Legislation would require license and background check, require wholesalers to inform homeowners of fair value and other resources before selling home
PHILADELPHIA – City Councilmember Allan Domb (At large) today introduced legislation that would provide protections to homeowners from solicitation and related problems by regulating the practices of residential property wholesalers.
The legislation amends the city’s code under Protections Against Unlawful Discrimination and establishes monitoring and enforcement regulations for businesses and individuals who might try to take advantage homeowners with quick cash payments or other enticements. The bill would require all entities to obtain a Residential Property Wholesaler License in order to conduct business in the city. A background check will be performed to determine if the applicant has not within the past six years been convicted of any crime of fraud, dishonesty, deceit or has violated ethics laws.
“The purpose of this bill is to protect homeowners from becoming victim to wholesale buying practices that have been occurring for far too long in some of our most vulnerable neighborhoods,” said Councilmember Domb. “The city needs to hold individuals and businesses accountable for their actions and ensure fair practices are in place at all times.”
Councilmember Domb continued, “Any agreement of sale entered into by a Residential Property Wholesaler who was not licensed at the time of the solicitation may be rescinded at any time prior to the transfer of the title.”
Residential Property Wholesalers will be prohibited from knowingly making false promises, untruthfully advertising or engaging in any conduct which demonstrates bad faith, dishonesty or untrustworthiness in the course of soliciting residential property.
The legislation will require wholesalers to inform the homeowner of how to access resources that assess the fair value of residential properties, such as the Philadelphia Office of Property Assessment’s website or any private real estate assessment tool. It will also require homeowners to be informed about their ability to hire a real estate agent, to seek counsel and identify any other resources deemed appropriate.
“By curbing the worse abuses in the residential wholesaling industry, this bill will ensure homeowners get a fair price for their property and help families build intergenerational wealth,” said Michael Froehlich, Managing Attorney, Community Legal Services. “It will also allow homeowners in rapidly gentrifying neighborhoods to opt-out of the aggressive solicitations from the ‘We Buy Houses’ companies.”
“Communities where homeowners are facing displacement from the rippling effects of redlining, deferred maintenance on an aging housing stock, and gentrification, already need relief,” said Tonnetta Graham, President of the Strawberry Mansion CDC. “With the onslaught of solicitations from the ‘We Buy Houses’ entities, the need has grown more pressing. While we are diligently working to inform residents of their preservation and/or sale options, we need this legislation to protect them from the targeted, aggressive, and predatory tactics and misleading practices employed to siphon them of valuable assets, their homes!”
In addition, the legislation would establish a “Do Not Solicit List” for property owners who have expressed a desire to not be solicited to sell or rent their real property. The list would be managed by the city’s Managing Director, or appointed Commission. Any property owner who appears on the Do Not Solicit List may request in writing that the city remove their name from the list at any time, which the city will have 30 days to complete the request.
“The work on this thoughtful legislation is a true collaborative effort of Community Legal Services, community stakeholders, Councilman Domb and his team, and the Greater Philadelphia Association of REALTORS (GPAR),” said Stephanie Biello, President, Greater Philadelphia Association of REALTORS. “We are proud and grateful to work with such committed partners. Once enacted, this legislation will increase consumer protections for property owners, preserve generational equity built through homeownership, give the City tools to combat predatory home purchasers, and raise the level of professionalism in the real estate community.”