Question: I am an attorney representing a sponsor of a new construction condominium. We are preparing for a changing market and would like to understand when rescission is warranted under the Martin Act. Can you explain?

Answer: While there are in fact some instances where rescission must be offered to purchasers as of right, there is also the materiality standard that applies to offerings governed by the Martin Act—New York’s blue sky law. I will try to give you a general overview of instances where the Department of Law regulations expressly provide for rescission, as well as some important cases that discuss the materiality standard under the Martin Act.