Oklahoma Blue Sky Laws for Syndication

Navigating the complexities of securities laws is crucial for anyone involved in raising capital through Regulation D offerings, especially within the realm of real estate syndications. Understanding both federal regulations and state-specific laws, known as Blue Sky Laws, can significantly impact the success and legality of your capital-raising efforts. This article delves into Oklahoma’s Blue Sky Laws, explaining their relationship with the SEC’s Regulation D, the advantages of choosing Rule 506(b) or Rule 506(c), and the necessary procedures for compliance.

Whether you’re a real estate developer, a private equity fund manager, or a business professional involved in syndication, knowing when and how to utilize state exemptions and federal regulations is vital. From understanding the intricacies of notification requirements to determining the need for local legal counsel, this comprehensive guide will equip you with the knowledge to navigate Oklahoma’s securities landscape effectively.

Join us as we explore the essential aspects of Oklahoma’s Blue Sky Laws, providing you with the insights needed to make informed decisions and ensure your offerings are both compliant and successful.

How do a State’s Blue Sky Laws Relate to the SEC’s Regulation D?

State Blue Sky Laws are designed to regulate the offering and sale of securities within their jurisdictions to protect investors from fraud. However, when it comes to offerings under the SEC’s Regulation D, specifically Rule 506(b) and Rule 506(c), these state laws are largely preempted by federal law. This preemption is established under 15 U.S. Code § 77r(b)(4)(F), which states that state securities laws cannot require registration or qualification of securities offerings that comply with Regulation D’s Rule 506.

Preemption by Regulation D

Regulation D, and its rules 506(b) and 506(c), provide exemptions from federal securities registration, allowing companies to raise capital without the need to register the offering with the SEC. Rule 506(b) allows issuers to raise an unlimited amount of money from an unlimited number of accredited investors and up to 35 non-accredited but sophisticated investors, provided there is no general solicitation or advertising. Rule 506(c), on the other hand, permits general solicitation and advertising, but all investors must be accredited and the issuer must take reasonable steps to verify their accredited status.

When a securities offering is made under Rule 506(b) or Rule 506(c), it benefits from federal preemption, meaning that state Blue Sky Laws cannot impose their own registration requirements on these offerings. However, states can still require issuers to file a notice (often a copy of the Form D filed with the SEC) and charge a filing fee.

Intrastate Offerings

Despite the federal preemption provided by Regulation D, there is a scenario where a state’s Blue Sky Laws may still come into play. If an offering is made entirely within one state—where the sponsor, all investors, and the assets are all located in that state—the sponsor might opt to classify it as an intrastate offering. This intrastate offering can then fall under the state’s specific Blue Sky Laws rather than Regulation D.

Intrastate offerings are governed by Rule 147 and Rule 147A, which provide safe harbors for issuers to avoid federal registration if they are conducting offerings solely within one state. These rules ensure that if a sponsor chooses to rely solely on state laws, they must comply with all the specific requirements of the state’s Blue Sky Laws.

Practical Considerations

For sponsors and syndicators, understanding the relationship between state Blue Sky Laws and Regulation D is crucial for compliance and strategic decision-making. If the offering qualifies under Rule 506(b) or Rule 506(c), leveraging the federal preemption can simplify the regulatory burden. However, for intrastate offerings, close attention to state-specific requirements is necessary.

When planning a real estate syndication or any other form of capital raising, consulting with a knowledgeable syndication attorney is advisable. An experienced attorney can help navigate the complexities of both federal and state securities laws, ensuring that the offering is structured in compliance with all applicable regulations.

In summary, while state Blue Sky Laws provide essential protections, their reach is limited when it comes to offerings under Regulation D’s Rule 506(b) and Rule 506(c). Sponsors must decide strategically whether to rely on federal exemptions or state-specific intrastate offering exemptions based on their unique circumstances and goals.

Why Would I Choose Regulation D Rule 506(b) or Rule 506(c) Over the State’s Blue Sky Laws?

When deciding between utilizing Regulation D’s Rule 506(b) or Rule 506(c) exemptions and relying solely on a state’s Blue Sky Laws, several critical factors come into play. The primary considerations revolve around the geographical scope of the offering, the location of the investors, and the potential legal complications that can arise.

Geographic Scope and Investor Location

Interstate vs. Intrastate Offerings: One of the most significant limitations of state Blue Sky Laws is their applicability strictly within state borders. If a sponsor or any investor is located outside of the state, the offering can no longer be considered an intrastate offering and thus cannot rely solely on the state’s Blue Sky Laws. This restriction makes Regulation D particularly appealing for offerings that have a broader geographic reach.

Risk of Misidentification: Even if an offering initially appears to qualify as an intrastate offering, there is always a risk of discovering that an investor is domiciled outside of the state. Such a revelation can transform what was thought to be a compliant intrastate offering into one that violates state and federal securities laws. This risk underscores the importance of ensuring accurate and thorough due diligence regarding investor domiciles. Utilizing Regulation D, which allows for interstate offerings, mitigates this risk significantly.

Advantages of Regulation D Rule 506(b) and Rule 506(c)

Preemption of State Laws: One of the most compelling reasons to choose Regulation D Rule 506(b) or Rule 506(c) is the federal preemption of state Blue Sky Laws. This preemption simplifies the regulatory compliance process by eliminating the need to navigate multiple state registration requirements. Instead, issuers must only meet the federal requirements and file a notice with the states.

Unlimited Capital Raising: Both Rule 506(b) and Rule 506(c) allow issuers to raise an unlimited amount of capital. This provision is particularly advantageous for large-scale projects, such as real estate syndications, which often require substantial funding.

Flexibility in Solicitation:

• Rule 506(b): Under Rule 506(b), issuers can raise funds from an unlimited number of accredited investors and up to 35 non-accredited but sophisticated investors without engaging in general solicitation or advertising. This rule provides a balanced approach for sponsors who prefer a private, targeted approach to investor outreach.
• Rule 506(c): Rule 506(c) permits general solicitation and advertising, provided that all purchasers are accredited investors and the issuer takes reasonable steps to verify their accredited status. This rule is ideal for sponsors seeking to cast a wider net to attract capital, using public marketing channels.

Reduced Legal Risk: By opting for Regulation D exemptions, sponsors significantly reduce the legal risk associated with misidentifying an investor’s domicile. Should an out-of-state investor participate inadvertently, the offering remains compliant with federal securities laws, avoiding the severe penalties and complications that could arise from an intrastate offering found to be non-compliant.

Streamlined Process: Regulation D offerings benefit from a streamlined process in terms of regulatory filings and ongoing compliance. The federal Form D filing is relatively straightforward, and while states may require notice filings and fees, these are typically less burdensome than full state registration processes.

Practical Example for Real Estate Syndications

For a real estate syndication, where projects often attract investors from various states, relying on Regulation D exemptions is a practical choice. A syndication attorney can structure the offering to comply with either Rule 506(b) or Rule 506(c), ensuring that the capital raising process is both efficient and legally sound. This approach not only facilitates access to a broader investor base but also ensures that the offering remains compliant with securities laws regardless of investor location.

In summary, choosing Regulation D Rule 506(b) or Rule 506(c) over state Blue Sky Laws provides significant advantages in terms of legal certainty, flexibility, and the ability to raise unlimited capital from a diverse pool of investors. By mitigating the risks associated with investor domicile and simplifying the regulatory process, Regulation D offers a robust framework for successful capital raising initiatives.

What Are The Notification Rules and Terms For Notifying the State about a Regulation D Rule 506(b) or Rule 506(c) Offering?

When conducting a securities offering under Regulation D’s Rule 506(b) or Rule 506(c), compliance with federal regulations includes filing a Form D with the SEC. However, issuers must also adhere to specific state notification rules and terms, including those in Oklahoma. Here’s a detailed look at what you need to know about notifying the state of Oklahoma about your Regulation D offering.

Notification Rules for Oklahoma

Filing Requirement:
In Oklahoma, issuers of securities under Rule 506(b) or Rule 506(c) are required to submit a notice filing to the Oklahoma Department of Securities. This notice filing is a crucial step in ensuring compliance with state securities regulations, even though the offering is federally exempt from state registration requirements due to preemption.

Contents of the Notice Filing:
The notice filing typically includes the following:

• A copy of the Form D filed with the SEC.
• A Consent to Service of Process, which allows the state to receive legal documents on behalf of the issuer.
• Any other documents required by the state to provide full disclosure of the offering.

Electronic Filing via NASAA EFD:
Oklahoma utilizes the NASAA Electronic Filing Depository (EFD) system for submitting notice filings. Issuers can easily submit their filings and pay fees through this online platform. The NASAA EFD system streamlines the process and ensures that all necessary documents and fees are received by the Oklahoma Department of Securities.

Filing Fee:
Oklahoma imposes a fixed filing fee for the notice filing. The current fee is $250. This fee must be submitted along with the notice filing through the NASAA EFD system to ensure proper processing by the Oklahoma Department of Securities.

Filing Timeline:
The notice filing should be submitted promptly after the first sale of securities in Oklahoma. While the federal requirement is to file Form D within 15 days of the first sale, it is advisable to align the state filing with this timeline to maintain consistency and ensure compliance.

Late Fees:
Notably, Oklahoma does not impose a late fee for late filings of the notice. However, timely filing is highly recommended to avoid any potential complications or scrutiny from state regulators.

Practical Steps for Filing

1. Prepare the Form D: Complete the Form D on the SEC’s EDGAR system, ensuring all required information about the offering and the issuer is accurately provided.
2. Gather State-Specific Documents: Prepare the additional documents required for the state filing, including the Consent to Service of Process.
3. Submit the Filing via NASAA EFD: Use the NASAA Electronic Filing Depository (EFD) system to submit the notice filing, along with the Form D and any required documents, to the Oklahoma Department of Securities. Include the $250 filing fee through the EFD system.
4. Maintain Records: Keep a copy of all filings and correspondence with the Oklahoma Department of Securities for your records and future reference.

Compliance Tips

• Engage Legal Counsel: Working with a syndication attorney can help ensure all filings are accurate and complete, minimizing the risk of non-compliance.
• Monitor Deadlines: Keep track of all filing deadlines to avoid any issues, even in the absence of late fees.
• Stay Informed: Regularly check for any updates to state regulations or filing requirements to remain compliant with the latest rules.

In summary, notifying the state of Oklahoma about a Regulation D Rule 506(b) or Rule 506(c) offering involves submitting a notice filing through the NASAA Electronic Filing Depository (EFD) system and paying a $250 filing fee. While there are no late fees for delayed filings, timely submission is essential to maintain good standing with state regulators and ensure the smooth progress of your securities offering. By following these steps and best practices, issuers can effectively navigate the state notification process and focus on successfully raising capital.

What are Oklahoma’s Blue Sky Laws?

Oklahoma’s Blue Sky Laws are designed to protect investors from securities fraud and ensure transparency and fairness in the market. These laws cover various aspects of securities regulation, including exemptions, registration requirements, and the evidentiary burden in legal proceedings. Notably, they include statutes on the denial and suspension of exemptions, misrepresentations concerning registration, cooperation with other regulatory agencies, and the structuring of fees for securities-related activities. By understanding these regulations, investors and professionals can better navigate the complexities of the state’s securities environment and contribute to a more secure investment landscape.

1. Exempt Securities (§71-1-201): Identifies securities exempt from certain registration and filing requirements, including those issued by government entities and specific financial institutions.
2. Additional Exemptions and Waivers (§71-1-203): Allows the adoption of rules or orders to exempt specific securities or transactions, offering flexibility in regulatory requirements.
3. Denial and Suspension of Exemptions (§71-1-204): Provides authority to revoke or limit exemptions, ensuring regulatory adaptability and investor protection.
4. Securities Registration Requirement (§71-1-301): Mandates that securities offered or sold in the state be registered unless they meet specific criteria.
5. Evidentiary Burden (§71-1-503): Outlines the responsibilities of proving exemptions or exceptions in civil, administrative, and criminal proceedings.
6. Misrepresentations Concerning Registration (§71-1-506): Prohibits false claims regarding the verification or approval of securities documents by the Administrator.
7. Uniformity and Cooperation with Other Agencies (§71-1-608): Emphasizes coordination among regulatory agencies to ensure effective securities regulation.
8. Fees (§71-1-612): Details the fees for various securities-related activities and the management of these funds to support regulatory and educational purposes.

By exploring these statutes, we gain insight into the protective measures Oklahoma has implemented to safeguard investors and maintain market integrity.

OK ST T. 71 § 1-201 Exempt securities

Oklahoma Statutes §71-1-201 (2020) outlines the types of securities that are exempt from certain registration and filing requirements under the state’s securities laws. These exemptions include securities issued by government entities, foreign governments, certain banking and insurance institutions, public utilities, and nonprofit organizations. The statute also exempts specific federal covered securities and certain securities related to cooperatives and equipment trusts. Each exemption category has specific conditions that must be met for the securities to qualify.

OK ST T. 71 § 1-203 Additional exemptions and waivers

Oklahoma Statutes §71-1-203 (2015) grants the authority to adopt rules or issue orders to exempt certain securities, transactions, or offers from the requirements of Sections 10 and 32. Additionally, it allows waivers, in whole or in part, of conditions for exemptions or offers under Sections 6 and 7. This provision provides flexibility in regulatory requirements for specific situations, enhancing the adaptability of securities regulation in Oklahoma.

OK ST T. 71 § 1-204 Denial, suspension of application, revocation, condition, or limitation of exemptions

Oklahoma Statutes §71-1-204 (2014) addresses the authority to deny, suspend, revoke, condition, or limit exemptions related to securities. Orders affecting exemptions can be issued except for federal covered securities, following specific procedures and only applied prospectively. It protects individuals from violating certain sections if they were unaware of the order despite reasonable care. This statute ensures regulatory flexibility and investor protection within the securities market.

OK ST T. 71 § 1-301 Securities registration requirement

Oklahoma Statutes §71-1-301 (2014) establishes that it is illegal to offer or sell a security in the state unless it meets one of three criteria: it is a federal covered security, it is exempt from registration under specific sections of the act, or it is registered under the act. This ensures that securities sold within Oklahoma comply with regulatory standards aimed at protecting investors and maintaining market integrity.

OK ST T. 71 § 1-503 Evidentiary burden

Oklahoma Statutes §71-1-503 (2021) addresses the evidentiary burden in civil, administrative, and criminal proceedings under the Securities Act. In civil actions or administrative proceedings, the person claiming an exemption, exception, preemption, or exclusion must prove its applicability. In criminal proceedings, the person must present evidence supporting their claim. This statute ensures clarity and fairness in legal processes involving securities regulations.

OK ST T. 71 § 1-506 Misrepresentations concerning registration or exemption

Oklahoma Statutes §71-1-506 (2015) clarifies that filing an application for registration or claiming an exemption under the act does not imply that the Administrator has verified the accuracy, completeness, or quality of the filed documents. It is unlawful to make representations to the contrary to any purchaser, client, or prospective client. This statute aims to prevent misleading claims regarding the status or approval of securities or related transactions.

OK ST T. 71 § 1-608 Uniformity and cooperation with other agencies

Oklahoma Statutes §71-1-608 (2014) emphasizes cooperation and coordination among various regulatory and governmental agencies to ensure uniformity in securities regulations. The statute mandates that the Administrator collaborate with state, federal, and international agencies to streamline processes, share information, and establish common standards. The goal is to maximize regulatory effectiveness, ensure investor protection, and minimize the burdens on capital formation. Specific measures include joint investigations, shared personnel, and developing uniform forms and systems.

OK ST T. 71 § 1-612 Fees

Oklahoma Statutes §71-1-612 (2014) outlines the fees associated with various securities-related activities, such as broker-dealer registrations, investment adviser filings, and examination fees. These fees support the operations of the Oklahoma Department of Securities. The statute also establishes the Oklahoma Department of Securities Revolving Fund and the Investor Education Revolving Fund to manage these collected fees, ensuring they are used for regulatory and educational purposes within the state. This structured fee system aims to facilitate effective securities regulation and investor protection in Oklahoma.

What are Oklahoma’s Securities Laws Exemptions?

Oklahoma’s securities laws provide several exemptions that allow certain types of securities and entities to bypass the registration requirements typically imposed on securities offerings. These exemptions are designed to facilitate the issuance and transfer of securities for specific types of issuers and instruments, ensuring that they can operate efficiently without the burden of extensive regulatory compliance. Here’s a detailed look at the key exemptions under Oklahoma securities laws:

Exempt Entities and Securities

Governmental Entities

• Securities issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency or instrumentality of the foregoing are exempt. This includes municipal bonds and other governmental securities that are considered low-risk due to their backing by governmental authorities.

Certain Foreign Governmental Entities

• Securities issued or guaranteed by a foreign government with which the United States maintains diplomatic relations, provided that these securities are recognized as a valid obligation by the issuer’s home country, are also exempt from registration.

Financial Institutions

• Securities issued by financial institutions such as banks, savings institutions, trust companies, credit unions, and other depository institutions are exempt. These institutions are typically subject to rigorous federal and state regulation, providing a layer of investor protection.

Non-Profit Membership Cooperatives

• Securities issued by non-profit membership cooperatives, such as agricultural cooperatives and other similar entities, are exempt. These cooperatives operate on a not-for-profit basis and are established to serve the mutual benefit of their members.

Other Entities

• Several other types of entities benefit from exemptions, including:
  • Railroads and Common Carriers: Securities issued by railroads and other common carriers regulated by governmental entities.
  • Public Utilities and Public Utility Holding Companies: Securities issued by public utilities and their holding companies, which are regulated to ensure fair practices and rates for consumers.
  • Insurance Companies: Securities issued by insurance companies, which are heavily regulated to ensure financial solvency and consumer protection.

Equipment Trust Certificates

• Equipment trust certificates, typically used in financing the acquisition of equipment such as railcars and aircraft, are exempt. These certificates are secured by the equipment being financed and provide a measure of safety for investors.

Listed Security Market Securities and Clearing Agency Options

• Securities that are listed on recognized exchanges, such as the New York Stock Exchange (NYSE) or the NASDAQ, and options issued by registered clearing agencies are exempt. These markets have stringent listing and operational standards that protect investors.

Non-Profit Persons

• Securities issued by non-profit organizations operated exclusively for religious, educational, benevolent, fraternal, charitable, or reformatory purposes are exempt. These organizations must not distribute profits to private individuals and are typically subject to oversight regarding their non-profit status.

Practical Implications

For issuers, understanding these exemptions is crucial for determining whether a securities offering can proceed without the need for registration. By leveraging these exemptions, entities can save significant time and resources that would otherwise be spent on compliance.

For instance, a non-profit cooperative planning to issue securities to its members can utilize the exemption for non-profit membership cooperatives. Similarly, a public utility seeking to raise capital for infrastructure projects can issue securities under its exemption, thereby expediting the process.

Compliance Considerations

Even though these securities are exempt from registration, it is still essential for issuers to ensure that they comply with all other applicable laws and regulations. This may include anti-fraud provisions, disclosure requirements, and other rules designed to protect investors.

Engaging with a knowledgeable syndication attorney can provide valuable guidance on navigating these exemptions and ensuring that all necessary legal requirements are met. This proactive approach helps prevent potential legal issues and fosters trust with investors.

In summary, Oklahoma’s securities laws exemptions cover a range of governmental entities, financial institutions, non-profit organizations, and specific types of securities. Understanding and utilizing these exemptions can streamline the process of issuing securities, making it easier for qualifying entities to access capital while ensuring compliance with state regulations.

What are Oklahoma’s Procedures for Securities Law Exemptions?

Navigating the securities law exemptions in Oklahoma involves understanding not only the types of securities and entities that qualify for exemptions but also the specific procedures required to claim these exemptions. Compliance with these procedures ensures that issuers can lawfully utilize the exemptions without inadvertently violating state securities laws. Here’s a detailed look at the steps and considerations involved in claiming securities law exemptions in Oklahoma.

Identifying Applicable Exemptions

The first step in the process is to determine whether your securities offering qualifies for one of the exemptions under Oklahoma law. This involves:

1. Reviewing the Nature of the Security: Identify if the security being offered falls under any exempt categories such as governmental securities, securities issued by financial institutions, or non-profit organizations.
2. Evaluating the Issuer’s Status: Assess if the issuing entity qualifies for an exemption based on its nature and regulatory status, such as being a public utility, a non-profit cooperative, or a financial institution.

Filing a Notice of Exemption

While some exemptions do not require any filing, others may necessitate submitting a notice of exemption to the Oklahoma Department of Securities. This step involves:

1. Preparing the Required Documentation: Gather all necessary documents that support the exemption claim. This may include organizational documents, proof of regulatory status, or any other relevant evidence that demonstrates eligibility for the exemption.
2. Completing the Notice Form: Fill out the appropriate notice form provided by the Oklahoma Department of Securities. Ensure all information is accurate and complete to avoid delays or rejections.
3. Submitting the Notice: Submit the notice along with any required supporting documents to the Oklahoma Department of Securities. This can often be done electronically through the NASAA Electronic Filing Depository (EFD) system or by mail, depending on the specific requirements.

Paying Filing Fees

Some exemptions may require the payment of a filing fee as part of the notice process. The current fee structure for notice filings includes:

• Filing Fee: A fixed fee of $250 is generally required when submitting a notice of exemption.
• Payment Methods: Fees can typically be paid through the NASAA EFD system or via other approved payment methods specified by the Oklahoma Department of Securities.

Maintaining Compliance

Even when an exemption is claimed, issuers must continue to comply with other applicable securities laws and regulations. This includes:

1. Anti-Fraud Provisions: Ensuring that all information provided to investors is accurate and not misleading. Issuers are prohibited from making false statements or omitting material facts that could affect an investor’s decision.
2. Ongoing Disclosure: Providing any required updates or additional disclosures to investors, particularly if there are significant changes in the nature of the offering or the status of the issuer.
3. Record Keeping: Maintaining detailed records of all filings, communications with the Oklahoma Department of Securities, and investor interactions to demonstrate compliance and facilitate any future audits or reviews.

Engaging Legal Counsel

Navigating the exemptions and compliance requirements can be complex, and engaging with a knowledgeable syndication attorney is advisable. An experienced attorney can:

• Assess Eligibility: Help determine if your offering qualifies for an exemption under Oklahoma law.
• Prepare Documentation: Assist in preparing and submitting the necessary documentation and notices.
• Ensure Compliance: Provide ongoing guidance to ensure that all aspects of the offering comply with state and federal securities laws.

Example Scenario

Consider a non-profit organization planning to issue membership certificates to its members. The organization would:

1. Identify Exemption: Determine that the offering qualifies for the non-profit membership cooperative exemption.
2. Prepare Notice: Collect documentation proving its non-profit status and complete the necessary notice form.
3. Submit and Pay Fee: Submit the notice and pay the $250 filing fee through the NASAA EFD system.
4. Maintain Records: Keep all records of the filing and communications for future reference.

In summary, Oklahoma’s procedures for securities law exemptions involve identifying the applicable exemption, submitting a notice if required, paying any associated fees, and ensuring ongoing compliance with other relevant securities laws. By following these procedures and seeking legal counsel, issuers can efficiently navigate the exemption process and focus on their capital-raising efforts.

Frequently Asked Questions

Do I Need an Attorney from Oklahoma then to Put Together an Offering?

Whether you need an attorney from Oklahoma to put together an offering depends on the specific nature of the offering and the regulatory framework under which it falls. If your offering is structured under Regulation D, rather than being subject to Oklahoma-specific Blue Sky Laws, you may not necessarily need an attorney licensed in Oklahoma.

For instance, consider a scenario where you need a real estate syndication attorney to prepare a private placement memorandum (PPM) for a multifamily deal in Oklahoma City, Oklahoma. If this offering is going to be presented to investors across multiple states and you do not require counsel on Oklahoma-specific laws, a licensed syndication lawyer from outside Oklahoma could adequately assist you. This attorney could handle all aspects of the syndication process, including creating the entity and drafting the operating agreement, as long as they are well-versed in federal securities regulations under Regulation D. However, they would not be able to provide legal advice on specific Oklahoma securities laws and how they might impact your offering.

Conversely, if you are organizing a private placement memorandum for a development project in Tulsa, Oklahoma, and all the investors are from Oklahoma, you might want to utilize one of Oklahoma’s Blue Sky Laws as an exemption from registration. In this case, you would need to work with an attorney licensed in Oklahoma. This local attorney would have the necessary expertise to navigate the specific state regulations, ensure compliance with Oklahoma’s securities laws, and advise on how these laws pertain to your offering.

In summary, for Regulation D offerings that involve interstate investors and do not require detailed knowledge of Oklahoma’s specific securities laws, an experienced syndication attorney from any state can provide the necessary legal support. However, for offerings that rely on Oklahoma-specific exemptions and involve in-state investors, engaging an attorney licensed in Oklahoma is crucial to ensure compliance and address any state-specific legal considerations.

Is it OK if the Real Estate Syndication Attorney, Licensed Outside of Oklahoma, Looks Over My Purchase Contract?

A real estate syndication attorney licensed outside of Oklahoma can certainly review your purchase contract, but their ability to provide advice is limited by their lack of licensure in Oklahoma. For example, Tilden Moschetti, Esq., a syndication attorney with the Moschetti Syndication Law Group, can review a contract underlying a purchase in Norman, Oklahoma. However, he would clearly state that while he can offer business consulting advice—such as discussing the price and broad deal points like the length of time until closing—he cannot provide specific legal advice on the contract’s terms as they pertain to Oklahoma law.

This limitation is due to the fact that attorneys must be licensed in the state in which they practice law to offer legal advice on that state’s specific statutes and regulations. Without an Oklahoma license, an attorney cannot address specific legal terms or compliance issues under Oklahoma law. Therefore, while a syndication attorney from another state can provide valuable insights and general business advice, any legal questions or issues related to the specific terms of the purchase contract would need to be directed to an attorney licensed in Oklahoma.

In summary, it is permissible for an out-of-state syndication attorney to review your purchase contract and provide general business consulting. However, for detailed legal advice and guidance on how Oklahoma law applies to your contract, you should consult with an attorney who is licensed to practice in Oklahoma. This approach ensures that you receive accurate and compliant legal counsel tailored to the specific requirements of Oklahoma law.