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socrateaser
socrateaser, Attorney
Category: Business Law
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Experience:  Retired (mostly)
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Really great info thanks. Let me see if I understand this correctly.

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Really great info thanks. Let me see if I understand this correctly. It is ok for me to act as an agent (meaning agent of the LLC not a RE agent) in order to buy and sell real estate including purchase option contracts. Where the problem may arise is if a pattern exists where is appears that the purpose of the LLC is to circumvent the Real Estate Licensing laws, in which case a licensed broker must handle those transactions. Then, if I were to handle those transactions myself I would owe my principle broker a commission. Or, I could have a salaried employee the handle the transactions. Is that about right?

Also, what do you think about this situation? What if I were the managing agent for an LLC whose principle business is not buying and selling real estate but some other business, let's say landscaping, but regularly conducts real estate transactions, as a means to diversify the business and avoid risk. Would I then be able to act as the LLC's managing agent in a non-brokerage relationship with either the seller, buyer (LLC), or assignee? What do you think?

Thanks,

Jake.

Really great info thanks. Let me see if I understand this correctly. It is ok for me to act as an agent (meaning agent of the LLC not a RE agent) in order to buy and sell real estate including purchase option contracts. Where the problem may arise is if a pattern exists where is appears that the purpose of the LLC is to circumvent the Real Estate Licensing laws, in which case a licensed broker must handle those transactions. Then, if I were to handle those transactions myself I would owe my principle broker a commission. Or, I could have a salaried employee the handle the transactions. Is that about right?

A: Yes.

Also, what do you think about this situation? What if I were the managing agent for an LLC whose principle business is not buying and selling real estate but some other business, let's say landscaping, but regularly conducts real estate transactions, as a means to diversify the business and avoid risk. Would I then be able to act as the LLC's managing agent in a non-brokerage relationship with either the seller, buyer (LLC), or assignee? What do you think?

A: Section 475.011 permits an LLC to purchase and sell its own properties, except, "if and to the extent that an agent, employee, or independent contractor paid a commission or other compensation strictly on a transactional basis is employed to make sales, exchanges, or leases to or with customers in the ordinary course of an owner’s business of selling, exchanging, or leasing real property to the public."

 

If you are paid on a transactional basis from the business to buy or sell real estate, then you're an agent and you would have a conflict of interest between your broker and the LLC for the commissions related to the transactions. The other LLC business notwithstanding.

Hope this helps.

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