Off-Market Property Goes on Market, is a Contract Still Enforceable?

[quincy]

Scheduling the walkthroughs...

Telling a buyer about a seller is not illegal (and vice versa), and connecting one with the other is not illegal. Scheduling a walk-through is an administrative task and does not require a license.

But the solicitation of buyers and sellers is admittedly problematic.

CalBayArea should speak with a California attorney to go over his business operation so it is made clear to him what he can and cannot do legally.

I am not really sure how he is locating buyers and sellers.

 

[Zigner]

Telling a buyer about a seller is not illegal (and vice versa), and connecting one with the other is not illegal. Scheduling a walk-through is an administrative task and does not require a license.

I agree with the first two, but anything beyond that does require a license. Scheduling a walk-through is beyond that.

CalBayArea should speak with a California attorney to go over his business operation so it is made clear to him what he can and cannot do legally.

Agreed.

 

[quincy]

I agree with the first two, but anything beyond that does require a license. Scheduling a walk-through is beyond that.


Agreed.

Scheduling walk throughs is done by unlicensed office assistants in real estate offices so that should not be a problem.

 

[Zigner]

Scheduling walk throughs is done by unlicensed office assistants in real estate offices so that should not be a problem.

On behalf of and at the direction of the agent...

 

[quincy]

On behalf of and at the direction of the agent...

The point is that it does not require a license, even in a real estate office.

 

[Zigner]

The point is that it does not require a license, even in a real estate office.

I disagree - but that's ok

 

[quincy]

I disagree - but that's ok

Yes, we are probably not going to totally agree on this - and I am okay with that, too.

You and justalayman have certainly pointed out problems I did not consider at first, and I am considering them now. CalBayArea should be doing the same.

 

[PayrollHRGuy]

Forget the walk through and everything else. The OP is hooking up buyers and sellers for and getting paid for it. He should be licensed.

 

[quincy]

Forget the walk through and everything else. The OP is hooking up buyers and sellers for and getting paid for it. He should be licensed.

California jury instructions on fiduciary duty: https://www.justia.com/trials-litigation/docs/caci/4100/4100.html

California jury instructions on Duty of Disclosure by Real Estate Broker to Client: https://www.justia.com/trials-litigation/docs/caci/4100/4107.html

I do not see a clear client relationship.

I do not see clearly that a license is required for what CalBayArea is doing.

And the issue is that CalBayArea is NOT getting paid ... hence his question here.


(I do not have any connection with nor do I endorse any attorneys who advertise on the Justia site)

 

[justalayman]

California jury instructions on fiduciary duty: https://www.justia.com/trials-litigation/docs/caci/4100/4100.html

I do not see clearly that a license is required for what CalBayArea is doing.

And the issue is that CalBayArea is NOT getting paid ... hence his question here.

Still? Even after the disclosure of providing various documents to either party in an attempt to facilitate the sale?


As to not getting paid; the Law says:



Section 10131 of the Code requires the licensure in California of a person who, for a compensation or in expectation of compensation, regardless of the form or the time of payment, does or negotiates to do one or more of the following acts for another or others:

solicits prospective sellers or purchasers of, or negotiates the purchase, sale or exchange of real property or a business opportunity.

EXPECTATION OF COMPENSATION. Op obviously expects payment. That’s what the thread is about.


How do you not see what the op has specifically admitted to (let alone the actions alluded to) as now being solicitation? I’ve seen guys arrested with less evidence for soliciting a hooker.

Whether there are ficuciary concerns or not is not relevant to the need for licensure. His acts alone create the need

Here is a decent article on the subject;

http://journal.firsttuesday.us/finders-a-nonlicensee-referral-service-2/1168/

You should be able to see the admditted acts exceed the allowed activities of an unlicensed party expecting payment for their services

Excerpt;

A finder may not:
take part in any negotiations [Bus & P C §10131(a)];
discuss the price;
discuss the property; or
discuss the terms or conditions of the transaction. [Spielberg v. Granz (1960) 185 CA2d 283]

op admittedly discusses the property and alluded to discussing price. Those are both verboten.

 

[quincy]

Still? Even after the disclosure of providing various documents to either party in an attempt to facilitate the sale?


As to not getting paid; the Law says:



Section 10131 of the Code requires the licensure in California of a person who, for a compensation or in expectation of compensation, regardless of the form or the time of payment, does or negotiates to do one or more of the following acts for another or others:

solicits prospective sellers or purchasers of, or negotiates the purchase, sale or exchange of real property or a business opportunity.

EXPECTATION OF COMPENSATION. Op obviously expects payment. That’s what the thread is about.


How do you not see what the op has specifically admitted to (let alone the actions alluded to) as now being solicitation? I’ve seen guys arrested with less evidence for soliciting a hooker.

Whether there are ficuciary concerns or not is not relevant to the need for licensure. His acts alone create the need

Here is a decent article on the subject;

http://journal.firsttuesday.us/finders-a-nonlicensee-referral-service-2/1168/

You should be able to see the admditted acts exceed the allowed activities of an unlicensed party expecting payment for their services

Excerpt;

op admittedly discusses the property and alluded to discussing price. Those are both verboten.

I am not disregarding what you and Zigner are saying. Really I'm not.

I have reread CalBayArea's posts more than once. He could very well be pushing limits but I do not know if he has exceeded the limits of what he can do without a license. You and Zigner think that he has and you could be right.

CalBayArea should locate an attorney in his area for a personal review. He will want to do this before confronting the buyer, to make sure he is not on the legally shaky ground you and Zigner believe he is on.

 

[CalBayArea2]

Interesting. I am not reluctant to agree, perhaps your right. I don't know what to say, haven't had an issue before.
So it sounds like based on what you pasted above, if I myself was offering to buy the property, it's legal? But because I am referring them off to someone else (making a connection), that's the part that makes it illegal?


But even if I was buying it myself, isn't that still "soliciting a prospective seller" ?

I know countless successful investors and developers that buy privately off-market, directly from sellers frequently. I guess it's just not a problem until it is.....

 

[justalayman]

But even if I was buying it myself, isn't that still "soliciting a prospective seller" ?

Now I know you’re playing games with the law. I have posted the germane section of the law several times and specifically pointed out:

Solicits for compensation or expectation of compensation.

If you’re doing it for yourself (you buy the property and take title), the law is irrelevent.

I know countless successful investors and developers that buy privately off-market, directly from sellers frequently. I guess it's just not a problem until it is.....

But that isn’t what you’re saying you’re doing. There is nothing improper for a buyer to solicit a seller or vice versa. You are neither buyer nor seller. You are not even simply referring a seller to a buyer or vice versa and you are not referring the principals to a real estate broker. You are acting as a broker. That requires a license.

But because I am referring them off to someone else (making a connection), that's the part that makes it illegal?

that’s not what I said at all. There is a legal activity where one can be paid a finders fee. If that was all you were doing you would be in the clear. You have clearly stated you are going well beyond that. The transfer of the reports and what not is one example of what you are not allowed to do.

You are allowed to introduce the parties or refer them to a party thatvis legally allowed to be involved in the sales process. That is pretty much it. You can’t transfer information about the properties to the other party (soliciting the sale) You can’t discuss price (negotiations) You just can’t do what you are.

 

[quincy]

Interesting. I am not reluctant to agree, perhaps your right. I don't know what to say, haven't had an issue before.
So it sounds like based on what you pasted above, if I myself was offering to buy the property, it's legal? But because I am referring them off to someone else (making a connection), that's the part that makes it illegal?


But even if I was buying it myself, isn't that still "soliciting a prospective seller" ?

I know countless successful investors and developers that buy privately off-market, directly from sellers frequently. I guess it's just not a problem until it is.....

Legal until you are caught, maybe.

Following is yet another link, this to the National Association of Realtors, on state by state regulations for unlicensed assistants, which is what you appear most closely to be. Click on California to see the areas that might be of most concern to you.

https://www.nar.realtor/being-a-realtor/personal-assistants/state-statutes-and-regulations-for-unlicensed-assistants

Your scheduling a walk-through should not be a problem. You showing the property IS a problem. Providing information on the property IS a problem. Soliciting buyers or sellers IS a problem ...

You can perhaps tell on your own what you are currently doing that requires a license. I recommend again that you speak to an attorney in your area to see if your business can survive - and, if is determined that it can, how to move forward with it without violating the law.

Good luck.

 

[justalayman]

Legal until you are caught, maybe.

Following is yet another link, this to the National Association of Realtors, on state by state regulations for unlicensed assistants, which is what you appear most closely to be. Click on California to see the areas that might be of most concern to you.

https://www.nar.realtor/being-a-realtor/personal-assistants/state-statutes-and-regulations-for-unlicensed-assistants

Your scheduling a walk-through should not be a problem. You showing the property IS a problem. Providing information on the property IS a problem. Soliciting buyers or sellers IS a problem ...

You can perhaps tell on your own what you are currently doing that requires a license. I recommend again that you speak to an attorney in your area to see if your business can survive - and, if is determined that it can, how to move forward with it without violating the law.

Good luck.

There is a huge difference between an unlicensed assistant who is acting on behalf of a licensed broker and what the op is doing. The unlicensed assistant is an employee of the broker and is not being compensated For their activities of soliciting a buyer or seller.

In the most basic terms; op gets to make the parties known to each other


After that he walks away. Scheduling a walk through is part of soliciting a sale.