Murray decision explains ILSFDA damages claims

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Murray v Holiday Isle, LLC, 2009 U.S. Dist. LEXIS 24051 (S.D. Ala. Mar. 24, 2009)


Plaintiffs bought preconstruction units in a large condominium project on the Alabama coast and later sued to recover their deposits. The primary issue was whether the transaction fell within ILSFDA and whether plaintiffs had been damaged by the defendant’s failure to include the right to rescind in the purchase agreement. The court found that the defendant had essentially conceded the project was subject to the ILSFDA, and the purchase agreement had not provided the required right to rescind. The court had ruled in an earlier proceeding that the plaintiffs were not entitled to rescission because they failed to exercise their right by notifying the seller within two years after signing their sales contract. However, the court determined that the developer’s failure to provide the buyer with a notice of right to rescind is actionable and subject to a damages claim, denying the developer’s contention that any damages must be caused by the failure to receive a property report (the disclosure document ILSFDA requires developers to give to purchaser prior to sale). Consequently, the court held that the developer’s failure to properly disclose the right to rescind had caused the plaintiffs not to exercise its rights in a timely manner and, the amount of any damages was a triable issue of material fact. The defendant’s motion for summary judgment was denied.


This article does not constitute legal advice or the formation of an attorney-client relationship, and is not for re-publication without express permission of the Carmel & Carmel P.C.


The citation for the Murray decision is:

Murray v Holiday Isle, LLC, 2009 U.S. Dist. LEXIS 24051 (S.D. Ala. Mar. 24, 2009)

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2009-03-30 10:31:00