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Getting Busted in Ohio for Wholesaling and Praticing RE without a License
#5 Guru, Book, & Course Reviews Contributor
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Read Ch 4735
Get a lawyer
Get licensed and do wholesaling in OH
02 July 2014
http://www.com.ohio.gov/documents/Fall10REdiscipline.pdfLYNETTE S. MALY, Twinsburg, Ohio, was found by the Commission to have violated Revised
Code 4735.02, unlicensed activity, and was accessed a civil penalty in the amount of $500.00,
when she held herself out as engaged in the business of real estate, while not licensed under
Revised Code Chapter 4735.
SHARI L. MORTER, Stow, Ohio, was found by the Commission to have violated Revised Code
4735.02, unlicensed activity, and was accessed a civil penalty in the amount of $500.00, when
she held herself out as engaged in the business of real estate, while not licensed under Revised
Code Chapter 4735.
MIKE ZUREN, Willoughby, Ohio, was found by the Commission to have violated Revised Code
4735.02, unlicensed activity, and was accessed a civil penalty in the amount of $1,000.00. The
Commission found that Mr. Zuren, when in expectation of collecting a fee, commission or other
valuable consideration, held itself out as engaged in the business of selling real estate in a
publication and offered or attempted to offer, listed or attempted to list 20 real estate properties
in the publication, without first being licensed under Revised Code Chapter 4735.
SHARI L. MORTER, Stow, Ohio, was found by the Commission to have violated Revised Code
4735.02, unlicensed activity, and was accessed a civil penalty in the amount of $500.00, when
she held herself out as engaged in the business of real estate, while not licensed under Revised
Code Chapter 4735.
GARY UNDERHILL, Wooster, Ohio, as the result of an investigation of the formal complaint,
was found by the Commission to have violated Revised Code 4735.02, unlicensed activity, and
was accessed a civil penalty in the amount of $2,500.00. The Commission found that Mr.
Underhill attempted to or assisted in the negotiation of the sale, exchange, purchase, rental or
leasing of real estate on 47 occasions without first being licensed under Revised Code Chapter
4735.
PAM BALINT, Ravenna, Ohio, was found by the Commission to have violated Revised Code 4735.02, unlicensed activity, and was assessed a civil penalty in the amount of $3,500.00. The Commission found that Ms. Balint acted as a real estate broker or real estate salesperson without being licensed under Chapter 4735. Ms. Balint’s conduct included accepting phone calls inquiring about the subject property and directing or assisting in the procuring of a prospective buyer to purchase the subject property. In addition, on five occasions Ms. Balint advertised or held herself out as engaged in the business of selling real estate. She placed signs with her phone number on it in the subject property’s yard. She ran an ad in a newspaper regarding real estate for sale with her phone number and name. She provided a flyer marketing the subject
property with her name and phone number on it. She marketed the property on the phone on two occasions.
EVIE KIDDER, Akron, Ohio, was found by the Commission to have violated Revised Code 4735.02, unlicensed activity, and was assessed a civil penalty in the amount of $21,000.00. The Commission found that she consistently took actions to list, negotiate the sale of, sell a property, and made several requests to collect a commission on the sale of a property. Ms. Kidder acted as a real estate broker or real estate salesperson without being licensed under Chapter 4735.
TONY HOFFMAN, Akron, Ohio, was found by the Commission to have violated Revised Code 4735.02, unlicensed activity, and was assessed a civil penalty in the amount of $21,000.00. The Commission found that he consistently took actions to list, negotiate the sale of, and sell a property and made several requests to collect a commission on the sale of a property. Mr. Hoffman acted as a real estate broker or real estate salesperson without being licensed under Chapter 4735.
DIANE SHELTROWN, Waynesville, Ohio, was found by the Commission to have violated R.C. 4735.02, unlicensed activity, but no penalty was imposed. Ms. Sheltrown, on 2 separate dates, directed and assisted in the procuring of prospects which was calculated to result in the sale of a property and she intended or expected to receive compensation or other valuable consideration for the conduct.
MUNNA AGARWAL, Euclid, Ohio, was found by the Commission to have violated ORC 4735.02, unlicensed activity, and was assessed a civil penalty in the amount of $1,000.00. The Commission found that Mr. Agarwal agreed to negotiate and negotiated a potential purchase of property, agreed to list and listed, agreed to offer and offered a property for sale, advertised and held himself out as engaged in the business of selling real estate, directed and assisted in the procuring of prospects and in the negotiation of a transaction which was calculated to result in the sale of a property and intended or expected to receive compensation or other valuable consideration for the above conduct, while not licensed under Chapter
4735.
ELYHUE E. DUFF, Akron, Ohio, was found by the Commission to have violated ORC 4735.02, unlicensed activity, and was assessed a civil penalty in the amount of $1,000.00. The Commission found that Mr. Duff assisted in the procuring of a prospect and negotiation of a transaction, which was calculated to result in the sale of a property, wrote a sales contract for the parties, and intended or expected to receive compensation or other valuable consideration for the above conduct, while not licensed under Chapter 4735.
Originally posted by :
I'm not an attorney and this isn't legal advise, but I'm a Realtor and investor in SC. I've wholesaled properties, as well. You can not provide and "fiduciary duties" to anyone regarding real estate without a real estate license or without being an attorney. You also can not market a property for sale that you do not have any "ownership interest" in. That's why you wholesale properties after you have a ratified contract. Once your offer has been accepted, it gives you the necessary ownership interest to market the property for sale. Basically, you just can't pretend to be an agent because that's fraud. If you're transparent with your buyers and sellers, it isn't an issue. And you must make sure that you have the property under contract before you market it for sale.
Negative, Ghost Rider.
Unless the P&SA specifically grants and conveys equitable interest IN THE PROPERTY, you cannot legally market the property at all as you do not have equitable interest in the property. You have equitable interest in the contract only.
That's exactly why Ohio started cracking down. They actually cover this live in the video with Jeff Watson.
Anybody that markets real estate, even lawyers, and gets paid a commission needs a license. Just get a license.
So when you all say to get a license, do you mean just and RE license or an actual brokerage license?
Originally posted by @Jackie F.:
you have to have an RE sales license for a period of time before you can get a brokers license.
Hello- I'm "new " and just now reading these from (2) years are so ago, but my question is: Why is it Legal for the Seminars (Gurus) to teach and take money from people who's wanting to learn how to better themselves with finances? And it's illegal to do it without a license! I'm just asking? I don't mind that I need to get my license, because I really would like to be in Real Estate, and be Legal!!! It should be illegal for this to be taught and letting people think they can do it! But what I don't understand as well, is that it has been done.
Hello my name is Bo and I am new to REI.I live in North Dakota and tried to research N.D. real estate law to find out if wholesaling is legal in North Dakota.I would appreciate any information on the legal right to wholesale properties in North Dakota.
Can you get around this if you double close?
would having an LLC help in this situation?
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#5 Guru, Book, & Course Reviews Contributor
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I started this thread a long time ago, in the big thing about Wholesaling in Ohio is that you have to have the ability to close, meaning that if you can't find a cash buyer you have to be able to buy it from the seller quickly.
What the regulators in Ohio do not want is sellers wasting their time with wholesalers that say they have private lenders or business partners or buyers, where in effect you don't and youre lying to them.
Ohio, Florida, and California are creating laws or have created laws to make it either a misdemeanor or a felony me to misrepresent the facts to home sellers.
Think of it this way, if you can get on title then resell you are fine.
Ways to get on title are buying on land contract, buying on a wraparound mortgage, buying on a contract for deed, etc.
Another problem that is common is that somebody has a property that they have "under contract" but not on title, and they market the property for resale as if they own the property and are on title. The regulators of the real estate commission hate that.
#5 Wholesaling Contributor
- Real Estate Broker
- Naples, FL
Originally posted by @Brian Gibbons:
I started this thread a long time ago, in the big thing about Wholesaling in Ohio is that you have to have the ability to close, meaning that if you can't find a cash buyer you have to be able to buy it from the seller quickly.
What the regulators in Ohio do not want is sellers wasting their time with wholesalers that say they have private lenders or business partners or buyers, where in effect you don't and youre lying to them.
Ohio, Florida, and California are creating laws or have created laws to make it either a misdemeanor or a felony me to misrepresent the facts to home sellers.
Think of it this way, if you can get on title then resell you are fine.
Ways to get on title are buying on land contract, buying on a wraparound mortgage, buying on a contract for deed, etc.
Another problem that is common is that somebody has a property that they have "under contract" but not on title, and they market the property for resale as if they own the property and are on title. The regulators of the real estate commission hate that.
Florida states using contracts to circumvent licensing law is considered brokering.
There are only two ways to legally "wholesale" in FL:
1. be licensed
2. own it
Brokering without a license in FL is a 3rd degree felony. Now it is apparent why unlicensed brokers try to hide their identity, etc when illegally advertising properties they do not own. The frauds and scammers on BP are now advertising hiding the property address. That is still illegal and will not keep them out of trouble with the state.
Florida Statue 475.43
475.43 Presumptions.—In all criminal cases, contempt cases, and other cases filed pursuant to this chapter, if a party has sold, leased, or let real estate, the title to which was not in the party when it was offered for sale, lease, or letting, or such party has maintained an office bearing signs that real estate is for sale, lease, or rental thereat, or has advertised real estate for sale, lease, or rental, generally, or describing property, the title to which was not in such party at the time, it shall be a presumption that such party was acting or attempting to act as a real estate broker, and the burden of proof shall be upon him or her to show that he or she was not acting or attempting to act as a broker or sales associate. All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.
Thank you Brian and John for your response to my thread.This is the first time I have used BP to get information on REI and I am extremely satisfied with the information that both of you provided.I will use BP as a source of reference more often.
#5 Wholesaling Contributor
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- Naples, FL
Originally posted by @Ben Kingree:
Thank you Brian and John for your response to my thread.This is the first time I have used BP to get information on REI and I am extremely satisfied with the information that both of you provided.I will use BP as a source of reference more often.
BP can be a great source of information-good info or bad info. Never hurts to double check to make sure you are getting good guidance.
So what happens if you use a transactional lender to fund the a to b transaction, can double close with C the buyer is that still against the law with the RE commission?
Originally posted by @Jason Hernandez:
So what happens if you use a transactional lender to fund the a to b transaction, can double close with C the buyer is that still against the law with the RE commission?
As long as you buy it you can resell it, covered many times in this thread.
Simple way to avoid all this is to stop acting like a moron by tying up property, then letting the entire world know that you're trying to unload it. Putting a sign in the front yard? Listing it? That is not wholesaling on any level. That's just dumb. Dumb. Dumb. Dumb.
This is why I have said and will continue to say that rehabbing and flipping is the EASIEST way to make money in this business. You buy cheap using hard or private money. (There is no law against getting a good deal as long as you're not bilking little old Mrs. Johnson down the street or taking advantage of Mr & Mrs Neverdowell who are in foreclosure.) You fix up the dump with off the shelf goods from Home Depot and you relist with an agent. It's so easy. Sooo easy.
If you're pretending to be a wholesaler and advertising the property for sale without knowing exactly who your buyer is going to be before you even negotiate the deal, you're doing it all wrong and you deserve the stiffest, most severe financial penalties they can slap you with. They ought to rename those penalties a Dumb Dumb Tax.
Here's a great video put out by Jeffrey Watson of National REIA discussing with the Ohio Department of Commerce Division of Real Estate what is legal and illegal in Ohio.
https://www.youtube.com/watch?v=9fi54S8nwUA
Just to shed a little light on the video @Eric Sztanyo posted Kimberly Wells the Division Counsel, Ohio Department of Commerce Division of Real Estate said, and I'm paraphrasing just a tad bit, You can NOT sell a property you DO NOT own, but YOU CAN sell a Contract or Purchase Agreement of the property you want to sell. In other words, Wholesaling is legal in Ohio as long as you are careful with your wording - and let the seller know in advance that you will be assigning the Purchase Agreement to another Investor.
Hope this clears things up. :)
Aaron Phillips
i don't live in Ohio but I'm new to this how do I find the laws for north Carolina ?
@Monica Whitlock Check out the NC General Statutes and check out what the NC REC (Real Estate Commission) has to say on practicing brokerage without a license.
Interesting. Sounds like the State of OH, is in the business of removing business. I noticed there was one person who had a complaint filed against them, the result was a fine. Interesting, so do they fine folks who have complaints and run business'? How can something subjective be found to have... fault? Interesting, many prayers for those working in/around/near OH.
This whole thread had me pretty freaked about figuring out how to Wholesale in Ohio. Luckily, I went to a couple of different sources. And thankfully, Jeff Watson (an Ohio attorney), actually sat down with the Ohio Department of Commerce Division of Real Estate to understand their enforcement rules on camera.
Now, it has been a little while since these were made so it would behoove anyone to ensure that there has not been further guidance since that time. But I wanted to share so that we could know "from the horses mouth" so to speak about the truth on Wholesaling in Ohio. Enjoy!
Texas law is very clear I think? You don’t need a license as long as walk this straight line
Quote:
A new Senate Bill signed by Governor Greg Abbott that takes effect September 1, 2017 seeks to clarify certain actions by a wholesaler that do not require a real estate license.
Senate Bill 2212 amends Chapter 1101 of the Occupations Code (Commonly referred to as the Texas Real Estate Licensing Act) by clarifying when an unlicensed person may sell or offer to sell real estate options or interests. Section 1101.0045 of the code states that:
(a) A person may acquire an option or an interest in a contract to purchase real property and then sell or offer to sell the option or assign or offer to assign the contract without holding a license issued under this chapter if the person:
does not use the option or contract to purchase to engage in real estate brokerage; and
discloses the nature of the equitable interest to any potential buyer.
(b) A person selling or offering to sell an option or assigning or offering to assign an interest in a contract to purchase real property without disclosing the nature of that interest to a potential buyer is engaging in real estate brokerage.Act of May 28, 2017, 85th Leg., R.S., 2017 TX S.B. 2212 (to be codified as Tex Occ. Code. § 1101.0045 and Tex. Prop. Code § 5.086).
Source & more information: