PA dealer's license exemption - Posted by Greg

Posted by Ben-PA on October 24, 2003 at 06:43:38:

Thanks for the kind words, Doc!
I remember the post “I Encourage My Children To Drop Out Of School” and really enjoyed that. I also appreciate the humor and valuable information you freely give here.

Blue skies,

PA dealer’s license exemption - Posted by Greg

Posted by Greg on October 21, 2003 at 19:02:37:

According to the publication:
“Board of Vehicles Act”, printed May, 2002

Section 26. Exemption from licensure and registration

This act shall not be construed to require licensure and registration in the following cases:

(4) The sale, exchange, or purchase of fewer than five manufactured housing or mobile homes by a person in one calendar year.

(FYI, this is on page 53).

Section 2. Definitions

“Person.” Any individual, corporation, partnership, association or other entity foreign or domestic

(FYI, this is on page 6).

Given that the above are PA law, I challenge anyone to explain why it is less than 100% legal for a husband and wife who own one LLC to do one Lonnie deal per month in PA.


I’ll take that challange - Posted by Ben-PA

Posted by Ben-PA on October 22, 2003 at 14:11:42:

Greg it is true that a “person” can do four deals per year with no license, however how do you plan to do those deals? Will your wife do them with no help from you? How will your LLC do the deals?
If you will take the time to read the definition in Section 2 (2):
{“Buying, selling or exchanging.” Includes listing, offering, auctioning, advertising, representing or soliciting, offering or attempting to solicit or negotiate on behalf of another a sale, purchase or exchange or any similar or related activity.}

If you want 3 “persons” to do the twelve deals, who will advertise and negotiate the 4 deals for the LLC? According to this definition, you will exceed your 4 deals per year if you participate in any “related activity” to sell a mobile home for the LLC or for your wife after doing your personal 4.

I think you’d better hold off on the “Golden Big Mac Award”, Doc.

Re: PA dealer’s license exemption - Posted by Tom Kirby pa

Posted by Tom Kirby pa on October 21, 2003 at 19:30:39:

Greg, Thanx for the info! I think where It can get confusing in my opinion, you can buy up to five mobile homes in one year if you don’t finance it. Once you finance them they fall under the banking law that requires you to get licensed. That’s what I make of it. Anybody concur?

You get a Golden Big Mac Award. - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on October 21, 2003 at 19:24:30:

Greg, thanks for actually reading the law and finding the exemptions. You are a true, creative, entrepreneur, and a leader. The rest of us are followers in this matter.

When confronted with new or unique problems, one person says I can’t do that, because…

Another person asks, “How can I do that?”

Guess which one you will see ahead of you at the bank?

Greg, I applaud your iniative. May you live long and prosper.

You get a Golden Big Mac Award.

Regards, doc

Proof positive that lawyers are deal killers. - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on October 22, 2003 at 16:01:39:

Why not tell the board your occupation, Ben?

Maybe Shakespeare was right (“the first thing we do is kill all of the lawyers”) in his speculation on how to improve the world.

This is a perfect example of the triumph of technocracy over commom sense. Before condidering Ben’s suggestion I would first ask how many prosecutions per year does PA have for noncompliance with this statute on a small scale? Then, if any, I would ask what penalties were actually meted out, if any. I would asses and balance the risks against the potential rewards and then do my own thinking as to what course of action would be preferable for me.

Nowadays nearly everything is prohibited by one law or another. If you even exhale when you breathe you are probably violating some pollution law. It is impossible to obey every law, to the letter, and it CERTAINLY would reduce most entreprerneurs to abject poverty to even try.

Do not construe this as legal advice, as to what any one person should do in their specific situation. Consult with a licensed attorney in your state before taking action, BUT do your own thinking too.

Ben, I don’t mean this as anything personal against you. This is a discussion of an issue on its merits. In fact I think your comments have great value because they help explore all sides of this issue and how different people will choose to handle it in different ways in different states.

Ben, how about also giving us some of YOUR creative ideas as to how this problem may be solved, short of his getting a dealer’s license. Surely you must be aware that there have been THOUSANDS of others doing Lonnie deals for years and years, without state dealer’s licenses, who have never had ANY problem, except, how to spend all of their profits.

It is solutions, not problems that we seek.

Different strokes for different folks.

No need for this or any other post to denigrate into a cat-fight.

Personally I think the 55 + alligator guy has contributed more useful information to this board than about 99% of the others. While we do disagree from time to time we are ggenerally in lock-step agreement on most issues. It should be understandable that susccessful entrepreneurs will tend to be highly independent thinkers as well as Alpha-Male dominate types, known for their ambition & agressiveness. For this discussion the male gender is meant to include women too. That how they get to so many good deals, first. They generally don’t let ANYTHING stand in their way. There is a legitimate need for some larger hat sizes in these cases. I’ve never known a successful CEO who totally lacked an ego.

Regards, doc

I didn’t get that out of it - Posted by Greg

Posted by Greg on October 22, 2003 at 10:02:59:

Reading that section, I didn’t get out of it that financing came into play anywhere. It was just what I typed, “purchase or sale”. I really encourage you to order the book yourself and read it, starting with Section 26.

Well, lets explore some more possibilities. - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on October 21, 2003 at 20:01:00:

If you are talking about financing the sale, then couldn’t you pair-up with another Lonnie dealer and finance each other’s deals. Maybe you could work through a middleman loan broker, giving him a small set fee on each deal so you won’t run afoul of your state’s laws regulating finance companies. Even better yet, why not make a recourse agreement with the loan broker, and try to cash out on each deal at near the face value of your prospective notes. This way he or his investor/client would be the one doing the fiancing.

Where there is a will, there is a way.

Regards, doc

PA License - Another slant? - Posted by Rod - Mo

Posted by Rod - Mo on October 22, 2003 at 20:21:10:

I’m having a little trouble understanding why getting a license is even an issue. Who among us is going to let $600 stand in the way of making much more? Do a few deals and get a license. What is the real problem?

Graduate of Confused State

Re: Proof positive that lawyers are deal killers. - Posted by Ben-PA

Posted by Ben-PA on October 22, 2003 at 18:44:42:

Doc, I don’t know why you have to insult me by accusing me of being a lawyer!

Maybe you are referring to the lawyers who wrote the PA dealer laws who are the deal killers. I am not a lawyer. I am an entrepreneur, an insurance salesman, a Registered Investment Advisor, a retired photographer, a mobile home salesman, and an advertising specialties salesman and the only reason I posted was because of Greg’s “interpretation” of select areas of the PA laws. I did not want Tom Kirby to follow Greg’s advice without researching the laws himself. If Greg wants to do the “husband, wife, LLC” route, that’s fine, I just wanted Tom and the others looking for advice to be aware that it is against the PA Dealer Laws. I felt Greg was telling newbies to use this plan because it gets “around” the laws. The 4-sale rule was an exception purposely inserted; it is not a loophole that the “stupid” people in Harrisburg forgot to close and is not a valid way around the dealer laws. I was hoping to discredit Greg’s ideas enough that the newbies would be sure to get a copy of the laws and read them.

I am not trying to deal kill or discourage anyone from starting, I just want the newbies to know that the PA laws seem to be well written (that’s from a non-lawyer perspective) and if anyone wants to deal, as you say, Doc, and take the chance of not getting caught, I’ve done my part. I feel I must try to protect the newbie, who has not gotten the dealer packet, yet from blindly following advice that is faulty.

I cannot give any advice about creative ways around a license with the exception of what Doc has suggested working under someone else’s license. When I did the research a few years ago I also wanted to put 4 deals in my wife’s name and do 4 myself to start. Unfortunately, I would be doing all the selling and negotiating and, based on the law I quoted, I could not do it. (I thought I would get caught). Since I wanted more than 4 deals a year, I got the license. Now, I prefer to put all my creative thinking into the deals I do. I haven’t seen the license issue come up in over a year, although I don’t get to read this board all the time.

There are benefits to having a license such as not having to transfer the title into the dealer name immediately-savings of $20-$25 notary fee and 4-6 weeks waiting for title to be returned.

As far as the banking laws-an installment sellers license is required to put a lien on a title, but it is no big deal to get and costs $250/year. It was just renewed and they don’t give a discount for part year licensing, so now is the time to get it.

Back to you, Doc

Re: PA License - Another slant? - Posted by Greg

Posted by Greg on October 23, 2003 at 10:09:10:

Obviously, you haven’t obtained the book from Harrisburg.
$600 is the easy part. You must have a dealer’s lot. With a large commercial sign, an office, a local business license, etc.

I want no part of that. My interpretation of PA Act 82 Sections 2 and 26 is that I am not a dealer. The Act seems very straightforward and clear to me, and that’s what I’m going with. You may choose to do otherwise. Best of luck to you in all of your business ventures!

Ben, I owe you a public apology. Too bad… - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on October 22, 2003 at 20:52:52:

…I don’t always pay my debts.

I believe that I have you confused with another individual, a lawyer named Ben, that I encountered on the main board, when I did my infamous post titled “I Encourage My Children To Drop Out Of School”. I used to tweak his tail and call the vicious … Gentle Ben, after the bear.

I am sorry to have offended you. I’m twice as sorry, now that I’ve read your courteous and well thought out reply to my rude post. Yes, I know it can be a real insult to be called an attorney, for some people. As most long time readers know I often take tongue-in-cheek shots at lawyers and about 100 other unprofesional professionals, when I feel they deserve it. I was educated to be an attorney myself but never took the CA bar exam. I got distracted by my desire to make money. I read that the average lawyer (in 1979) when I graduated law, was only making about $25k per year. I made that much as a window washer, 20 years earlier, just after quiting high school two months before graduation, to show how I felt about the educational system that I had been subjected to. No Regrets. That’s where I get the Dr. in front of my name. We’ve had many a knock down, drag-out battle on CRE over my calling myself, doctor, with a Juris Doctor Degree, because most others with this degree practice law and get to wear a befitting title anyway. I don’t, so I just started a new trend (of one).

Ben, you missed one impportant benefit to being licensed. Lonnie and several other posters have pointed out that having a license exempted them from having to pay a sales tax when they buy mobile homes for resale. This can be worthwhile if the license doesn’t cost too much.

I think we should carefully weigh the costs vs the benefits of having or not having a license. If licenses are cheap and easy to obtain, why not get one and swim downstream, with the current aiding you. If they cost an impossibly high amount and impose other onerous burdens on you, like requiring a sales lot, public office, etc. then I personally would prefer to take my chances and go bare, Ben.

If I had to choose between a license and profits it would be an easy choice (Philip, please don’t ask).

It should be carefully noted that going bare isn’t for everyone. Some people couldn’t sleep at night if they didn’t put a penney in their last parking meter. Other’s, like me, couldn’t sleep any night if they didn’t steal their last parking meter.

To each, his own. I hope the board auditors benefited from hearing the various sides and opinions on this controversial subject. A lot of folks don’t have the courage to stand their ground when critiquing the opinions of established names on this board. Much to your credit, you do. Now I put you in a special, two-man category with Lyle. You’ve both got more balls than a bowling alley. Nice to have you onboard, Ben. I also thank you for the fact that you showed me more courtesy than I showed you. I am learning. I hope I am capable admitting my mistakes (if I ever make one) and of changing for the better.


Regards, doc

Re: PA License - Another slant? - Posted by Rod - Mo

Posted by Rod - Mo on October 23, 2003 at 21:39:13:

No, i don’t have the book. In Mo you only have to have an office, and it can be a home office, and a sign on your door with the hours posted. No dealers lot needed if you buy and sell units where they sit.

Best of luck to you too.