Anti-wholesalers law in Illinois.

8 Replies

@John Thedford I'm not sure how your comment helps the person that posted this question or how it's even applicable given that you're in florida and not illinois. 

@John Meza the Chicagoland Investor Empowerment Series meetup had a meeting about this last night. Joe and Dan actually had a conversation (that was recorded) with the sponsoring senator and other people involved in the passing of the new law.  It was very beneficial and learned a lot. However, it is difficult to know for sure how the law will be interpreted by the courts and how it will be enforced.  I'd definitely recommend setting up a meeting with your attorney.  Good luck.

Originally posted by @Zoran Stanoev :

@John Thedford I'm not sure how your comment helps the person that posted this question or how it's even applicable given that you're in florida and not illinois. 

@John Meza the Chicagoland Investor Empowerment Series meetup had a meeting about this last night. Joe and Dan actually had a conversation (that was recorded) with the sponsoring senator and other people involved in the passing of the new law.  It was very beneficial and learned a lot. However, it is difficult to know for sure how the law will be interpreted by the courts and how it will be enforced.  I'd definitely recommend setting up a meeting with your attorney.  Good luck.

Zoran can you further elaborate on the presentation.. the WhY's the whos and the whats ? Why did they do this.. was it some sort of consumer fraud protection IE they feel they needed to protect the public.. was it the NAR lobbying.. Just curious.. I know in Oregon our state already takes the position that wholesaling the way 99% of those do it is not legal .. so no law needs to change.. that would be helpful to others in your state that do this.. One guy I Known Fernando is already blasting on social media come work for his real estate company and be compliant..

 

@Jay Hinrichs sure thing.  here goes...

protecting the consumer (sellers) from "de facto brokerages" was the main reason for the new law. licensees have to make certain disclosures that unlicensed wholesalers don't and the Realtors Assoc does not like this. they made a comment along the lines of, "we want a licensee in every transaction." They also don't like the fact that a wholesaler holds themselves out to be a buyer, but has no intention of actually buying the property or the funds to actually close. 

They pointed out that the change was not made as a new section that prohibits or bans wholesaling.  rather, the new law was included as part of the definition of what constitutes activities that fall under the purview of a broker. 

I've heard numerous ideas or strategies for how to circumvent or not fall within the new law. Some are very creative, but personally, i'd be very suspect to work with any brokerage or person stating with confidence that they have found a work around. in my opinion, unless you're licensed, you can't be sure. I think there's a lot of broad language in the act and an argument can be made that all of the new ideas and strategies violate the new law. 

The people on the call made the law and although they can and did kinda guess how it will be enforced, until the issue is before a judge, you can't be sure how it'll be applied. 

Hello Jay Hinrrichs, Zoran Stranoev and John Thedford. Thank you for your responses. I appreciate your insight on this issue. If anything, I might have to bring in a broker and make him/her an officer in my corp.

Originally posted by @John Meza :

Hello Jay Hinrrichs, Zoran Stranoev and John Thedford. Thank you for your responses. I appreciate your insight on this issue. If anything, I might have to bring in a broker and make him/her an officer in my corp.

If you do that, you'll also likely need to be licensed. A "person" can be a corporation so if the corporation is set up to engage in the business of wholesaling, all members will need to be licensed.  Make sure you talk to your attorney.