Wholesaling in Ohio: What Real Estate Professionals Need to Know About SB 155 

In the July 24 webinar, Wholesaling: Where Are We Now?, hosted by Hondros College, Anne Petit didn’t mince words: “We in the industry are going to have to work really hard to help get the word out.” 

With wholesalers operating both within and outside of state lines, often without oversight or transparency, the need for clear legislation and consumer education has reached a boiling point. Senate Bill 155 and its identical twin, House Bill 287, aim to address that gap. 

This wasn’t a high-level policy chat. It was a straight-talking, detail-rich session that pulled back the curtain on a fast-growing (and controversial) area of Ohio real estate. 

Why SB 155 Exists (And What It Does) 

According to Anne Petit: “This is about consumer protection.” 

SB 155 creates a new section in Ohio Revised Code (5301.95) that focuses exclusively on wholesaling. The bill defines wholesalers, outlines disclosure requirements, and establishes enforcement mechanisms. 

Key provisions: 

• Applies only to 1-4 unit residential properties 

• Targets those entering assignable or novated contracts for profit 

• Requires a written disclosure, in bold and at least 12-pt font, acknowledging: 

• The wholesaler does not represent the seller 

• The wholesaler intends to resell the contract to a third party 

Anne was clear: “If you run across a potential seller who says, ‘Oh well, I’ve already signed a contract with so-and-so,’ and they’re not a licensee, you might want to go back and ask if that owner of record has received this very specific disclosure.” 

What the Disclosure Must Include 

As explained during the webinar, the proposed disclosure language is very specific. It must appear in bold font, not less than 12 points in size, and clearly state: 

“Ohio law requires a wholesaler acting as a grantee, before entering into a contract or agreement that conveys an interest in residential real property, to provide certain information to the record owner in a conspicuous manner printed in boldface type in a font size not less than twelve points. Failure by a wholesaler to present or complete this form is an unfair or deceptive act or practice. Any person who enters into an agreement that conveys an interest in residential real property to a wholesaler acting as a grantee without receiving this disclosure has a cause of action against the wholesaler. A wholesaler acting as a grantee is prohibited from entering into a binding contract to acquire an interest in residential real property unless this statement is signed and dated by the record owner of the property. The owner acknowledges that the person presenting this document is a wholesaler, as defined by section 5301.95 of the Revised Code, and that the owner is advised to seek legal advice before entering into any agreement or contract with the wholesaler. A wholesaler is acting on the wholesaler’s own behalf and does not represent the owner in this transaction. A wholesaler enters assignable contracts with owners and seeks to sell or assign the wholesaler’s interest for a profit. The wholesaler may assign the wholesaler’s interest in the purchase contract to a third party without the owner’s consent before closing. The wholesaler may charge a fee to the third-party buyer separately for profit. The agreed purchase price between the owner and wholesaler may be below market value and is conveyed voluntarily.” 

Both the wholesaler and the seller must sign and date this disclosure for it to be valid. 

Misuse of Novation and MLS Access 

The discussion turned tactical when novation agreements came up. While novation is legal (substituting one party for another with the consent of all parties), Anne warned: “Some wholesalers are using novation as a loophole to get properties on the MLS. That novation is not necessarily being used properly.” 

She added: “If the original seller isn’t fully informed, we’ve got a problem.” 

She also noted that wholesalers “will do their best to get power of attorney” and might try to blur the line between POA and novation. 

Enforcement and Reporting: Who Handles What? 

Anne broke it down: 

• If it’s a licensee advertising improperly or failing to disclose? Contact the Ohio Division of Real Estate (ODRE). The ODRE also has statutory authority to investigate active licensees 

• The ODRE also has authority to investigate unlicensed activity, which in wholesaling would be improper advertising of an assignable contract. People with an inactive, suspended or revoked license are also considered “unlicensed”. 

• If it’s a wholesaler failing to provide proper disclosure? File with the Ohio Attorney General’s Office under the Consumer Sales Practices Act (CSPA). 

• If you’re a REALTOR®, you may also be subject to complaints through your local board if a Code of Ethics violation is suspected. 

“The division is not going to have anything to do with licensing or registering wholesalers,” she emphasized. She also clarified that current law already prohibits unlicensed advertising: “Even photos, an address, the number of bedrooms— no. Absolutely not.” 

She also clarified that current law already prohibits unlicensed advertising: “Even photos, an address, the number of bedrooms— no. Absolutely not.” 

Common Questions and Clear Answers 

Q: Will title companies be required to verify disclosure compliance? 

No. “There is no language in the current version of SB 155 requiring title companies to ensure that disclosure has been provided, dated, and signed.”  

However, title insurers are regulated by the Ohio Department of Insurance (ODI). Any suspected misconduct should be reported directly to ODI. 

Q: Why has the legislature resisted requiring licensure or registration for wholesalers? 

“There are members of the Ohio General Assembly who are concerned that any new or enhanced registration, licensing or certification requirements may be a barrier to entry,” said Anne. “It’s been extremely difficult to get any new requirement introduced and passed.” 

Q: Are wholesalers even aware their advertising might be illegal? 

“It’s impossible to quantify the number of wholesalers operating in Ohio. Reaching that unknown universe to educate them is nearly impossible,” Anne acknowledged. “Consumer education is going to be equally, if not more, critical to ensure compliance.” 

Q: Can licensees purchase from wholesalers? Are there any required disclosures? 

Yes. “It is legal for you to take an assignable contract on real property,” Anne said. “In the current version of the bill, there are no disclosures that are required to be made by you, as a buyer.”  

However, licensees are encouraged to ask wholesalers for proof of disclosure to sellers. 

Q: What if the seller didn’t fully understand a novation agreement? 

“Informed consent in these cases is a very big deal,” Anne emphasized. “If you believe that a novation has been signed under duress and/or deceptively, reach out to the MLS (if it’s listed) or contact the AGO.” 

Q: Can wholesalers advertise in closed online groups? 

“It depends on who can access the group,” Anne said. “If licensees or the public can reasonably gain access, it may rise to the level of public marketing. Contact ODRE counsel to evaluate specific situations.” 

Q: Are brokerages in Ohio currently accepting wholesaler transactions? 

Anne said: “Several of the largest brokerages in Ohio permit involvement with wholesalers at some level. Some believe agents can engage in wholesaling directly, while others limit involvement to buyer representation.” 

Q: Has the Division engaged directly with wholesaler/investor groups in the past? 

Yes. “The ODRE has historically been as proactive as possible in sharing information,” Anne noted. “We did a video with the Ohio Real Estate Investors group on properly wholesaling that is still available on YouTube.” 

Why Isn’t Licensure Required? 

Attendees wanted to know: why stop at disclosure? Why not require wholesalers to be licensed? 

Anne answered candidly: “It is not the appetite of the Ohio legislature to add further burdens or barriers to people who want to engage in real property transactions.” 

She continued: “We’re lucky they require any licensing at this point.” 

Tina Lapp added: “We saw it with legislation last year removing even for licensure for real estate, reducing the hours… and we saw it for several other professions as well.” 

Why This Matters for Agents 

The concern in the chat was palpable. Anne acknowledged it: “How are we going to get this information to the people who are doing it? We don’t even know who they are.” 

She continued: “Consumers are going to continue to be confused until and unless we saturate the public with education.” 

She also shared this cautionary note for licensees: “If you ever think that you can and want to [wholesale], you need to speak to your principal broker about it, get their blessing, and run those transactions through the brokerage.” 

What’s Next for SB 155? 

SB 155 passed the Ohio Senate and has moved to the House Development Committee. Anne expects some delays: “I would be shocked if we have something done by the end of the year, but I hope I’m shocked.” 

Tina reminded attendees: “The real estate community would like some more teeth to it… but this is progress.” 

In the meantime, real estate professionals can: 

• Read the full proposed language in ORC 5301.95 

• Contact Ohio REALTORS if interested in submitting testimony 

• Educate clients, especially vulnerable populations, on wholesaling risks 

• Report violators through ODRE or the Attorney General’s Consumer Complaint Portal 

• Download the ODRE License Law Complaint Form (PDF) 

Catch the Webinar Replay 

Get the full legal breakdown and Q&A from former Superintendent Anne Petit, with Tina Lapp moderating. These insights are a must-watch for any Ohio licensee navigating wholesaling concerns. 

Watch the Wholesaling Webinar Replay