Individual Liability of Shareholders, Officers, and Directors Under the Interstate Land Sales Act
45 N.Y. Real Property Law Journal No.2 Spring/Summer 2017, 18-22
6 Pages Posted: 12 Jun 2017
Date Written: June 8, 2017
Real estate developments are typically conducted through the medium of business entities intended to shield its owners of individual liability. Corporations, limited liability companies and limited partnerships have traditionally been viewed as effective mechanisms to accomplish this outcome. Does current law continue to allow such mechanisms to create a shield from individual liability? This article explores this issue by examining the liability provisions of the Interstate Land Sales and Full Disclosure Act (ILSA). The conclusion drawn is that the terms of the Act, as interpreted and applied by the courts, allow owners of these business entities to be held individually liable for fraudulent conduct in violation of the Act.
Keywords: Fraud, Individual Liability, Interstate Land Sales Act, Control Person Liability
JEL Classification: K11, K42
Suggested Citation: Suggested Citation