SB1872 extends the repeal date of the Real Estate Licensing Act of 2000.
In this legislation is Section 1-10 (5), which takes away your right to represent yourself in a wholesale transaction.
The section reads:
"SB1872 Section 1-10 (5) Whether for another or themselves, engages in a pattern of business of buying, selling, offering to buy or sell, marketing for sale, exchanging, or otherwise dealing in contracts, including assignable contracts for the purchase or sale of, or options on real estate or improvements thereon. For purposes of this definition, an individual or entity will be found to have engaged in a pattern of business if the individual or entity by itself or with any combination of other individuals or entities, whether as partners or common owners in another entity, has engaged in one or more of these practices on 2 or more occasions in any 12-month period."
In their newsletter, the Illinois Association of REALTORS® writes,
"…in Section 1-10, the definition of “broker” has been amended to include the practice of “wholesaling” if done as a business model. Generally, “wholesaling” involves the practice of entering contracts to purchase property, then quickly assigning that contract to another buyer for a profit. When done as a business practice, “wholesaling” will now come under RELA’s enforcement provisions and the wholesaler will need a real estate broker’s license, as well as be subject to consumer protection provisions such as disclosure of self-interest and prohibition against dual agency."
Here's the problem with this change in law: When you are selling your contract, you are only representing yourself. With this law in place, you are limited in your ability to enter into an agreement representing yourself.
Here's one possible scenario: A rehabber buys houses to rehab. Through his advertising he gets more properties under contract than he can effectively deal with. Rather than default on the contracts, he sells off the excess contracts to other rehabbers. If he does this more than twice a year, he would need a broker's license.
Wholesalers do not represent the seller of the property. They are not paid by the seller. They owe no agency to the seller.
Wholesalers make a contract with the seller to buy the property. If a Wholesaler can sell their contract for a profit, they make a profit. If not, they need to perform on the contract themselves. They are not representing anyone except themselves. They (and you) should have the right to sell their rights in the contract without needing a broker's license.
Please call Governor Pritzker's office and ask for an amendatory veto, which eliminates this restriction on your rights.
Ask the Governor to eliminate Section 1-10 (5).
Please call 312-814-2121 or 217-782-0244 today. You may also voice your opinion on the Governor's web site. The time for action is NOW!
Don’t wait to act. This bill is awaiting the Governor's signature. If no action is taken, it will become law as written at the end of the month.
Thank you for your help on these urgent issues.