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--></style></head><body lang="EN-US" link="blue" vlink="purple"><div class="WordSection1"><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">Good afternoon,</span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">Anyone had any experience with enforcement action by L&I seeking to force individuals who are buying and flipping properties to be registered contractors under RCW 18.27? I'm exceedingly familiar with RCW 18.27 and the effect upon individuals who are in the process of buying, rehabbing and reselling residential properties within one year of purchase. </span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">What triggered this inquiry is that I'm looking at a notice of infraction from L&I in which they indicate that the particular investor had violated RCW 18.27.200(1)(a) by advertising for sale a property that they had rehabbed and listed for sale within one year. (RCW 18.27.010(1)) Apparently the L&I inspector had got caught wind of the pending sale and issued a notice of infraction for $1000. </span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">It is my observation that real estate investors will generally purchase properties to be rehabilitated inside of an LLC and one or more members of the purchasing LLC will be a licensed contractor. The licensed contractor who is a member of the purchasing LLC then obtains the appropriate permitting from the local municipality for the repairs. The property is then sold from within the purchasing LLC.</span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">In particular, this particular L&I inspector is taking the position that this conduct is a violation of the Act in that an LLC is an improper entity for holding the property, and that the property should be held within a partnership or joint venture as set forth in below RCW 18.27.065. Put another way, had the same fact pattern occurred where the purchasing entity was a partnership or joint venture then no violation in the eyes of L&I. However, because the purchase had occurred within an LLC where one of the members was an general contractor this is a violation worthy of a notice of infraction.</span></b></p><p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></b></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">It appears to me that that particular L&I inspector cannot backup this position with anything substantive. Any thoughts on the subject?</span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">Thank you.</span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span class="apple-converted-space"><span style="font-family:"Arial","sans-serif";color:black">RCW 18.27.010 </span></span><span style="font-family:"Arial","sans-serif";color:black">(1) "Contractor" includes any person, firm, corporation, or other entity who or which, in the pursuit of an independent business undertakes to, or offers to undertake, or submits a bid to, construct, alter, repair, add to, subtract from, improve, develop, move, wreck, or demolish any building, highway, road, railroad, excavation or other structure, project, development, or improvement attached to real estate or to do any part thereof including the installation of carpeting or other floor covering, the erection of scaffolding or other structures or works in connection therewith, the installation or repair of roofing or siding, performing tree removal services, or cabinet or similar installation; or, who, to do similar work upon his or her own property, employs members of more than one trade upon a single job or project or under a single building permit except as otherwise provided in this chapter<b><u>. "Contractor" also includes a consultant acting as a general contractor. "Contractor" also includes any person, firm, corporation, or other entity covered by this subsection, whether or not registered as required under this chapter or who are otherwise required to be registered or licensed by law, who offer to sell their property without occupying or using the structures, projects, developments, or improvements for more than one year from the date the structure, project, development, or improvement was substantially completed or abandoned.</u></b></span><b><u><span style="font-size:12.0pt;font-family:"Times New Roman","serif""></span></u></b></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style="width:100.0%"><tr><td valign="bottom" style="padding:0in 3.75pt 0in 0in"><p class="MsoNormal"><span style="font-size:13.5pt;font-family:"Arial Black","sans-serif";color:black">RCW 18.27.065</span></p><p class="MsoNormal" style="margin-bottom:7.5pt"><span style="font-size:18.0pt;font-family:"Arial Black","sans-serif";color:black">Partnership or joint venture deemed registered, when.</span></p></td><td nowrap valign="top" style="padding:0in 3.75pt 0in 0in"></td></tr></table><p class="MsoNormal" style><span style="font-family:"Arial","sans-serif";color:black">A partnership or joint venture shall be deemed registered under this chapter if any one of the general partners or venturers whose name appears in the name under which the partnership or venture does business is registered.</span></p><p class="MsoNormal" style><span style="font-family:"Arial","sans-serif";color:black">[1983 1st ex.s. c 2 § 16.]</span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"> </p><p class="MsoNormal" style="line-height:12.0pt"><b><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></b></p><p class="MsoNormal" style="line-height:12.0pt"><b><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></b></p><p class="MsoNormal" style="line-height:12.0pt"><img width="86" height="130" src="cid:image008.jpg@01D0657E.35367370" align="left" hspace="12"><b><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Robert R. Rowley</span></b><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> | Attorney at Law</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">505 W. Riverside Ave, Suite 500</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Spokane, WA 99201</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Telephone: (509) 252-5074</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Mobile: (509) 994-1143</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Facsimile: (509) 928-3084</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Email: </span><a href="mailto:rob@rowleylegal.com"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:blue">rob@rowleylegal.com</span></a><span style="font-size:10.0pt;font-family:"Times New Roman","serif""></span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Web Site: </span><a href="http://www.rowleylegal.com/"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:blue">www.rowleylegal.com</span></a><span style="font-size:10.0pt;font-family:"Times New Roman","serif""></span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Practice concentrated on business, real estate and general legal matters in Washington and Idaho.</span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><a href="https://www.facebook.com/rowleylegal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:windowtext;text-decoration:none"><img border="0" width="24" height="24" id="Picture_x0020_2" src="cid:image003.gif@01D0657C.BDE3FE10"></span></a><a href="https://www.linkedin.com/pub/rob-rowley/11/172/b20"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:windowtext;text-decoration:none"><img border="0" width="24" height="24" id="Picture_x0020_3" src="cid:image004.gif@01D0657C.BDE3FE10"></span></a><a href="https://twitter.com/ROBERTRROWLEY"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:windowtext;text-decoration:none"><img border="0" width="24" height="24" id="Picture_x0020_4" src="cid:image005.gif@01D0657C.BDE3FE10"></span></a><a href="http://www.yelp.com/biz/robert-r-rowley-spokane"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:windowtext;text-decoration:none"><img border="0" width="43" height="21" id="Picture_x0020_5" src="cid:image009.jpg@01D0657E.35367370"></span></a><span style="font-size:10.0pt;font-family:"Times New Roman","serif""></span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">NOTICE: The contents of this message and any attachments may be protected by the attorney-client privilege, work product doctrine or other applicable protections. If you are not the intended recipient or have received this message in error, please notify the sender and promptly delete the message. Thank you for your assistance.</span></p><p class="MsoNormal" style="background:white"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#222222">DISCLAIMER: You should recognize that responses provided by e-mail means are akin to ordinary telephone or face-to-face conversations and do not reflect the level of factual or legal inquiry or analysis which would be applied in the case of a formal legal opinion. A formal opinion may very well reach a different conclusion.</span></p><p class="MsoNormal"> </p></div></body></html>