October 6, 2026

New York Wholesaling Laws: Licensing, Solicitation Bans, and Distressed-Seller Rules

Wholesaling is legal in New York, and New York has no wholesaling-specific statute. We found no enacted law and no pending bill aimed at wholesaling in the 2025–2026 session. But New York has more rules that touch wholesalers than most states: a broker licensing law with a misdemeanor penalty and a fee-forfeiture remedy, cease-and-desist zones that ban soliciting listed homeowners, the Home Equity Theft Prevention Act for sellers in default, and a transfer tax that reaches contract assignments.

This guide covers each with links to the official law text, then gives you a checklist for New York deals. For the national picture, see our state-by-state wholesaling legal guide.

The Licensing Framework: RPL §440

Who is a broker. Under Real Property Law §440(1), a broker is a person who, "for another and for a fee, commission or other valuable consideration, lists for sale, sells… or offers or attempts to negotiate a sale… exchange, purchase or rental of an estate or interest in real estate." Two things matter: the definition reaches any "interest in real estate," and it applies to acts done "for another."

License required. RPL §440-a says no person shall "hold themselves or itself out or act temporarily or otherwise as a real estate broker" without a license. The statute has no general owner or principal exemption; the limit comes from the words "for another."

Penalties. Under RPL §442-e, any violation of the article is a misdemeanor. A person who received a fee or profit is also liable for a penalty of "not less than the amount of the sum of money received… and not more than four times the sum so received," which "may be sued for and recovered by any person aggrieved." And under RPL §442-d, no one can sue to recover compensation for real estate services without proving they were a licensed broker.

The regulator is the New York Department of State, Division of Licensing Services. We found no Department of State guidance specifically on wholesaling or contract assignments.

Cease-and-Desist Zones: A Solicitation Ban That Reaches Investors

This is the rule New York wholesalers most often miss. RPL §442-h lets the Department of State create cease-and-desist zones. Within a zone, homeowners can file a statement, and then "no real estate broker, salesperson or other person regularly engaged in the trade or business of buying and selling real estate shall solicit a listing from" them.

The Department's guidelines state that "other persons regularly engaged in the buying and selling of real estate are prohibited from soliciting homeowners included on the cease and desist list," by "telephone, mail, door-to-door communication, e-mail, text message, or any other direct means." The current zone list includes part of Brooklyn Community Board 17, effective June 28, 2023. Check the list and scrub your outreach before marketing to homeowners in any designated zone.

Distressed Sellers: RPL §265-a and §265-b

RPL §265-a: Home Equity Theft Prevention Act

RPL §265-a applies to an "equity purchaser," meaning a person who acquires title to a residence in foreclosure or default. Default means "two months or more behind in his or her mortgage payments," and the residence is a one-to-four-family dwelling the seller occupies as a primary residence. Key requirements:

Cancellation: the seller can cancel "until midnight of the fourteenth business day following the day on which the equity seller and equity purchaser sign a covered contract."
Format: the contract must be in "at least twelve-point bold type," with the required cancellation notice in "at least fourteen-point bold type," and in Spanish as well if that is the seller's primary language.
No transfers during the window: the purchaser may not "transfer or encumber or purport to transfer or encumber any interest in the residence… to any third party" while the cancellation period runs. That directly limits assigning the contract or reselling during those fourteen business days.
Penalties: a class E felony with intent to defraud, a class A misdemeanor for a knowing violation, and civil penalties up to $25,000 per violation.

RPL §265-b: distressed property consultants

RPL §265-b covers a "distressed property consultant," someone who, for compensation, offers services to stop or postpone a foreclosure. It does not regulate home purchases or contract assignments. It matters to wholesalers only if your outreach offers to "save" a homeowner from foreclosure. Among other things, it prohibits a consultant from "inducing the transfer of a deed to any person or entity" or "accepting or taking ownership of a deed."

Transfer Tax Applies to Contract Assignments

Unlike many states, New York taxes the assignment itself. Under Tax Law §1401, a "conveyance" includes a transfer "by any method, including… assignment," and an interest in real property includes "an option or contract to purchase real property." For an assignment of a contract, consideration "shall not include… the amount to be paid for the real property pursuant to the terms of the option or contract being assigned." In practice, the taxable amount on an assignment is essentially your assignment fee. Ask your attorney how to report it, and check New York City rules separately if the property is in the city.

Assignment vs Double Close in New York

Assignment of contract: You transfer your rights as buyer to an end buyer, who closes with the seller. Expect state transfer tax on the consideration for the assignment, and make sure your contract allows assignment.

Double close: You buy at the first closing and resell at a second. You hold title when you resell. There are two conveyances, so ask your attorney how transfer tax applies to each. If the seller is in default or foreclosure, RPL §265-a's fourteen-business-day cancellation period and transfer ban apply to the first purchase.

Important timing distinction: If you market the property while you are still under contract to buy it, you hold an equitable interest only, the same position as an assignment, even if you plan to double close. Structure your compliance around what you hold at the time you market, not what you plan to hold at closing.

Closing Practice and Attorneys

The Department of State's legal memorandum on brokers and the unauthorized practice of law says purchase contracts involve "very substantial legal rights which deserve the advice and guidance of a lawyer," and advises that contracts be made "subject to the approval of the respective attorneys for the parties" (dos.ny.gov). Plan on attorney review for New York contracts and confirm early that the closing attorneys will accept an assignment.

Consumer Protection: GBL §349

General Business Law §349 declares "Unfair, deceptive, or abusive acts or practices in the conduct of any business" unlawful and gives injured parties a private right of action. Be accurate with sellers about your role and intentions.

New York Compliance Checklist

Have a fully signed purchase contract with an assignment clause before you market.
Tell the seller in writing that you may assign the contract and may earn a fee.
Scrub outreach lists against any cease-and-desist zone before contacting homeowners.
If the seller is two or more months behind or in foreclosure on an owner-occupied home, follow RPL §265-a: bold-type contract, cancellation notice, and no transfer of your interest during the fourteen-business-day window.
Do not offer foreclosure "rescue" services; that triggers RPL §265-b.
Market only your own contract position. Never market or negotiate a property for another person for a fee without a license.
Plan for transfer tax on the assignment consideration.
Use attorney review for the contract and the assignment.
Keep contracts, disclosures, and copies of all marketing in the deal file.

Frequently Asked Questions

Is wholesaling legal in New York?

Yes. New York has no law that prohibits wholesaling and no wholesaling-specific statute as of October 2026. The broker licensing law, solicitation bans in cease-and-desist zones, the distressed-seller rules in RPL §265-a, and transfer tax all still apply.

Do I need a real estate license to wholesale in New York?

RPL §440 defines a broker as someone who acts "for another" for a fee. The statute does not address wholesaling directly, and the Department of State has not published guidance on it. If you market or negotiate on behalf of someone else, you are in licensed territory. Get a New York attorney's opinion on your process.

Does RPL 265-b require wholesalers to disclose assignments?

No. RPL §265-b regulates distressed property consultants who offer to stop or delay foreclosures. It does not mention assignments. The law that governs buying from homeowners in default is RPL §265-a, which requires a fourteen-business-day cancellation period and bars transferring your interest during that window.

Is a contract assignment subject to New York transfer tax?

Yes. Tax Law §1401 includes assignments of a contract to purchase real property in the definition of a conveyance. The consideration for an assignment excludes the contract price being assigned, so the tax is figured essentially on what the assignee pays you.

Disclaimer

This guide is for informational purposes only and does not constitute legal advice. Statutes and bill status were checked against official New York sources on October 6, 2026. Laws change, and how any statute applies depends on your facts. Consult a licensed New York real estate attorney before relying on this information for a transaction. Deal Run provides tools and information to help wholesalers operate more effectively. We are not a law firm and do not provide legal services.