§ 1703. — Requirements respecting sale or lease of lots.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC1703]
TITLE 15--COMMERCE AND TRADE
CHAPTER 42--INTERSTATE LAND SALES
Sec. 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
communication 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 statement 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 furnished 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 promotional 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 section 1702(a) of this title--
(A) to employ any device, scheme, or artifice 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 necessary 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
misleading, 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 contract of sale or
lease that such services or amenities will be provided or
completed.
(b) Revocation of nonexempt contract or agreement 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 seventh 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 option 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 report 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 contract 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 nonexempt 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 default 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 purchaser or lessee any amount which
remains after subtracting (A) 15 per centum of the purchase 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, excluding 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 signing of such contract or agreement. This
subsection 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 revocation 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) of this section, if the purchaser or lessee tenders to the
seller or lessor (or successor 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 condition which is substantially similar to the
condition 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, Sec. 1404, Aug. 1, 1968, 82 Stat. 591; Pub.
L. 93-383, title VIII, Sec. 812(c)(1), Aug. 22, 1974, 88 Stat. 737; Pub.
L. 96-153, title IV, Sec. 403, Dec. 21, 1979, 93 Stat. 1127.)
Amendments
1979--Subsec. (a). Pub. L. 96-153 substituted provisions 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 report, 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
subdivision through the use of specified prohibited activities.
Subsec. (b). Pub. L. 96-153 substituted provisions relating 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 contracts 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 midnight of the
third business day following the consummation of the transaction'' for
``within forty-eight hours'' and struck out provisions relating to
exceptions of contracts or agreements stipulating to the
nonapplicability of the revocation authority to certain purchasers.
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
Section 812(c)(2) of Pub. L. 93-383 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].''
Section Referred to in Other Sections
This section is referred to in sections 1702, 1709, 1711 of this
title.
