Nature of Violation



|Nature of Violation |Civil Remedies / Penalties |Statute of Limitations |

|Violation of §1703(a)(1) - Use of any means of interstate commerce or the mails in |Purchaser or lessee[1] may bring civil action at law (for damages)|3 years from the date the purchaser or |

|connection with the: |or in equity (for injunction, specific performance or other |lessee signs the contract [15 U.S.C.S. |

| |equitable relief) against developer [2]or developer's agent; court|§1711(a)(1)] |

|(A) Sale or lease of a non-exempt lot without an effective statement of record, |may take into account amount paid for lot, cost of improvements | |

|(B) Sale or lease of a non-exempt lot without delivering a Property Report to the |made to lot, fair market value of lot at time purchased and at | |

|purchaser or lessee prior to their execution of the contract, |time relief is sought; may recover interest, court costs, | |

|(C) Sale or lease of a non-exempt lot in reliance on a statement of record that either|reasonable attorney's fees, independent appraiser's fees, and | |

|contains an untrue statement of material fact or omits to state a material fact that |travel to and from lot [15 U.S.C.S. §1709(a), (c)] | |

|the Act or regulations require to be included, or | | |

|(D) Display or delivery to prospective purchasers or lessees of advertising or | | |

|promotional material that is inconsistent with the information required to be provided| | |

|in the property report | | |

|Violation of §1703(a)(2)(A), (B), (C) - Use of any means of interstate commerce or the|Same as above |3 years after the purchaser or lessee |

|mails in manner which violates anti-fraud provisions of Act in connection with the | |discovers the violation or should have |

|sale or lease of any lot not exempt under 15 U.S.C.S. §1702(a) (i.e., improved lot | |discovered the violation in the exercise |

|exemption, builder exemption, business/industrial park exemption) | |of reasonable diligence [15 U.S.C.S. |

| | |§1711(a)(2)] |

|Violation of §1703(a)(2)(D) - representation that roads, utilities, or amenities will |Same as above |3 years from the date the purchaser or |

|be provided by the developer without a contractual obligation in the contract of sale | |lessee signs the contract [15 U.S.C.S. |

|or lease to provide them | |§1711(a)(1)] |

|Violation of §1703(b), (c), (d), or (e) - refusal to honor purchaser's or lessee's |Purchaser may bring civil action at law (for damages) or in equity|3 years from the date the purchaser or |

|right of rescission or failure to make required refund |(for injunction, specific performance or other equitable relief) |lessee signs the contract, |

| |against seller or lessor or any successor thereto to enforce |notwithstanding delivery of a deed to the|

| |rights; recovery may include interest, court costs, reasonable |purchaser [15 U.S.C.S. §1711(b)] |

| |attorney's fees, independent appraiser's fees, and travel to and | |

| |from lot [15 U.S.C.S. §1509(b),(c) | |

|Failure to deliver a Property Report as required by the Act and regulations prior to |Purchaser or lessee may revoke contract at its option at any time |2 years from the date the purchaser or |

|the purchaser or lessee signing a contract for the purchase or lease of a non-exempt |within two years after the date the purchaser or lessee signed the|lessee signed the contract |

|lot |contract [15 USCS §1703(c)]. If purchaser or lessee delivers to | |

| |the seller an instrument conveying his or her rights and interest | |

| |in the lot and those rights and interests are substantially | |

| |similar to those which the seller originally conveyed or purported| |

| |to convey, the purchaser or lessee is entitled to a refund of all | |

| |money paid by him under the contract. [15 U.S.C.S. §1703(e)] | |

|Failure of contract to include specific provisions required by 15 U.S.C.S. §1703(d) |Purchaser or lessee may revoke the contract at any time within two|2 years from the date the purchaser or |

|unless the purchaser receives a warranty or limited warranty deed within 180 days |years after the date the purchaser or lessee signed the contract |lessee signed the contract |

|after signing contract |[15 U.S.C.S. §1703(d)] If purchaser or lessee delivers to the | |

| |seller an instrument conveying his or her rights and interest in | |

| |the lot and those rights and interests are substantially similar | |

| |to those which the seller originally conveyed or purported to | |

| |convey, the purchaser or lessee is entitled to a refund of all | |

| |money paid by him under the contract. [15 U.S.C.S. §1703(e)] | |

|Willful violation of any provision of Act or regulations |Attorney General may institute criminal proceedings; upon |No time limit stated in statute or |

| |conviction, shall be fined not more than $10,000 or imprisoned for|regulations |

| |not more than 5 years, or both [15 U.S.C.S. §1717] | |

|Knowing[3] and material violation of any provision of Act or regulations, or any order|Secretary of HUD may bring an action in any district court to |No time limit stated in statute or |

|issued by HUD |enjoin violations [15 U.S.C.S. §1714(a)] |regulations |

| | | |

| |Secretary of HUD may also impose fines, after an administrative | |

| |hearing, in an amount not to exceed $1,000 per violation[4], | |

| |except that maximum penalty for all violations by one person in | |

| |any 1-year period shall not exceed $1 million; fines may be | |

| |imposed in addition to any other sanctions that Secretary may | |

| |order [15 U.S.C.S. §1717a] | |

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[1] Rights accrue to an actual or prospective purchaser or lessee

[2] Developer means any person who, directly or indirectly, sells or leases, or advertises or offers to sell or lease, any lot in a subdivision

[3] Knowing means having actual knowledge or, or acting with deliberate ignorance of or reckless disregard for the prohibitions under the Act and regulations.

[4] Each sale or lease or offer to sell or lease constitutes a separate violation; in case of a continuing violation, each day constitutes a separate violation.

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