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on a contract-on an installment contract—at any time during the contract period.

On balance, however, we feel the Minish bill goes a long way all pepes toward protecting consumers from the most fagrant and prevalent

land sales abuses. able until

I would like to conclude by telling you about a phone call I got a e might si few months

ago from a woman in New Hampshire, and I must say, I get similar phone calls at least once a week and sometimes more often.

The woman and her husband had just sold a small family business limitawa: and were looking for someplace to invest the proceeds, about $9,000. e right to They thought of land, and accepted an invitation for an all-expenseunit the fruit paid weekend in Florida to see a very large subdivision called Lehigh mar being

Acres.

There they made a downpayment and signed their installment contract for a quarter-acre lot priced at $7,195.

The woman called INFORM shortly thereafter because she read a

magazine report on our research and had become concerned about the Gre OILSI: soundness of her investment.

As I spoke to her, it became clear that she had not seen the lot she signed for. Only one which the salesman described as similar to it, that the lot was not improved, although she thought these improvements

were promised in the future, and that she had no idea of how the price nd if Deres of her lot compared to the prices of comparable lots on the resale

market. She had received only the Florida property report, which is permissible in certain situations under current OILSŘ regulations, which gives only very sketchy information on these issues.

Lehigh Acres was not one of the projects which we studied in de

tail, so I could not give her detailed answers to her questions, but from leys for f the description of the sales operation and the location of the subdivi

sion, in one of the most oversubdivided sections of the State, and what I knew of similar projects, I feared the worst for the future of her lot as an investment.

I think this woman was concerned enough that she would go out and get the answers she needed, and if she found that her land was a poor investment, she was at least only at the beginning of her contract period, and would lose only the $700 she had made as a downpayment.

My point here, however, is that this woman and thousands like her deserve more protection than they now get. Mr. Brown this morning mentioned the edict of caveat emptor, but like most Americans, this woman is a decent, basically trusting person. She is not unintelligent, but she did not operate on the assumption that others are out to cheat her. She also does not operate on the assumption that the law permits fraud or allows it to go on, and she is not a gambler out to make something for nothing in real estate. She deserves to have, as Congressman Minish

proposes, 30 days in which to talk to knowledgeable individuals, and if she discovers problems, she should receive a refund. If she is paying on an installment contract which gives her no equity in the land, she deserves to have 3 years to cancel and get a refund. She deserves to have money escrow to guarantee the completion of improvements, and she deserves to receive a Federal property report.

We strongly urge you to oppose the Nelson amendments in conference, amendments which would take away the property report for thousands of consumers, because consumers need the property report

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and because the administrative regulations proposed by OILSR will shortly accomplish the same basic goal, that of helping small business, by a better means.

We also hope you will give serious consideration to the Minish bill and to certain provisions of the original administration bill which we do not have the time to discuss here. The entire area of land sales regulation deserves your serious and thoughtful review.

And I would like to thank you for taking time to spend several days on the subject.

[Ms. Halloran's prepared statement, on behalf of INFORM, follows:]

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My name is Jean Halloran.

I am Research Director of INFORM

and the editor of INFORM's three-volume study of the retail land

sales and subdivision industry entitled PROMISED LANDS. With me is

Leslie Allan, primary author of PROMISED LANDS.

By way of background, I would just like to say that INFORM

is a nonprofit public-interest research organization that studies

the impact of business on society. We have a permanent full-time

staff of 20 and a subscriber list of over 100 major corporations,

institutions and government agencies. Our organization has been

studying the practices and regulation of the land sales industry for

five years.

Our primary finding has been that the land sales and subdivision

industry is rife with consumer abuse; that it is riddled with problems

of consumer deception and fraud. Our conclusion was that a new

regulatory approach is sorely needed.

For this reason,

we feel

Congressman Minish's effort to reform the Interstate Land Sales Full

Disclosure Act is a vital step forward, a step which could save

ordinary people millions of dollars.

For the same reason, we are

extremely dismayed to see Senator Nelson's bill, which would exempt

vast numbers of developers from what little regulation now exists,

progressing through the legislative process. We understand and indeed support the goal of reducing the regulatory burden on small

legitimate businessmen and freeing federal regulators for more impor

tant tasks. But

the broadly worded Nelson provisions go far beyond

this goal. The past history of this industry docs not justify such

loosely drawn exemptions, nor does it justify the hasty consideration

given the Nelson amendments by the Senate Banking Committee prior to

substituting them for the Administration proposals in the Housing and Cortunity Development Act of 1978.

I would like, if I may, to tell you some of what we found in

our research, and then discuss specifically how this relates to the

various legislative proposals on land sales you have before you today.

The impact of the land sales industry is enormous,

but no one

seems to know exactly how enormous. Existing fragments of descriptive

data only suggest the broad features of land sales activities.

The land sal

industry is generally defined as consisting of

companies engaged in selling lots in subdivisions. The companies

range from mom-and-pop affairs to multi-million-dollar corporations

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traded on the stock exchange. The lots range from 1/8 acre "townhouse"

lots to 40 or 50 "ranchettes;" and the subdivisions from 5-lot develop

ments to 200,000 lot "planned new comunun itics." Since 1969, companies

selling lots of less than 5 acres in size in subdivisions of over

50 lots in size must file with the Federal Office of Interstate Land

Sales Registration. Alan Kappeler, of OILSR, estimated in June of '76

that approximately 6200 individual subdivision projects are registered

with his agency.

The President's Council on Environmental Quality

has found that most developments registered with AIUD are relatively

large, averaging about 1,000 acres, and that most of the lots marketed

are relatively small, about a quarter-acre to one acre.

Another analysis of OILSR's filings indicates that there are

subdivisions registered in all states except North Dakota and Rhode

Island, and that the most subdivision activity is concentrated in six

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states: Florida, New Mexico, Arizona, California, Colorado, and Texas.

lowever, OILSR's filings may be very incomplete. For example, it had

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