Unlicensed wholesale Ohio

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Are there any unlicensed realtors/brokers in Ohio doing wholesale deals?I talked to a lawyer the other day about wholesaling, and I showed him a purchase and assignment contract, and he gave me the hammer.

Here is our discussion:

4735.01 Real estate broker definitions

As used in this chapter:

• a)“Real Estate broker” includes any person, partnership, association, limited liability company, limited liability partnership, or corporation, foreign or domestic, who for another, whether pursuant to power of attorney or otherwise, and who for a fee, commission, or other valuable considerations, or with the intention, or in the expectation, or upon the promise of receiving or collecting a fee, commission, or other valuable considerations does any of the following:
• 1)Sells, exchanges, purchases, rents, or leases, or negotiates the sale, exchange, purchase, rental, or leasing of any real estate;
• 2)offers, attempts, or agrees to negotiate the sale, exchange, purchase, rental, or leasing of any real estate;
• 3)lists, or offers, attempts, or agrees to list, of auctions, or offers, attempts, or agrees to auction, any real estate;
• 4)Buys or offers to buy, sells or offers to sell, or otherwise deals in options on real estate;
• 5)Operates, manages, or rents, or offers or attempts to operate, manage, or rent, other than as custodian, caretakers, or janitor, any building or portion of buildings to the public as tenants;
• 6)Advertises or holds self out as engaged in the business of selling, exchanging, purchasing, renting, or leasing real estate;
• 7)Directs or assists in the procuring of prospects or the negotiation of any transaction, other than mortgage financing, which does or is calculated to result in the sale, exchange, leasing, or renting of any real estate;
• 8)Is engaged in the business of charging an advance fee or contracting for collection of a fee in connection with any contract whereby the broker undertakes primarily to promote the sale, exchange, purchase, rental, or leasing of real estate through its listing in a publication issued primarily for such purpose, or for referral of information concerning such real estate to brokers, or both, except that this division does not apply to a publisher of listings or compilations of sales of real estate by their owners;
• 9)Collects rental information for purposes of referring prospective tenants to rental units or locations of such units and charges the prospective tenants a fee.

Therefore, I believe that if you engage in the actions we discussed, it may make you and/or your business an unlicensed real estate broker.  There are actual criminal penalties that may be ascribed for being an unlicensed real estate broker in Ohio.The criminal penalty for such activity is a 1st degree misdemeanor and a $1,000 fine for each day during the violation.Just so you know the maximum jail sentence for a 1st degree misdemeanor is 180 days in jail.

The above is not inclusive of any civil penalties, if they ever arose.  However, in my opinion, the risk of the potential grey area you may fall into by just trying to assign the contract rather than the real estate do not make it worth the risk.  I suggest that you review the above-referenced statue and the Ohio Real Estate Commission’s website for further information.  You may want to check out the Ohio Attorney General’s website as well.

As far as the blank purchase and sale, and assignment documents that you offered to me to review, I believe that they fall well short of containing the required state and federal disclosures and could potentially expose you to unwanted and unnecessary liability.  Unless you really know what you are doing, obtaining blank forms form the internet is a very bad idea… especially those from another state.