15 U.S.C. § 1703 — Requirements respecting sale or lease of

Page 1671 TITLE 15—COMMERCE AND TRADE § 1703 Editorial Notes REFERENCES IN TEXT The effective date of this subsection, referred to in subsec. (b)(2), probably means the effective date of title IV of Pub. L. 96–153, section 402 of which amended sub- sec. (b) of this section generally. For the effective date of title IV, see section 410 of Pub. L. 96–153, set out as an Effective Date of 1979 Amendment note under sec- tion 1701 of this title. AMENDMENTS 2014—Subsec. (b)(9). Pub. L. 113–167, § 1(a)(1), added par. (9). Subsec. (d). Pub. L. 113–167, § 1(a)(2), added subsec. (d). 2010—Subsecs. (b)(2), (8)(B), (G), (c). Pub. L. 111–203 substituted ‘‘Director’’ for ‘‘Secretary’’. 1979—Subsec. (a). Pub. L. 96–153 revised existing pro- visions formerly set out as pars. (1) to (11) into pars. (1) to (8) and, as so revised, substituted provisions relating to sale or lease of lots in a subdivision containing less than twenty-five lots, etc., for provisions relating to sale or lease of real estate not pursuant to a common promotional plan to offer or sell fifty or more lots in a subdivision, etc. Subsec. (b). Pub. L. 96–153 revised existing provisions formerly set out as pars. (1) to (7) into pars. (1) to (8) and, as so revised, substituted provisions setting forth criteria respecting sale or lease of lots subject to other statutory registration and disclosure requirements, for provisions setting forth criteria respecting sale or lease of lots in municipality or county with minimum stand- ards. 1978—Subsec. (a)(3). Pub. L. 95–557, § 907(a)(1), inserted ‘‘condominium’’ after ‘‘commercial’’. Subsec. (a)(10). Pub. L. 95–557, § 907(a)(2), inserted ‘‘United States land patents or Federal grants and res- ervations similar to United States land patents, nor to’’ after ‘‘do not refer to’’. Subsec. (a)(11). Pub. L. 95–557, § 907(a)(3), inserted ‘‘or which is restricted to such use by a declaration of cov- enants, conditions, and restrictions which has been re- corded in the official records of the city or county in which such real estate is located’’ before ‘‘when’’. Subsecs. (b), (c). Pub. L. 95–557, § 907(b)(1), (2), added subsec. (b) and redesignated former subsec. (b) as (c). 1974—Subsec. (a)(11). Pub. L. 93–383 added par. (11). 1969—Subsec. (a)(10). Pub. L. 91–152 substituted provi- sions requiring a personal on-the-lot inspection of the real estate for provisions requiring a personal inspec- tion of the lot and restricted definition of terms ‘‘liens’’, ‘‘encumbrances’’, and ‘‘adverse claims’’ so as not to include taxes and assessments imposed by a State, a public body having authority to assess and tax property, or a property owners’ association, which, under the applicable law, constitute liens before they are due and payable, and so as not to include beneficial property restrictions enforceable by other lot owners or lessees in the subdivision under the specified condi- tions. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2014 AMENDMENT Pub. L. 113–167, § 2, Sept. 26, 2014, 128 Stat. 1882, pro- vided that: ‘‘The amendments made by this Act [amending this section] shall take effect 180 days after the date of the enactment of this Act [Sept. 26, 2014].’’ EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. EFFECTIVE DATE OF 1979 AMENDMENT Amendment by Pub. L. 96–153 effective on effective date of regulations implementing such amendment, but in no case later than six months following Dec. 21, 1979, except that subsec. (b)(7) shall be effective on Dec. 21, 1979, see section 410 of Pub. L. 96–153, set out as a note under section 1701 of this title. EFFECTIVE DATE Section effective upon the expiration of two hundred and seventy days after Aug. 1, 1968, see section 1423 of Pub. L. 90–448, set out as a note under section 1701 of this title. § 1703. Requirements respecting sale or lease of lots (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 com- munication in interstate commerce, or of the mails— (1) with respect to the sale or lease of any lot not exempt under section 1702 of this title— (A) to sell or lease any lot unless a state- ment of record with respect to such lot is in effect in accordance with section 1706 of this title; (B) to sell or lease any lot unless a printed property report, meeting the requirements of section 1707 of this title, has been fur- nished to the purchaser or lessee in advance of the signing of any contract or agreement by such purchaser or lessee; (C) to sell or lease any lot where any part of the statement of record or the property report contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein pursuant to sections 1704 through 1707 of this title or any regulations thereunder; or (D) to display or deliver to prospective purchasers or lessees advertising and pro- motional material which is inconsistent with information required to be disclosed in the property report; or (2) with respect to the sale or lease, or offer to sell or lease, any lot not exempt under sec- tion 1702(a) of this title— (A) to employ any device, scheme, or arti- fice to defraud; (B) to obtain money or property by means of any untrue statement of a material fact, or any omission to state a material fact nec- essary in order to make the statements made (in light of the circumstances in which they were made and within the context of the overall offer and sale or lease) not mis- leading, with respect to any information pertinent to the lot or subdivision; (C) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon a purchaser; or (D) to represent that roads, sewers, water, gas, or electric service, or recreational amenities will be provided or completed by the developer without stipulating in the con- tract of sale or lease that such services or amenities will be provided or completed. Page 1672 TITLE 15—COMMERCE AND TRADE § 1703 (b) Revocation of nonexempt contract or agree- ment at option of purchaser or lessee; time limit Any contract or agreement for the sale or lease of a lot not exempt under section 1702 of this title may be revoked at the option of the purchaser or lessee until midnight of the sev- enth day following the signing of such contract or agreement or until such later time as may be required pursuant to applicable State laws, and such contract or agreement shall clearly provide this right. (c) Revocation of contract or agreement at op- tion of purchaser or lessee where required property report not supplied In the case of any contract or agreement for the sale or lease of a lot for which a property re- port is required by this chapter and the property report has not been given to the purchaser or lessee in advance of his or her signing such con- tract or agreement, such contract or agreement may be revoked at the option of the purchaser or lessee within two years from the date of such signing, and such contract or agreement shall clearly provide this right. (d) Additional authority for revocation of non- exempt contract or agreement at option of purchaser or lessee; time limit; applicability Any contract or agreement which is for the sale or lease of a lot not exempt under section 1702 of this title and which does not provide— (1) a description of the lot which makes such lot clearly identifiable and which is in a form acceptable for recording by the appropriate public official responsible for maintaining land records in the jurisdiction in which the lot is located; (2) that, in the event of a default or breach of the contract or agreement by the purchaser or lessee, the seller or lessor (or successor thereof) will provide the purchaser or lessee with written notice of such default or breach and of the opportunity, which shall be given such purchaser or lessee, to remedy such de- fault or breach within twenty days after the date of the receipt of such notice; and (3) that, if the purchaser or lessee loses rights and interest in the lot as a result of a default or breach of the contract or agreement which occurs after the purchaser or lessee has paid 15 per centum of the purchase price of the lot, excluding any interest owed under the contract or agreement, the seller or lessor (or successor thereof) shall refund to such pur- chaser or lessee any amount which remains after subtracting (A) 15 per centum of the pur- chase price of the lot, excluding any interest owed under the contract or agreement, or the amount of damages incurred by the seller or lessor (or successor thereof) as a result of such breach, whichever is greater, from (B) the amount paid by the purchaser or lessee with respect to the purchase price of the lot, ex- cluding any interest paid under the contract or agreement, may be revoked at the option of the purchaser or lessee for two years from the date of the sign- ing of such contract or agreement. This sub- section shall not apply to the sale of a lot for which, within one hundred and eighty days after the signing of the sales contract, the purchaser receives a warranty deed (or, where such deed is not commonly used in the jurisdiction where the lot is located, a deed or grant that warrants at least that the grantor has not conveyed the lot to another person and that the lot is free from encumbrances made by the grantor or any other person claiming by, through, or under him or her). (e) Repayment of purchaser or lessee upon rev- ocation of all money paid under contract or agreement to seller or lessor If a contract or agreement is revoked pursuant to subsection (b), (c), or (d), if the purchaser or lessee tenders to the seller or lessor (or suc- cessor thereof) an instrument conveying his or her rights and interests in the lot, and if the rights and interests and the lot are in a condi- tion which is substantially similar to the condi- tion in which they were conveyed or purported to be conveyed to the purchaser or lessee, such purchaser or lessee shall be entitled to all money paid by him or her under such contract or agreement. (Pub. L. 90–448, title XIV, § 1404, Aug. 1, 1968, 82 Stat. 591; Pub. L. 93–383, title VIII, § 812(c)(1), Aug. 22, 1974, 88 Stat. 737; Pub. L. 96–153, title IV, § 403, Dec. 21, 1979, 93 Stat. 1127.) Editorial Notes AMENDMENTS 1979—Subsec. (a). Pub. L. 96–153 substituted provi- sions setting forth criteria in par. (1) with respect to the sale or lease of any lot not exempt under section 1702 of this title, for provisions relating to the sale or lease of any lot in any subdivision with accompanying required statement of record and printed property re- port, and in par. (2) with respect to the sale or lease, or offer to sell or lease, any lot not exempt under section 1702(a) of this title, for provisions relating to the sale or lease, or offer to sell or lease, any lot in a subdivi- sion through the use of specified prohibited activities. Subsec. (b). Pub. L. 96–153 substituted provisions re- lating to revocation of contracts or agreements for the sale or lease of a lot not exempt under section 1702 of this title, for provisions relating to voidability of con- tracts or agreements for the purchase or lease of lots in subdivisions covered by this chapter. Subsecs. (c) to (e). Pub. L. 96–153 added subsecs. (c) to (e). 1974—Subsec. (b). Pub. L. 383 substituted ‘‘until mid- night of the third business day following the con- summation of the transaction’’ for ‘‘within forty-eight hours’’ and struck out provisions relating to exceptions of contracts or agreements stipulating to the non- applicability of the revocation authority to certain purchasers. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1979 AMENDMENT Amendment by Pub. L. 96–153 effective on effective date of regulations implementing such amendment, but in no case later than six months following Dec. 21, 1979, see section 410 of Pub. L. 96–153, set out as a note under section 1701 of this title. EFFECTIVE DATE OF 1974 AMENDMENT Pub. L. 93–383, title VIII, § 812(c)(2), Aug. 22, 1974, 88 Stat. 737, provided that: ‘‘The amendments made by paragraph (1) [amending this section] shall be effective sixty days after the date of the enactment of this Act [Aug. 22, 1974].’’ Page 1673 TITLE 15—COMMERCE AND TRADE § 1705 EFFECTIVE DATE Section effective upon the expiration of two hundred and seventy days after Aug. 1, 1968, see section 1423 of Pub. L. 90–448, set out as a note under section 1701 of this title. § 1704. Registration of subdivisions (a) Filing of statement of record A subdivision may be registered by filing with the Director a statement of record, meeting the requirements of this chapter and such rules and regulations as may be prescribed by the Director in furtherance of the provisions of this chapter. A statement of record shall be deemed effective only as to the lots specified therein. (b) Payment of fees; use by Director At the time of filing a statement of record, or any amendment thereto, the developer shall pay to the Director a fee, not in excess of $1,000, in accordance with a schedule to be fixed by the regulations of the Director, which fees may be used by the Director to cover all or part of the cost of rendering services under this chapter, and such expenses as are paid from such fees shall be considered nonadministrative. (c) Filing deemed to have taken place upon re- ceipt of statement of record accompanied by fee The filing with the Director of a statement of record, or of an amendment thereto, shall be deemed to have taken place upon the receipt thereof, accompanied by payment of the fee re- quired by subsection (b). (d) Availability of information to public The information contained in or filed with any statement of record shall be made available to the public under such regulations as the Direc- tor may prescribe and copies thereof shall be furnished to every applicant at such reasonable charge as the Director may prescribe. (Pub. L. 90–448, title XIV, § 1405, Aug. 1, 1968, 82 Stat. 592; Pub. L. 111–203, title X, § 1098A(1), July 21, 2010, 124 Stat. 2105.) Editorial Notes AMENDMENTS 2010—Pub. L. 111–203 substituted ‘‘Director’’ for ‘‘Sec- retary’’ wherever appearing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. EFFECTIVE DATE Section effective upon the expiration of two hundred and seventy days after Aug. 1, 1968, see section 1423 of Pub. L. 90–448, set out as a note under section 1701 of this title. § 1705. Information required in statement of record The statement of record shall contain the in- formation and be accompanied by the docu- ments specified hereinafter in this section— (1) the name and address of each person hav- ing an interest in the lots in the subdivision to be covered by the statement of record and the extent of such interest; (2) a legal description of, and a statement of the total area included in, the subdivision and a statement of the topography thereof, to- gether with a map showing the division pro- posed and the dimensions of the lots to be cov- ered by the statement of record and their rela- tion to existing streets and roads; (3) a statement of the condition of the title to the land comprising the subdivision, includ- ing all encumbrances and deed restrictions and covenants applicable thereto; (4) a statement of the general terms and con- ditions, including the range of selling prices or rents at which it is proposed to dispose of the lots in the subdivision; (5) a statement of the present condition of access to the subdivision, the existence of any unusual conditions relating to noise or safety which affect the subdivision and are known to the developer, the availability of sewage dis- posal facilities and other public utilities (in- cluding water, electricity, gas, and telephone facilities) in the subdivision, the proximity in miles of the subdivision to nearby municipali- ties, and the nature of any improvements to be installed by the developer and his estimated schedule for completion; (6) in the case of any subdivision or portion thereof against which there exists a blanket encumbrance, a statement of the consequences for an individual purchaser of a failure, by the person or persons bound, to fulfill obligations under the instrument or instruments creating such encumbrance and the steps, if any, taken to protect the purchaser in such eventuality; (7)(A) copy of its articles of incorporation, with all amendments thereto, if the developer is a corporation; (B) copies of all instruments by which the trust is created or declared, if the developer is a trust; (C) copies of its arti- cles of partnership or association and all other papers pertaining to its organization, if the developer is a partnership, unincorporated as- sociation, joint stock company, or any other form of organization; and (D) if the purported holder of legal title is a person other than de- veloper, copies of the above documents for such person; (8) copies of the deed or other instrument es- tablishing title to the subdivision in the devel- oper or other person and copies of any instru- ment creating a lien or encumbrance upon the title of developer or other person or copies of the opinion or opinions of counsel in respect to the title to the subdivision in the developer or other person or copies of the title insurance policy guaranteeing such title; (9) copies of all forms of conveyance to be used in selling or leasing lots to purchasers; (10) copies of instruments creating ease- ments or other restrictions; (11) such certified and uncertified financial statements of the developer as the Director may require; and (12) such other information and such other documents and certifications as the Director may require as being reasonably necessary or appropriate for the protection of purchasers.