Consumer Protection Bill Passes on House Floor

Frankfort, Kentucky – Last week, the House passed HB 62, sponsored by Representative David Meade, a consumer protection bill designed to require real estate wholesalers, who advertise properties for sale, to fall under the same rules, regulations, and oversight as other real estate agents in order to create transparency and accountability.

“There is a current lack of accountability for real estate wholesalers which can create a multitude of problems for the property owner. Not all wholesalers take advantage of consumers but there are some that do, which is why we need to place regulations on wholesalers,” said Meade, “It is important we protect consumers, because these wholesalers can take advantage of those who may not understand property values. My goal with this legislation is to protect those who are looking to sell their property, and ensure that those who are selling it have the right credentials.”

Wholesaling is when a wholesaler enters a contract with a property owner, and the wholesaler then advertises that contract to buyers in the same manner a licensed real estate agent would. The buyer agrees to pay a higher sale price than the contracted price. The wholesaler then assigns and sells that contract to a buyer at an even higher price with the difference being paid to the wholesaler. If that contract falls through, the wholesaler can walk away, leaving the property owner stuck in the process since there is no accountability and transparency. By requiring these people to hold a Kentucky-issued real estate license, we give the real estate commission authority over their actions and protect consumers looking to sell their property.

For more information about this legislation please visit legislature.ky.gov