Two recent legal cases involving the Interstate Land Sales Full Disclosure Act are helpful case studies for people engaged in Bronx foreclosure investing.
In both cases, the plaintiffs used the ILSA to get back their deposits on housing units they agreed to buy.
The case that was resolved in January was a record ruling because it was the first time over a 20-year period in New York that a federal judge handed down a ruling on a case involving ILSA. This Manhattan judge ruled against the two buyers of units in the Harlem housing project called 5th on the Park and sided with the developer, Uptown Partners.
In the second case that was recently resolved, a Brooklyn federal judge sided again with the developer. In this case, a group of eight buyers used the ILSA to get back the deposits they made on units of the Long Island condominium project One Hunters Point, which was built by Simone Development and marketed by Borden East River Realty. The buyers paid $563,285 in total deposits.
According to Bruce Lederman, partner with the law firm that represented Borden, the decisions in the two cases could discourage the filing of similar claims in New York.
Many developers, sellers and buyers have been eagerly waiting for the decisions on the cases as dozens of similar cases are pending in the city of New York. People engaged in Bronx foreclosure investing also have an interest in the cases as they involve purchases of real estate.
The Brooklyn federal judge ruled that the Long Island condo project was not covered by ILSA because there were only 98 units for residential use. ILSA specified 100 land parcels or more. The complainants included roof terrace units and parking lot spaces to arrive at a count of 110 units.
The complainants in both cases, however, said they will appeal the decisions. Lawrence Weiner, who represented the Long Island plaintiffs, said that the Brooklyn judge seemed to have just adopted the rationale of the Manhattan judge.
Meanwhile, in another report about the Bronx real estate market, it was stated that the number of pre-foreclosures in Bronx and residential units that entered Bronx foreclosure listings in February reached 173, which was a 7-percent drop from February last year and a 20-percent decline from the previous month.
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