Updated about 18 years ago on . Most recent reply
Lawsuit Risks for Wholesalers
This question is based on the assumption that the great majority of real estate wholesalers (and other investors) are honest and well meaning, and therefore set up their deals to create win-win-win situations for sellers, end buyers and themselves. Even so, what are the top reasons wholesalers get sued by sellers, end buyers, or by lawyers representing sellers or end buyers? For example, can subtle technical errors in a contract, addendum, or assignment of contract result in a lawsuit against the wholesaler? If a wholesaler can not find a buyer, and thus opts out of a contract, will a liquidated damages clause truly protect the wholesaler from a seller? What steps should a wholesaler take to ensure a fair deal for all, and thus minimize lawsuits? Does BiggerPockets, or other general real estate sites, provide lists of expert real estate attorneys from across the country that one could arrange professional consultation with? Thanks, Dan.
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Jim,
Thanks for the link. I have a question.
I read the report twice. I am rather familiar with the PacTrust system. I have never directly used it but I have check the details a number of times.
The OH article implies there were 39 violations. Never once in the write up is there a specific reference to where the person stepped over the line. I am make a guess but I do not see anything specific.
It seems to be a violation of the license laws. Hence I expect we are talking about offering brokerage services without a license. Could it be that the issue was not a land trust and more along the lines of how the person represented themselves (offering a service to the seller for a fee contingent on the sale using a land trust)?
I was going to send an email to the OH regulator but they do not list an email address. I am not sure they will want to be explicit other than to cite the statute with the reader having to interpret.
As a licensed agent what is your take? What was the specific point at which the person crossed the line?
John Corey