Source: https://lawandequity.com/2009/05/03/hello-world/?shared=email&msg=fail
Timestamp: 2019-04-19 17:05:26+00:00

Document:
PLEASE NOTE: The opinion cited below was withdrawn by Jankus v. Edge Investors, L.P., — F.Supp.2d —-, 2009 WL 2849064 (S.D.Fla. Aug 31, 2009) (NO. 08-80200-CIV); However, the reasoning of this opinion was adopted by Plaza Court, L.P. v. Baker-Chaput, 2009 WL 1809921, *5+, 34 Fla. L. Weekly D1305, D1305+ (Fla.App. 5 Dist. Jun 26, 2009). The effect of the Plaza Court adoption is discussed at http://tinyurl.com/lxj2t8. The Eleventh Circuit states that the forum state is the ultimate arbiter of the two year promise exemption. The Jankus opinion was withdrawn based upon the two year promise exemption. This occurred after the State of Florida expressly found that the provision involved in Jankus, and others like it, was not exempt from ILSA.
Several years ago the Florida Fourth District Court of Appeal issued the opinion in Engle Homes, Inc. v. Krasna,766 So.2d 311 (Fla. 4th DCA 2000). The Krasna court dealt with a developer’s violation of 15 USC section 1703(b), by failing to place a seven day right of rescission in the purchase contract. Recently, in Jankus v. Edge Investors, L.P., 2009 U.S. Dist. LEXIS 29110 (S.D. Fla. Apr. 8, 2009), the Federal Court for the Southern District of Florida has applied a Krasna style reasoning to Section 1703(c) of ILSA. In order to understand the Jankus case, one must look to the history of cases that develop the treatment of rescission under 15 U.S.C. Section 1703(c).
ILSA provides:– 15 U.S.C. section 1703(b): “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.” (emphasis added).
– 15 U.S.C. section 1703(c): “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.” (emphasis added).
The inherent problem with the Taylor decision arises under the plain reading of 15 U.S.C. Section 1711, or the statute of limitations section of ILSA. Section 1711 provides a three-year statute of limitations — either running from the date the contract was signed, or from the date the discovery of the ILSA violation was made, depending on which right under ILSA is being asserted. See 15 U.S.C. section 1711. The two year rescission period does not appear in Section 1711, and as such it is something other than a statute of limitations. The Jankus court found that the two-year period for the buyer to give notice was a condition precedent to filing, not a statute of limitations. As such, the developer can waive the two-year notice period, when they fail to give the appropriate notice in the contract as required by Section 1703(c). Jankus also noted the inadequacy of the damage remedy that the Taylor court espoused.
“Moreover, that the plaintiff may have a theoretical action for damages under §1709(b) is not a meaningful alternative where he or she is still bound to perform under the contract of purchase. Without the legislatively prescribed rescission remedy under § 1703(c), he or she is left with the difficult task of proving the materiality of the property report disclosure violation and causally related damages under § 1709(b). The corresponding diminished litigation exposure attendant to this revision of the statutory scheme would give developers little incentive to comply with the disclosure requirements mandated under the ILSA. This court is not willing to interfere with the ILSA statutory scheme in this fashion by effectively writing the rescission disclosure requirement out of the statute, essentially what the Holiday Isle court achieved by enforcing §1703(c)’s two year rescission period against a buyer who did not receive the statutorily prescribed notice of it.” Jankus 2009 U.S. Dist. LEXIS 29110 at *19-20.
Just as Krasna ensured that the seven day notice rights under Section 1703(b) are protected: Jankus ensures that developers must comply with 1703(c) or face rescission within three years.
I wish to throw in a UK perspective to the whole mortgage mis selling debate. Recently it was announced that the Financial Services Authority had set aside a compensation pot which will compensate victims of mortgage mis selling.
1) Why should the Government bail these people out when they have learnt the hard way.
2) Forgive my ignorance but how closely does this match what is currently happening in the US?
Thank you for your comment but I really think that the situation in the UK, especially at the time of your post, is nothing like that in the US. The President has deployed a different set of tactics to the British Govt.
If the Govt didn’t bail the banks out then we would have been left with many innocent people in a dreadful position of having literally no money through no fault of their own.
In answer to the above the the Financial Services Authority set aside a pot of money via the financial services compensation scheme for customers who were financially worse off following advice from a regualted entity.
However it is not as simple as it sounds. The customer must be able to demonstate they are worse off and the company who gave the advice must be in default.
The FSA has admited that it has failed with the regulation of the mortgage market and ordered a report know as the Mortgage Market Review (MMR), which is in fact more of the same regualtion that failed.
Mis sold mortgage claims are going to feature as part of our economic landscape for many years to come.
It is not just the mortgage companies that are to blame, but mortgage lenders, solicitors and in some cases the surveyors of the property.
I am aware that valuations of property are a big problem in the US and UK, with many figures being inaccurate.

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