Lending Regulations Apply to "Owner-Carry" Sales
by William Bronchick
Few investors realize that when they sell a property on an owner-carry basis, they may be acting as a "lender" within the law. Keep in mind that selling a property is an extension of credit. In addition to state consumer and lending laws, you may need to comply with Federal regulations.
The first law you need to become familiar with is "Truth-in-Lending." Truth in lending, also called "Regulation Z", applies to anyone who "regularly" extends credit. Litigation of this definition has come up with a liberal definition; if you are selling properties on an owner-carry basis more than a few times a year, you are lender within the statute.
Truth in lending applies to all consumer loans, not jus...
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