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Are back-to-back closings where B to C closing funds A to B closing legal in Illinois? If not, where is this stated in the law?
Anonymous2 views4 answers
I would like to do back-to-back closings, double closings, or simultaneous closings in Illinois. I would like to fund my A to B closing transactions, by first closings with B to C closing and using these funds to fund A to B in real estate investing deals. I have been told this is illegal, but cannot find any where in the Illinois Real Estate Law or Statues that it is illegal. If it is illegal, point out in the law where it is specifically stated it is illegal and provide a link to the statue or law. If double closings are illegal in Illinois, there should be somewhere in the law where this is stated clearly and distinctly, so there is no error or confusion about what is legal or illegal concerning double closing. Provide the law or statue where double closings are illegal in Illinois.
What you propose is illegal at both federal and state levels. Rather than asking the volunteer attorneys here to do your legal homework, which is not the purpose of this Q&A forum, you should sit down and spend some time with a knowledgeable real estate attorney who will give you proper guidance and direction at the level of detail you request.
How can you re-sell something you don't own in the first place. Just think about it logically and you will understand. Ms. Goldstein is right on the money. Stop trying to figure out how to do what you propose as this is at least the second time this has been asked, and do the right thing. Get legal help or you will get in trouble.
I agree with the earlier answers mainly in their suggestion that an appropriate and reliable answer will need to be provided by an attorney paid to advise you. There may be ways to accomplish what you are suggesting, but you would have to be taking the investment risk to avoid this being strictly a scheme to act like a real estate agent without being licensed. In other words, if your A to B contract is only binding if B to C proceeds, then you are really acting as a broker. Some of the things for an attorney to review would be: whether there are specific laws that address this situation (including real estate broker/agent licensing laws and regulations); whether there is any advantage in using an installment agreement for the A to B transaction; and whether B's interest as a buyer can simply be legally sold to C to complete the transaction (many contracts have provisions for a buyer to provide a nominee or to assign the contract or such provisions can be negotiated in). Again, seek proper legal advice.
Yes, it is fraud. Regarding your additional information, you will not find the answer in the consumer fraud act, but in the real estate license act. Hire a reputable attorney to guide you through this. The penalties for getting it wrong are rather severe.
