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socrateaser
socrateaser, Attorney
Category: Business Law
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Experience:  Retired (mostly)
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Great. Thanks again. My next question has to do with the

Resolved Question:

Great. Thanks again.

My next question has to do with the way in which I represent myself as a buyer. I want to form an LLC and have the company as the buyer and I would be the manager of the LLC with no other members (in order to limit my personal liability). Would I still be able to perform the same activities we discussed previously?

Thanks,

Jake.
Submitted: 1 year ago.
Category: Business Law
Expert:  socrateaser replied 1 year ago.
An LLC can purchase real property for its own use without hiring a real estate agent to do so. And, an LLC can sell its own real property -- or assign a purchase option agreement -- which is what you're actually doing. However, the issue arises as to whether or not a pattern of repeated conduct is merely an artifice to avoid the provisions of the Florida Real Estate Licensure laws. An LLC under which a licensee practices the real estate broker profession must be licensed by the Commission. Fla. Stat. 475.15.

This is a tough call. In my opinion, as long as you are entering into contracts where you or your LLC is legally obligated to purchase the property, then the LLC can conduct the transactions as both buyer and seller. However, Fla. Stat. 475.011(2) requires that the person who conducts the actual transactions must be a licensed real estate professional, if the LLC is not licensed as a real estate broker firm. In this scenario, you would be representing the LLC in the transactions, rather than either buyers or sellers in the overall transaction. Again, the critical factor here is that the LLC must be absolutely liable under the contract to purchase the property, such that it cannot escape through any contractual device, other than due to a breach or fraud/mistake by a counterparty.

Fla. Stat. 475.01(a)(1) defines "broker" as a person who acts "for another." So, it's a must that the LLC is acting for itself, and that you as the LLC's agent are acting for the LLC.

This raises another collateral issue. If you are employed by a different real estate broker, and you are representing the LLC under your license, then you would owe a commission to your broker for handling the LLC's deals. I don't see any way for you to avoid this result, unless the LLC were to hire someone and pay them wages/salary (not commissions), to handle the transactions. Because if you handle the transactions yourself, then you are getting a profit based upon each individual transaction from the LLC -- that means you must be acting as a licensed real estate broker, and it further means you must either be the principal broker for your own business, or you are liable to your current principal broker for your agreed upon commission deal.

Hope this helps.
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 34096
Experience: Retired (mostly)
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