Plain English Breakdown
The official text contains some editing artifacts (e.g., 'on behalf of another person and selling... to them'), but the core meaning regarding licensing and disclosure remains clear.
AB-1850: Real Estate Wholesaling Rules
This law requires people who wholesale real estate to have a license and clearly state in writing that they do not own the property.
What This Bill Does
- Expands the definition of a real estate broker to include people who enter into contracts or options to buy property with the intent to sell, assign, or market them for profit.
- Requires anyone doing wholesaling to hold a valid real estate license from the Department of Real Estate.
- Mandates that wholesalers write and tell property owners they will not take legal title to the home or land.
- Requires advertisements about selling these contracts to state in writing that the seller does not own the property.
- Treats failing to give this written notice as substantial misrepresentation, which can lead to disciplinary action.
Who It Names or Affects
- People who buy real estate contracts with the plan to sell or assign them for profit (wholesalers).
- Property owners who sign contracts with wholesalers.
- The Department of Real Estate, which regulates these activities and issues licenses.
Terms To Know
- Wholesaling
- Entering into a contract or option to buy property but planning to sell that contract or option to someone else for profit without taking ownership of the land itself.
- Real Estate Broker License
- Official permission from the state Department of Real Estate required to legally perform certain real estate business activities, including wholesaling under this law.
- Substantial Misrepresentation
- A serious false statement or failure to disclose information as defined by the bill; failing to provide required written notices is considered substantial misrepresentation and can lead to disciplinary action.
Limits and Unknowns
- The official text states no reimbursement is required for a 'specified reason,' but does not detail what that specific reason is.
- While the bill passed both chambers, the exact effective date is not provided in the source material.