As an investor that flips houses, if i get my real estate license in california. Would i have to disclose to sellers in california that i indeed have my real estate license? Even though I'm not under a broker. Also when i advertise and throw flyers do i have to put my BRE license number.
Everyone i talk to has their own opinion. I even called the BRE and the enforcement office in SoCal told me i didn't have to disclose that i had my license and the enforcement office in LA told me that i did. Help! haha
I don't know CA law...but in Florida if your license is "active" you must disclose. If your license is in an "inactive" status no disclosure necessary. You might need to clarify the status of your license (if differences exist in CA) to get the same answer from two different government bodies.
In Ohio, your license belongs to the broker. You, as a realtor, do not exist unless affiliated with a broker. Is it different in your State?
I would say that you should always disclose you are a licensed individual in all offers vis a vie a paragraph in an addendum. As a brokerage company entrepreneur I've always instituted a mandatory indemnity paragraph requirement for all of our agents. We use a standardized disclosure template that is attached to all sale and lease offers as a disclosure addendum.
As a licensed salesperson in CA you cannot conduct business unless your license is hanging with a broker. However, its not whether you can or cannot conduct business as a real estate professional that could or would cause a problem rather its that you have been deemed to 'be' and have been trained to conduct your affairs as a real estate professional that would come into question should you encounter a sue happy seller or buyer.
The disclosure removes any question of an ethics violation from later being used by someone in a court of law.
Concerning the advertising of investment activities, if your license isn't hanging with a brokerage then I would not consider it a violating offense by not having your license listed on any collateral material. If you intend on wholesaling deals I would then advise you to include license information in any and all advertisements.
Frankly, I'm not fully informed on court cases surrounding wholesaling. While I'm not opposed to wholesaling in general I do think that a licensed individual operating in the capacity of a principal that assigns a contract could potentially be viewed by a court of law to have brokered a transaction instead of having been the principal since they didn't actually go on title.
An issue might only arise where a problem existed, and they are common in real estate transactions, and the party feeling pain is looking for some recourse. As a licensed individual should you not have disclosed it might give the OP's attorney a wedge to substantiate some of their other claims, and foster the view that the non disclosure is/was a precedent to you withholding actual facts concerning the property/transaction.
I would highly recommend a licensed individual consider including a disclosure of the license in any offers, and if wholesaling in any wholesaling offering.
As a licensee in CA that is not actively working as an agent I simply add a statement to the purchase contract which reads "Buyer holds a real estate license and is buying property as a personal investment". That is what the legal department of my former company told me to include back when I was an agent buying my personal residence. I also was taught " when in doubt, disclose " so I still use it even though I'm no longer an agent.
*NOT LEGAL ADVICE, just my personal experience
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing