Legally speaking: Can I market a home for sale before the owner actually owns it?
On October 27, 2014
By Peg Ritenour, OAR Vice President of Legal Services/Administration
The OAR Legal Assistance Hotline receives an array of real estate-related legal questions — including license law issues, disclosure, contract law, ethics and commission problems, among others. In an effort to help you work within the law, our “Legally Speaking” series spotlights some of the timely questions that are being asked by REALTORS. This one involves when you can begin marketing a property for sale…
Q: I represent an investor who entered into a contract to purchase a foreclosure property that he plans to flip after making some repairs. Although he won’t be closing on it for a few weeks, my investor wants me to start marketing the property now. Can I do that since he doesn’t own it yet?
A: Ohio license law contains two specific provisions that address this scenario. First, Ohio Revised Code Section 4735.18 provides that it is a viloation of the license law for a licensee to offer property for sale or lease without the knowledge and consent of the owner or the owner’s authorized agent. Further, this same section also specifically prohibits a licensee from placing a for sale sign on a property or otherwise marketing it without the consent of the owner or the owner’s agent.
Based upon these provisions, the Ohio Division of Real Estate and Professional Licensing takes the postion that in order for you to begin marketing this property for your investor client before he acquires title, you would need the consent of the current owner of the property or his authorized agent. For your protection that consent should be obtained in writing.
Additionally, if the owner does give such consent for you to begin marketing the property for your investor client before closing, you should be clear in dealings with any interested buyers or their agents that your investor client does not yet have title to the property and any purchase contract he enters into should be contingent upon him acquiring such title.
Tags: legal, Legally Speaking