Bodansky v. Fifth on the Park Condo, LLC
635 F.3d 75
| 2d Cir. | 2011Background
- ILSA regulates disclosure for large subdivisons; 100-lot exemption at issue in two related appeals involving Fifth on the Park and Borden Hunters Point/Hunters View.
- Plaintiffs purchased units before HUD filings or property reports; they claimed ILSA violations and sought rescission of contracts and deposits.
- District courts held the 100-lot exemption applied because nonexempt units sold before a TCO; they ruled no ILSA violation.
- Romero and Bodansky cases involved 132+ and 160-unit projects, with disputed exemption timing.
- HUD issued conflicting advisory opinions on Hunters Point, complicating administrative interpretation but not the central question.
- Court remanded to determine, at contract signing, whether the 100-lot exemption applied to each lot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When is the 100-lot exemption determined? | Bodansky argues at contract signing. | Fifth/Borden argue exemption delays until 100 nonexempt units are sold. | Determined at the time of signing the contract. |
| Does the 100-lot exemption require foreknowledge of future sales? | Exemption should be decided at signing. | Exemption depends on future sales/leases. | No; exemption determined at signing. |
| Should HUD regulations control interpretation under Chevron? | HUD interpretations should guide courts. | Courts should defer to HUD only if ambiguity exists. | Statute is unambiguous; Chevron deference not required. |
Key Cases Cited
- Markowitz v. Northeast Land Co., 906 F.2d 100 (3d Cir.1990) (sale/lease timing under ILSA determined at contract signing)
- Yeomans v. Le Triomphe P'ship, 884 F.2d 847 (5th Cir.1989) (timing and disclosure requirements under ILSA)
- Winter v. Hollingsworth Props., Inc., 777 F.2d 1444 (11th Cir.1985) (interpretation of 'sale or lease' timing under ILSA)
- Aldrich v. McCulloch Props., Inc., 627 F.2d 1036 (10th Cir.1980) (statutory interpretation of ILSA provisions)
- Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194 (U.S. 1993) (dictionary/tense interpretation in statutory construction)