I had a "For Sale" sign in the front yard of a house that I have a contract to purchase on with the seller. I got a call from the Florida Department of Real Estate informing me that since I do not hold a real estate license and because I am not the owner of the house I cannot market the property for sale.
I explained that I have an equitable interest in the property in the form of a contract for sale and purchase however they maintained I must remove the sign or face felony charges. Has this ever happened to anyone else?
The BiggerPockets community has had this discussion several times. The state of Florida, like Ohio, has decided to strictly enforce their state laws regarding 'brokerage'. In Florida, the text is here: http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0475/0475.html
The key wording in 475.01 (1)(a) is "... the real property of another..." Your sign is in front of another person's real property.
Other states are not as prohibitive. In NC, the wording is slightly different in that the word "real" is not present in the exemption part of the NC statute. In NC, the exemption wording is "Any individual owner who personally leases or sells the owner's own property". Interest in an LLC, for instance, like a contract... is personal property.
Probably a good idea to take down the sign.
Here is how you solve the problem: close on the property. After closing, put a "For Sale" sign in the front yard. Are you prepared to close? Have you led the owner to believe he has a solid contract? These are some of the issues I have with so-called "wholesalers". Signing contracts while misleading the homeowner and simply walking away when you cannot get an end buyer is a terrible thing to do to someone. Changing your mind at the counter at McDonalds (or realizing your were not really THAT hungry) and walking away does not impact people's lives. Misleading an owner, having the property pulled off the market, giving false hopes, etc is a different story.
Well, now we know. You can put up a sign Equitable Interest For sale, or Purchase Contract For Sale, but apparently not House For Sale.
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