Recently, I received an unsolicited letter from a company that invites people to transfer title to residential rental properties they own in exchange for an ownership interest in the company. The company says it has, and is intending to grow, a portfolio of such rental properties.
Its promotional pitch includes no more hassles as a landlord; dividends coming from the entire portfolio instead of rent from just your own property; professional management intent on growing the portfolio’s net income and market value; and the deferral of income taxes under tax laws that allow real estate investors to exchange one property for another. (Never pay income taxes today when you can pay them tomorrow.)
This letter caused me to think about securities law, which (like water law and patent law) I know little about. What I do know is that the purchase and sale of, marketing of, and rendering of advice concerning securities is highly regulated at both the federal and state level. At the federal level, we have the Securities and Exchange Commission, administering U.S. laws and regulations. In Colorado, we have the Division of Securities, an agency (one of 10) within the Department of Regulatory Agencies, headed by a commissioner of securities. The Division of Securities issues licenses to people involved in the securities industry; monitors their activities;…
