Senate Bill 155 Receives First Hearing in Senate Judiciary Committee
By Stephen Ciacchi, Director Political Affairs
On Wednesday, April 30, Senate Bill (SB) 155 had its first hearing before the Senate Judiciary Committee, chaired by Senator Nathan Manning (R–North Ridgeville). The committee heard sponsor testimony on the bipartisan legislation, which aims to bring greater transparency to the practice of real estate wholesaling in Ohio.
SB 155 is sponsored by Senator Andrew Brenner (R–Delaware) and Senator Catherine Ingram (D–Cincinnati). The bill addresses concerns surrounding real estate wholesaling—a practice where an individual enters into a purchase agreement with a homeowner and then assigns that contract to a third-party investor for a profit. Although legal, this practice has raised red flags due to reports of deceptive tactics, such as wholesalers presenting themselves as the end buyer and making offers significantly below market value, often without homeowners fully understanding the implications until closing.
During the hearing, Senator Ingram emphasized, “Wholesalers also mislead homeowners into believing that the wholesaler is the one purchasing the property; however, the wholesaler intends to sell the contract for a profit.” Immediately following, the Senator stated, “Unlike an investor who flips a home after purchasing it, wholesalers have no intention of actually purchasing the property and never take title. If the wholesaler cannot find an investor to sell the contract to, the wholesaler will back out of the contract without closing, with few consequences,” underscoring the need for consumer protections in these transactions.
SB 155 would require wholesalers to provide written disclosures to homeowners prior to entering into a contract. The disclosure must include:
- A statement that the individual is a wholesaler and does not represent the homeowner.
- A recommendation that the homeowner seek legal counsel.
- A declaration that the wholesaler intends to assign the contract for profit.
- Notice that the contract may be assigned without the homeowner’s consent.
- A warning that a fee may be charged to a third party.
- A statement that the offer price may be below market value.
Senator Brenner while testifying, notated the importance of wholesalers presenting a disclosure to the homeowner, “This disclosure is vitally important as it informs the homeowner that the wholesaler is not representing them, that the wholesaler intends to assign their rights to the contract for a profit, and that they may be offering below fair market value for their home.”
The next step for SB 155 is for the Senate Judiciary Committee to hear proponent testimony. You can track the bill’s progress by clicking here.
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