CFPB Orders Real Estate Development Firm to Fix Potholes

If anyone doubts the expansive reach of the CFPB, look no further than the Consent Order which was entered Friday against International Land Consultants, Inc. and certain individuals.  Pursuant to the Consent Order, the respondents have been ordered to make repairs to the roads in a Tennessee real estate development known as Hawks Bluff.   The Consent Order resolves allegations that the Florida development company and individuals violated the Interstate Land Sales Full Disclosure Act (the “ILSFDA”) by making material misrepresentations that all roads were completed, built t county standards and would be maintained by the seller until they were dedicated and accepted by the county.  The CFPB contended that the county had issued a corrective action plan that the respondents had failed to comply with.    Under the ILSFDA, it is unlawful for any developer or agent to sell or lease any lot where any part of the statement of record or the property report contains an untrue statement of a material fact or omits a material fact required by the ILSFDA.  15 U.S.C. §1703(a)(1)(C). It is also unlawful for a developer or agent 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.  15 U.S.C. §1703(a)(2)(B).  Under the Consent Order, the respondents are required to repair the roads to the CFPB's satisfaction and consistent with any engineering report to be prepared by an independent consultant.  The Consent Order is effective for five (5) years.