Senate panel advances bill to require disclosure and short rescission window for home wholesalers

Representative Abare introduced HB 4 68 to regulate wholesaling of residential real property by requiring transparency and a short rescission period. The author described wholesaling as contracts where sellers do not know the buyer intends to assign the contract; the bill would require a disclosure and allow a seller to cancel within five days.

The sponsor outlined three concessions reached with industry stakeholders: shortening a rescission period from 14 to 5 days, guaranteeing deposit returns if the seller cancels within the rescission period, and clarifying that once a wholesaler closes on a property normal disclosure obligations associated with ownership apply. "We went from a 14 day rescission period to 5," the sponsor said, adding that wholesalers the author consulted with agreed to the language.

Senator Morris pressed the sponsor on accidental or one-off transactions and asked how the measure would avoid ensnaring ordinary sellers. The sponsor said the bill does not eliminate assignability and that sellers would remain protected by existing contract law when an assignable buyer fails to perform. Several real-estate and realtor groups filed cards in support. The committee adopted the amendment package (at 2743) and reported the bill favorably.

What happens next: HB 4 68 is reported favorably with amendments; sponsors said they will continue to discuss implementation details with senators who requested further study.