Bureau eases up on late filings by land developers – but reports must still be made ‘within a reasonable time’

Land developers who are tardy in filing annual reports of activity or certain financial statements won’t face supervisory or enforcement action – provided that the firms are making “good faith efforts to file the reports within a reasonable time,” the federal consumer financial protection agency said Monday.

In a statement, the Consumer Financial Protection Bureau (CFPB) said that it recognizes the “serious impact” the coronavirus crisis is having consumers and such entities as land developers subject to the Interstate Land Sales Full Disclosure Act (ILSA) and Regulation J. Under those rules, the agency said, certain land developers must register their subdivisions with the bureau and provide “prescribed disclosures to prospective lot purchasers.” As part of their ongoing requirements, each year they must submit annual reports of activity and financial statements.

The statement issued Monday said that, until further notice, the CFPB would not take action against developers for delayed filing of:

  • Annual reports of activity (which, the bureau pointed out, Regulation J requires within 30 days of the annual anniversary of the effective date of a developer’s initial statement of record) provided that “developers are making good faith efforts to file these reports within a reasonable time.”
  • Financial statements with the bureau (which, the bureau said, Reg J requires within 120 days of the close of a developer’s fiscal year) provided that developers are making good-faith efforts to file these reports within a reasonable time

“The flexibility provided in this statement does not apply to other requirements of ILSA or Regulation J,” CFPB said. “Developers must still timely submit all other required filings with the Bureau and provide property reports to prospective purchasers prior to a purchaser’s signing of an agreement for sale or lease.”

Still, the bureau said that “where appropriate,” it “will take action against developers” that fail to, in a timely manner, submit filings and provide property reports to prospective purchasers (before a buyer signs a sale or lease agreement).

“Previous years’ financial statement filings will remain available to prospective purchasers upon request,” the bureau said.

Statement on Supervisory and Enforcement Practices Regarding Certain Filing Requirements Under the Interstate Land Sales Full Disclosure Act and Regulation J

 

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