Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Real Estate Disclosure topic
No spam. Unsubscribe anytime.
Senate committee rejects bill requiring wholesalers to disclose they do not yet hold title
Summary
A proposed Arkansas consumer‑protection law would have required real‑estate wholesalers to disclose in writing that they are wholesalers and may not be able to convey title; the committee rejected the proposal after extended debate over market effects and when disclosure should be required.
Senator Clint Penzo presented a bill clarifying exemptions to real‑estate licensure and creating an Arkansas Real Estate Wholesale Consumer Protection Act requiring wholesalers to disclose in writing to sellers or buyers that they are wholesalers and may not be able to convey title. The sponsor said failure to disclose would entitle the seller or buyer to terminate the contract before closing and described disclosure and earnest‑money remedies.
Committee members and stakeholders debated whether disclosure should be required to the original seller (raising concerns about undermining negotiated contracts and revealing market strategy) or only to buyers who may be asked to pay earnest money on a contract the wholesaler does not own. Critics raised several scenarios (including rural sellers and "granny" situations) where a non‑sophisticated seller could be disadvantaged without explicit protections. Supporters argued the change is targeted consumer protection to prevent misleading use of contracts for sale.
After extended discussion about scope, timing and enforcement mechanics, the committee voted and the chair announced "The no's have it," indicating the bill failed to pass the committee.
