BrokerageIndustry News

Cracking down on bailing buyers

From The Real Deal
Published on Sep 2, 2009

Editor's note: Republished with permission from TheRealDeal.com. Click here to view original article. By MICHAEL RUDNICK In this weak real estate market, new condo developers possess relatively little in their arsenals to arm themselves against the onslaught of purchasers seeking to back out of contracts. But there are a few measures developers can take to protect themselves without scaring off potentially legitimate buyers. Some developers, for instance, are using new clauses designed to prohibit buyers from litigating their way out of deals. Real estate attorney Adam Leitman Bailey pointed to clauses in which the buyer agrees to refrain from citing ILSA, the United States Department of Housing and Urban Development's Interstate Land Sales Full Disclosure Act, as an excuse to break a contract. Bailey claimed that such a clause is not enforceable. Under ILSA, a 41-year-old consumer protection law, condo developers with more than 99 units are required to file a project repor...

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