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Why is a real estate license not sufficient when selling investment opportunities in a large real estate project that will involve multi-use properties?

(a) Because a licensee cannot sell a partial interest in a property. (b) The multiple uses for the property require a specialized license. (c) It is a security and needs a securities license.
(d) Because of the multiple zoning which would be required.

1 Answer

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Final answer:

A real estate license is not sufficient when selling investment opportunities in a multi-use real estate project because these investments are classified as securities, necessitating a securities license to comply with laws that protect investors.

Step-by-step explanation:

When selling investment opportunities in a large real estate project, especially one that involves multi-use properties, a real estate license alone is not sufficient due to the nature of the investment being considered a security. In this scenario, the correct answer is (c) It is a security and needs a securities license.

This is because selling partial interests in a real estate project can be classified as offering securities to investors, which requires adherence to securities laws and regulations, including registration with the Securities and Exchange Commission (SEC) or qualifying for an exemption. These laws are designed to protect investors by ensuring they have access to essential information about the investment opportunity. A securities license is necessary for any individual or entity looking to sell securities, as it demonstrates they have the knowledge and are subject to the regulatory oversight needed to engage in such activities.

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