Real Estate brokerage Licence required to offer Rent to own deals?

[Joel]

Hi,



Is a real estate brokerage licence required in order to be able to charge a fee from the investor when putting together a RTO deal? I was told that since it is like a brokerage involving the sale of a property its considered as Real Estate Brokerage.



Professionals, what do you know about this?

 

[Sherilynn]

To the best of my knowledge, a license could be required if the "finder" of the deal is selling or assigning the deal to someone else for a fee. (So this applies if the finder does not retain any ownership interest).



If the "finder" has any ownership in the deal (either legal or beneficial through a JV), then no license is required. So one could construct an RTO deal and then find a money partner for a JV. One could then charge a "finder's fee" in addition to having a share of the deal itself.

 

[Joel]

Thanks Sherilynn. Is the same said for a fee charged to the tenant/buyer? Test

 

[Thomas Beyer]

As you have a beneficial interest in the property there is no licensing requirement for selling, assigning or managing. Only if you sell properties that you do not have a beneficial interest in do you require a license, say selling my property or managing it.

 

[Joel]

Thanks Thomas for your great advice!

 

[Sherilynn]

[quote user=Joel] Thanks Sherilynn. Is the same said for a fee charged to the tenant/buyer?




We don't charge fees to tenant buyers until they exercise their options. Then there is an "exercise of option fee." Since we have beneficial interest in the property and an option contract with the tenant buyer, this falls under contract law and not RECA.