Posted by Brett Clutters on April 07, 2005 at 20:54:09:
I spoke with an attorney and he said that because we were doing simultaneous or double closings that we would indeed have a personal interest abd would NOT require a license.
Another investor told me in order to CYA that we should have that lawyer or another lawyer to put that in writing. I guess I need to do that next.
URGENT- Legal issues in West Virginia - Posted by Brett Clutters
Posted by Brett Clutters on March 30, 2005 at 12:55:18:
We are new to the game in Charleston, WV. We were told today that in order to do wholesaling AND lease options we would have to have our brokers license. The lawyer gave us a copy of the West Virginia Real Estate License Act WV Code 30-40. The code is found at this web address:
Could someone please ease our minds and tell us that they have done these types of transactions here in WV?
Re: URGENT- Legal issues in West Virginia - Posted by JohnBoy
Posted by JohnBoy on March 30, 2005 at 14:00:05:
Read page 2, 30-40-5 Scope of Practice; EXCEPTIONS
This does not apply to people acting for themselves.
Read section (c) 1 thru 9. These are the exclusions that would exclude you from having to have a license.
Re: URGENT- Legal issues in West Virginia - Posted by Brett Clutters
Posted by Brett Clutters on March 30, 2005 at 14:11:47:
So if I do a sandwich lease/option and plan to make a profit by doing so, I am acting with my own personal interest in mind?
In section 30-40-5 part C, number 1 says, ?The provisions of this article do not apply to: any person acting on his or her own behalf as owner or lessor of real estate.?
I read that as long as I have the option to purchase a home, I can do what I like with it. I also read that as if I wholesale a home, as long as I have the house under contract as a buyer and then sell or assign it to someone else, I can also do whatever I like with it.
Is that what you are saying?
Re: URGENT- Legal issues in West Virginia - Posted by JohnBoy
Posted by JohnBoy on March 30, 2005 at 14:28:42:
That’s the way I read it. As long as you are acting on your own behalf as a principle then you are exempt from needing a license.
Only when you acting FOR ANOTHER on their behalf and collecting a fee, compensation, etc., then you would need a license.
Re: URGENT- Legal issues in West Virginia - Posted by Brett Clutters
Posted by Brett Clutters on April 06, 2005 at 22:45:28:
Things are just getting uglier and UGLIER!
I spoke with the head of the Real Estate Commission in the state of West Virginia. I am going to meet with him personally and show him the contracts we use but he said that a man in the Eastern panhandle of our state was doing the lease options EXACTLY like we are taught through Whitney and they ARRESTED HIM!!!
His exact words were “This guy was getting a lease for $10 and getting an option for another $10 or just $10 total and then he was tying up people’s properties and trying to sell it. We told him that he could not sell anything that he did not have title on UNLESS HE WAS A BROKER and he ignored us so we had him arrested.”
OK…this scares the crap out of me!!! You mean to tell me, after spending ALL that money on this education, we now find that WE CANNOT EVEN DO BUSINESS IN OUR STATE???
Someone HELP!!!
Re: URGENT- Legal issues in West Virginia - Posted by JohnBoy
Posted by JohnBoy on April 06, 2005 at 23:44:22:
I don’t know what Whitney teaches and I don’t know what this other guy was doing, but doing lease options does not require a license.
First of all, how are you going to lease a house for only $10??? In most cases, the seller has a mortgage on the property and your lease is going to have to require you to pay at least the amount of his mortgage payments as rent. Otherwise, who is going to make the seller’s payments? How is his mortgage going to get paid?
If YOU owned a home and had a $1,000 mortgage payment on it, would you lease it out for only $10??? Of course not! You would need at the minimum at least $1,000 per month for rent just to cover your payments! You’re not going to lease it for just $10 and then pay the $1,000 per month out of your pocket! So something isn’t right here with the way he was structuring his deals.
As far as $10 for the option, that is legal. You are only required to give something of value to make the option a binding contract. It doesn’t even have to be money. If you offered to do repairs and maintain the property to get an option on it, that is something of value.
As far as selling something you don’t own, that is not at all what you are doing. You would own it prior to selling it. If you did a simultaneous closing when the time comes to exercise the option, you would be buying from the seller taking title in your name, then selling to your buyer giving title to him. So title would pass to you before it passes to your buyer. So you would own it first!
Or you may assign your contract to your buyer. You wouldn’t be selling the property. You would be selling your contract. YOU own the contract. The contract IS assignable. So YOU can sell it to someone else. So you are selling something you own!
As far as going to see the real estate commission, why??? They are there to over see REALTORS AND BROKERS! You are not a realtor or a broker. They are not attorneys! You need to see your attorney! You’ll only get different stories from different people dealing with the real estate commission. They are not lawyers. They are not the law! They can report you to the law if they suspect you are violating it, but they aren’t the ones that make arrests. They issue fines and suspend licenses of realtor and brokers who violate the law.
Go see an attorney and have him look at your contracts.
As far as this other guy being arrested, he was obviously doing something else that was illegal. And even if you are arrested, it doesn’t mean you are guilty of a crime. That still has to be proven in a court of law.
Was this guy convicted? If so, convicted of what? There is a lot more to it than just leasing property with an option to buy and then subleasing it with an option to someone else.
Maybe he was just tying up property and then finding buyers and bringing the buyer and seller together for a fee where the buyer and seller were buying and selling from each other and the investor was getting a profit for bringing them together. That is doing for another and that requires a license.
Buying on your own behalf and selling your property or contract to someone does not require a license.
You are talking to the wrong people about this. They may likely just tell you you can’t do this without a license because they don’t like it or they don’t know the difference and understand the law correctly.
Go talk to a lawyer if you are worried about this. Not the real estate commission.
Who’s contracts are you using? Whitney’s? I’ve never seen his contracts so I couldn’t comment on them. But leasing from someone and getting an option to buy their property does not require a license. Subleasing a property and giving an option to buy it while you have a valid contract to lease it and an option to buy it does not require a license. Selling your contracts does not require a license.
I read the laws you posted a link to and it is clear as day that as long as you are a principle you don’t need a license. You are exempt! You only need a license when acting FOR ANOTHER. When bringing buyers and sellers TOGETHER and getting compensated for it by the seller and/or buyer. You are not getting compensated by either of them. You are making a PROFIT when YOU sell it from you to your buyer, acting as a principle. Not an agent!