract problem, so I thought I would offer the following. If you are dealing with a two contract case where one exempt contract is replaced by an ILSA contract, pay attention to the timing of the HUD registration and the date an "offer" was sent to your client. It is a violation of Section 1703(a) to make such a sale (usually the second contract) within thirty days of filing with HUD. You may be able to use this in addition to "purpose of evasion" argument. 15 U.S.C. 1703 provides: (a) Prohibited activities. It shall be unlawful for any developer or agent, directly or indirectly, to make use of any means or instruments of transportation or communication in interstate commerce, or of the mails-- (1) with respect to the sale or lease of any lot not exempt under section 1403 [15 USCS § 1702]-- (A) to sell or lease any lot unless a statement of record with respect to such lot is in effect in accordance with section 1407 [15 USCS § 1706]; Section 1706 provides: § 1706. Effective date of statements of record and amendments thereto (a) Thirtieth day after filing or such earlier date as determined by Secretary; consolidation of subsequent statement with earlier recording. Except as hereinafter provided, the effective date of a statement of record, or any amendment thereto, shall be the thirtieth day after the filing thereof or such earlier date as the Secretary may determine, having due regard to the public interest and the protection of purchasers. Thanks for the kind words Marc. Quite the converstions you have in the comments of your blog! You mentioned a “two contract” or replacement contract problem, so I thought I would offer the following.

If you are dealing with a two contract case where one exempt contract is replaced by an ILSA contract, pay attention to the timing of the HUD registration and the date an “offer” was sent to your client. It is a violation of Section 1703(a) to make such a sale (usually the second contract) within thirty days of filing with HUD. You may be able to use this in addition to “purpose of evasion” argument.

15 U.S.C. 1703 provides:

(a) Prohibited activities. It shall be unlawful for any developer or agent, directly or indirectly, to make use of any means or instruments of transportation or communication in interstate commerce, or of the mails–
(1) with respect to the sale or lease of any lot not exempt under section 1403 [15 USCS § 1702]–
(A) to sell or lease any lot unless a statement of record with respect to such lot is in effect in accordance with section 1407 [15 USCS § 1706];

Section 1706 provides:

§ 1706. Effective date of statements of record and amendments thereto

(a) Thirtieth day after filing or such earlier date as determined by Secretary; consolidation of subsequent statement with earlier recording. Except as hereinafter provided, the effective date of a statement of record, or any amendment thereto, shall be the thirtieth day after the filing thereof or such earlier date as the Secretary may determine, having due regard to the public interest and the protection of purchasers.

]]> By: Timothy Powers O'Neill http://lawandequity.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-9 Timothy Powers O'Neill Tue, 30 Jun 2009 11:02:47 +0000 http://timothypowersoneill.wordpress.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-9 Thanks Jared: One interesting point that remains to be resolved is how much impact the Plaza Court case will have on the right to rescind for three years. How much of that principle is based in contract law? At least we might finally be able to escape the "all contract defenses" language that was taken out of context from the HUD guidelines. Thanks Jared:

One interesting point that remains to be resolved is how much impact the Plaza Court case will have on the right to rescind for three years. How much of that principle is based in contract law? At least we might finally be able to escape the “all contract defenses” language that was taken out of context from the HUD guidelines.

]]> By: Marc http://lawandequity.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-8 Marc Tue, 30 Jun 2009 05:58:13 +0000 http://timothypowersoneill.wordpress.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-8 Timothy, Great post on a great case. I'm in Seattle and ILSA is only recently coming into play around here. My partner and I are, to my knowledge, the first attorney's to raise an ILSA claim in Washington and, better still, the first to win it. I'm looking forward to citing to Plaza and Jankus in my next case which involves a force majeure clause straight out of the Paradigm Mirasol playbook plus a second contract evasion scenario a la Gentry v. Harborage. I'll be borrowing some of your citations for the proposition that Florida federal courts are bound by the Plaza opinion for persuasive counter-authority to the "all contracts defense" approach that my opponent will undoubtedly raise. Great stuff. Keep up the good work. Timothy,
Great post on a great case. I’m in Seattle and ILSA is only recently coming into play around here. My partner and I are, to my knowledge, the first attorney’s to raise an ILSA claim in Washington and, better still, the first to win it. I’m looking forward to citing to Plaza and Jankus in my next case which involves a force majeure clause straight out of the Paradigm Mirasol playbook plus a second contract evasion scenario a la Gentry v. Harborage. I’ll be borrowing some of your citations for the proposition that Florida federal courts are bound by the Plaza opinion for persuasive counter-authority to the “all contracts defense” approach that my opponent will undoubtedly raise.

Great stuff. Keep up the good work.

]]> By: Jared Beck http://lawandequity.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-7 Jared Beck Tue, 30 Jun 2009 04:33:15 +0000 http://timothypowersoneill.wordpress.com/2009/06/30/plaza-court-l-p-v-baker-chaput-and-obrien-florida-adopts-the-jankus-rationale-on-the-interstate-land-sales-act/#comment-7 Tim, your analysis of Plaza Court hits the nail on the head. From a historical perspective, it interests me that Florida appellate courts have generally been the ones favoring a strict construction of ILSA. Jared Beck, Esq. http://beckandlee.wordpress.com Tim, your analysis of Plaza Court hits the nail on the head. From a historical perspective, it interests me that Florida appellate courts have generally been the ones favoring a strict construction of ILSA.

Jared Beck, Esq.
http://beckandlee.wordpress.com

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