Is This Legal?!

[Edwin Duran]

So Ive got some written contracts, Im wondering if i could sell these ?! Is it legal ?

Examples include applications to rent, lease options.. etc

[Bill Gulley]

Had you said "blank contracts/forms" that would have avoided my previous response. :)

I'd have an issue with you saying "professionally prepared" as well. If you paid someone to type or print them, there was a business transaction involved and that person may have a vocation in printing or editing and their participation may invoke a profession being involved. But saying a contract, a legal instrument is professionally prepared means to any prudent person that the instruments were prepared or written by an attorney. Are you an attorney? I'd think not, had you been you wouldn't have asked the question.

As to contracts, you aren't qualified to write contracts, regardless of what experience you might have unless you are an attorney or a licensee in the state you're providing a contract as a Realtor and Realtors are limited to a per transaction and other limitations. I'd suggest you get an attorney to review the contracts and then you can truthfully say the contract has been professionally reviewed.

Another issue is that each state has different requirements, one contract may not (will not) cut it in all states. You might try to devise state specific contracts according to where the contract is to be used.

There are stores that sell business contracts. Those that I've seen are worth about the weight of the paper at a paper drive for some school fund raiser. But, there is no law restricting the sale of forms, it's the drafting of the forms that becomes an issue.

Anyone can write a contract IF they are a party to that contract, one of my biggest gripes is that people seem to think they know enough about contract law and real estate that they are qualified, they don't have a clue, a hard pill to swallow, but they really don't in addressing all that needs to be addressed. If you stick to standard contract form and structure with accepted covenants and reword a form that might be something at the layperson level, but most usually screw that up. Realtors here have been nailed for the unauthorized practice of law by writing too much in addendums and they thought they were "qualified".

As to applications, anyone can take a Fannie Mae 1003 application and copy the form changing the heading to "Lease Application" and get everything they could possibly need to evaluate an applicant.

There are also certain questions you may not ask, by law, what you ask may lead to trouble. Applications that ask unconventional questions can be seen as a basis for discrimination as well. Discrimination is an odd animal, there are matters covered by law, race, religion, etc. but you can also get in trouble in rentals if you exclude those in the general public based on any formal process or requirement that is not an accepted practice. For example, you want to only lease to teachers and exclude others who are generally qualified. You can rent to teachers but you can't really exclude all other sources of income or professions except under specific arrangements, such as an association. You certainly discriminate in leasing, but it's an accepted underwriting practice that is the basis.

Asking if they are interested in buying a home on a rental application can cause problems too, only leasing to those interested in buying a property can cause issues. Such matters can be brought up in conversation rather than making an applicant answer a question. For example, the landlord advertises for rent, then it appears they are accepting those willing to buy and not just to lease. Have you heard of bait and switch? False advertising?

Applications for anything are an audit trail in legal matters and lease applications are the source documents for real estate lease agreements. Applications become a part of legal contracts by reference or implication as representations made to contracting. It's not just "be careful of what you ask for" it's be careful of what you ask!

I'd say you're allowing your ambitions to overload your expertise and qualifications, asking the question you asked is evidence of you expertise in business law, so you're not a legal professional to be in a position to say you can provide professionally prepared documents. Your docs may be just fine, but I really doubt you have complied with all state requirements of 50 states to hit the market with your "product". BTW, Legal Zoom and other such sites who have attorneys behind them offer state specific products.

Lastly, from a market standpoint, a 1003 application is a quasi government document in the public domain and is rock solid in court as a source document, you can't compete with it's acceptance or validity. A 1003 obtained from some loan officer or mortgage company is free, how can you profit from that price? The cost of someone photocopying it with a different heading and cutting off the bottom margin is pretty inexpensive for the first one, copies after that are what, 5 cents, 10 cents at the library ?

What many don't know is that a purchase contract can be reviewed by many people that are not a party to the initial agreement, banks, title folks, Realtors/offices, appraisers, closing agents, attorneys, and regulators from a bunch of different angles. They are all aware of the confidential nature of a contract but your contract could be viewed by 20 or 30 people, maybe more. While most won't scrutinize a contract, some do, if it's screwy or unconventional, you can have issues that haunt you without you even knowing it or you may find out later too. Newbies need to be aware of the grapevine in RE, you usually don't do anything under a contract that will be secret.

I'd suggest you go back to the drawing board for a business plan. :)