Originally posted by @John Thedford:
Originally posted by @Harlan Cox:
Originally posted by @John Thedford:
Originally posted by @Jeff Rabinowitz:
At the moment there have been few prosecutions of those calling themselves wholesalers and acting disreputably. The proliferation of "practioners" is getting the attention of the licensing boards of several States. Once an Attorney General or two joins the fray wholesalers may change their mind about the risk profile. At the moment, I would agree that is not likely that a "wholesaler" will be fined or prosecuted in most jurisdictions. However, the consequences if you are chosen as a test case are serious--potentially life changing. I also think that it will become more and more likely that individuals will come before boards in the near future. Remember, there is an army of licensed Realtors out there, many of whom think this is their turf and are more than happy to give the licensing departments a call when they see people practicing without a license. So, as Clint Eastwood once said, do you feel lucky?
The consequences of being charged with brokering without a license in Florida are not necessarily from a criminal standpoint. That is possible. The state classifies this as a felony. Another consequence should they not prosecute is a cease and desist order and a civil fine. If someone has this occur, it may forever bar them from practicing real estate. If you love this business, love the opportunities, etc...stay within the law. We have two locals that the state has found complaints against them to be legally sufficient. Their names appear on the state website where you can look up complaints for unlicensed activity. No matter the end result, having this as a public record with ones name attached is very negative and may affect their ability to do business even in a lawful manner. I don't know either party, but under no circumstance would I deal with them.
My question now is, how could one be prosecuted for wholesaling properties. Are there certain contingencies that need to be placed in my contract in order for me to avoid a "brokering without a license" charge or should I just have a REA review my contract to avoid any legal trouble.
It is my understanding that once a "wholesaler" starts advertising a property they do not own, that violates FL law re" brokering without a license. Under FL law that is a felony. You can go to the state website www.myfloridalicense.com, then go to unlicensed activity, and then search the unlicensed complaints. If you broker a contract, that is legal. If you advertise the house rather than the contract, that is brokering without a license. We have a REIA in the area where they teach members to illegally broker. They may not see it as that but the state does. They go so far as to encourage "wholesalers" to get signed agreements from the homeowners giving them permission to "show, market, advertise" etc the property. What do you think a listing agreement does? Gives the brokerage permission to show, market, etc the property. Just because someone gives a "wholesaler" permission to commit illegal acts doesn't make it defenseable! There are at least two local "wholesalers" where the state has determined there is probable cause due to complaints for unlicensed brokering. I could give you written permission to rob a bank but...that won't protect you:) As far as giving you advice or contingencies to protect you I can't offer anything. My best advice would be: talk to the DBPR to make sure your actions are lawful. They are the ones that investigate and recommend action against people they believe are violating license laws for any profession regulated by the state (real estate, hair stylists, contractors--there are dozens of them). My biggest concern for most "wholesalers" is the making of promises under false pretenses. If you want to BUY a house, sign a contract. If you don't intend to BUY it, signing a contract stating you do is dishonest at best. As far as HOW could someone be prosecuted: it is there in the state statutes. Contact DBPR for clarification. You can go on the BP marketplace and find several people that are probably brokering without a license. Eventually, they will be discovered or turned in and then they will have to deal with whatever the state decides to pursue. If the state finds that someone is brokering without a license, I would be concerned whether they could ever get a license to operate as an agent or maybe ANY professional license?
OP: You are looking at 3rd degree felony in the state of Florida if you are found guilty of advertising property without a real estate license. That will get you up to 5 years prison time, 5 years of Probation, and/or $5000 fine (not including personal expenses, lawyer, etc.)
I believe collecting a commission without a license bumps you up to a 2nd degree felony.
There are obvious ways to avoid this but all it takes is written complaint from a competitor, a sour buyer, or a real estate agent/broker to cause havoc.
