Land Trusts and the Practice of Law

[AndyRob76]

I am a real estate investor in California, focused on short sales (foreclosures). I've learned that some investors use land trusts as a way to conduct a simultaneous close on a short sale ("flip") without causing a title seasoning issue when they sell the property.

Here is my question: If I, as a non-attorney investor, prepare (and by prepare I mean filling in the blanks on already created by an attorney land trust docs) the land trust documents for a homeowner in foreclosure, would this be considered practicing law without a license?

If, in fact, it would be considered "practicing law w/o a license," then how do you set up land trusts for homeowners in foreclosure whose properties you plan to buy and flip?


Thanks,

Andy

[GetSmart]

Well in North Carolina things are different. If you are a principal in the transaction like a buyer or seller, you can prepare your own documents even write your own documents.

You might have to check with an attorney in your area that is experienced with creative investing.

According to our state law preparing documents for your own benefit is perfectly legal and companies do it all the time.

[TheShortSaleHouse]

I am a real estate investor in California, focused on short sales (foreclosures). I've learned that some investors use land trusts as a way to conduct a simultaneous close on a short sale ("flip") without causing a title seasoning issue when they sell the property.

Here is my question: If I, as a non-attorney investor, prepare (and by prepare I mean filling in the blanks on already created by an attorney land trust docs) the land trust documents for a homeowner in foreclosure, would this be considered practicing law without a license?

If, in fact, it would be considered "practicing law w/o a license," then how do you set up land trusts for homeowners in foreclosure whose properties you plan to buy and flip?


Thanks,

Andy

No. Every transaction that our "main" buyers do is set up in a land trust. So, it would be "The (Street name) Land Trust, A 3rd Party Corp.'s name or someone you trust, as trustee.

Example: The Flower Ave Land Trust, ABC Corp as trustee.

Now, the trustee should be a third party, non-related person but if you are going to be selling it immediately to an end.wholesale buyer, you can jsut go ahead and keep it a little more simple by having one of your corporations be the trustee. This could be rendered a "dry-trust" classification and I don't necessarily suggest it but it would work.

With respect to the "practicing law" aspect, whoever told you that, smile at them showing that you care about their well-being but move along because they are totally wrong.

I am based out of Southern California mysekf and do an average of 2-3 short sales each month with acceptances.

Hope this helps and good luck!

Daniel B

[SPIVALAW]

As long as you are involved in the transaction you are safe.
You cant do legal work for a third party as thier legal rep.

Keep in mind the State Bar enforces this and since you aren't a lawyer they dont have much teeth. Cant take your non license away. :>)

Plus they are busy with all the bad lawyers. I hear there maybe a few bad ones in CA.

Someone would have to really have it in for you to pursue drafting a trust.