The Real Estate Law provides for the licensure and regulation of real estate brokers and real estate salespersons by the Bureau of Real Estate headed by the Real Estate Commissioner. Existing law requires the commissioner to provide on the Internet specific information regarding the status of every license issued by the department. That law requires a real estate broker to immediately notify the commissioner in writing whenever a real estate salesperson enters the employ of or is terminated by that real estate broker. That law makes a willful or knowing violation of any if its provisions punishable as a misdemeanor.

This bill would, beginning January 1, 2018, require that information to include whether a licensee is an associate licensee and, if the associate licensee is a broker, to identify each responsible broker with whom the licensee is contractually associated. This bill would additionally require a real estate broker to immediately notify the commissioner in writing whenever a real estate broker acting as a salesperson enters the employ of or is terminated by the responsible real estate broker and would make certain nonsubstantive changes. By placing a new requirement on a real estate broker to report to the commissioner regarding the employment or termination of a real estate broker acting as a salesperson, this bill would expand an existing crime.

This bill would incorporate additional changes in Section 10083.2 of the Business and Professions Code, proposed by AB 1807, that would become operative only if AB 1807 and this bill are both chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Real Estate Law provides for the licensure and regulation of real estate brokers and real estate salespersons by the Bureau of Real Estate headed by the Real Estate Commissioner. Existing law requires the commissioner to provide on the Internet specific information regarding the status of every license issued by the department. That law requires a real estate broker to immediately notify the commissioner in writing whenever a real estate salesperson enters the employ of or is terminated by that real estate broker. That law makes a willful or knowing violation of any if its provisions punishable as a misdemeanor.

This bill would, beginning January 1, 2018, require that information to include whether a licensee is an associate licensee and, if the associate licensee is a broker, to identify each responsible broker with whom the licensee is contractually associated. This bill would additionally require a real estate broker to immediately notify the commissioner in writing whenever a real estate broker acting as a salesperson enters the employ of or is terminated by the responsible real estate broker and would make certain nonsubstantive changes. By placing a new requirement on a real estate broker to report to the commissioner regarding the employment or termination of a real estate broker acting as a salesperson, this bill would expand an existing crime.

This bill would incorporate additional changes in Section 10083.2 of the Business and Professions Code, proposed by AB 1807, that would become operative only if AB 1807 and this bill are both chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Real Estate Law provides for the licensure and regulation of real estate brokers and real estate salespersons by the Bureau of Real Estate headed by the Real Estate Commissioner. Existing law requires the commissioner to provide on the Internet specific information regarding the status of every license issued by the department. That law requires a real estate broker to immediately notify the commissioner in writing whenever a real estate salesman enters the employ of or is terminated by that real estate broker. That law makes a willful or knowing violation of any if its provisions punishable as a misdemeanor.

This bill would would, beginning January 1, 2018, require that information to include whether a licensee is an associate licensee and, if the associate licensee is a broker, to identify each responsible broker with whom the licensee is contractually associated. This bill would additionally require a real estate broker to immediately notify the commissioner in writing whenever a real estate broker acting as a salesperson enters the employ of or is terminated by the responsible real estate broker and would make certain nonsubstantive changes. By placing a new requirement on a real estate broker to report to the commissioner regarding the employment or termination of a real estate broker acting as a salesperson, this bill would expand an existing crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Real Estate Law provides for the licensure and regulation of real estate brokers and real estate salespersons by the Bureau of Real Estate headed by the Real Estate Commissioner. Existing law requires the commissioner to provide on the Internet specific information regarding the status of every license issued by the department. That law requires a real estate broker to immediately notify the commissioner in writing whenever a real estate salesman enters the employ of or is terminated by that real estate broker. That law makes a willful or knowing violation of any if its provisions punishable as a misdemeanor.

This bill would require that information to include whether a licensee is an associate licensee and, if the associate licensee is a broker, to identify each responsible broker with whom the licensee is contractually associated. This bill would additionally require a real estate broker to immediately notify the commissioner in writing whenever a real estate broker acting as a salesperson enters the employ of or is terminated by the responsible real estate broker and would make certain nonsubstantive changes. By placing a new requirement on a real estate broker to report to the commissioner regarding the employment or termination of a real estate broker acting as a salesperson, this bill would expand an existing crime.

The Real Estate Law provides for the licensure and regulation of real estate brokers and real estate salespersons by the Bureau of Real Estate headed by the Real Estate Commissioner. Existing law requires the commissioner to provide on the Internet specific information regarding the status of every license issued by the department.

This bill would require that information to include whether a licensee is an associate licensee and, if the associate licensee is a broker, to identify each responsible broker with whom the licensee is contractually associated.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2330

Author:(Ridley-Thomas)

As Amended Ver:August 19, 2016

Majority vote

Original Committee Reference: B. & P.

SUMMARY: Requires, beginning January 1, 2018, the Real Estate Commissioner (Commissioner) to disclose on the Bureau of Real Estate's (BRE) Web site for every licensee, whether that licensee is an associate licensee, requires the Commissioner to identify, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated, and further requires the responsible broker to report the employment relationship between himself or herself and the associate licensee to the BRE. Specifically, this bill:

1. Requires the Commissioner to disclose on the BRE's Web site for every licensee, whether that licensee is an associate licensee, beginning January 1, 2018.
2. Requires the Commissioner to identify on its Web site, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated, beginning January 1, 2018.
3. Requires the responsible broker to report the employment relationship between himself or herself and the associate licensee to the BRE, beginning January 1, 2018.
4. Adds language to avoid chaptering out issues with AB 1807 (Bonta), of the current legislative session.
5. Makes other technical and clarifying changes.

The Senate amendments require that a responsible broker report the employment relationship between himself or herself and the associate licensee to the BRE, as specified, make other minor technical and clarifying amendments, and, add language to avoid chaptering out issues with AB 1807 (Bonta), of the current legislative session.

FISCAL EFFECT: According to the Senate Appropriations Committee, this bill will result in one-time costs of about $140,000 per year for two years and ongoing costs of $80,000 per year to collect the required information and make it available on the Bureau's Web site (Real Estate Fund).

COMMENTS:

Purpose. This bill is sponsored by the California Association of Realtors. According to the author, "This bill will close an important deficiency in existing law by identifying who a real estate broker is working for when that broker is not acting under his or her own license. Existing provisions, such as the Homeowner's Bill of Rights, already require transparency in other areas of real estate transactions. [This bill] makes sure that consumers always have access to information that affects one of the biggest purchases of their lifetime."

Brokers and Salespersons. To obtain a broker's license, applicants are required to submit evidence of at least two years of experience as a real estate salesperson, in addition to elevated education requirements and passage of a written examination. In order to obtain a real estate broker license, an individual, in most cases, must have held a real estate salesperson's license for at least two years during which time he or she must have been actively engaged in real estate, meet certain real estate education requirements in addition to passing an examination. Broker and salesperson licenses are issued for a four-year period. In general, both types of licenses may be renewed by submitting the appropriate fee and application, and evidence of completion of 45 hours of BRE-approved continuing education courses. These courses include 15 hours of required courses in ethics, agency relationships, trust fund handling, fair housing, and risk management, and at least 18 hours in courses dedicated to consumer protection. The remaining courses, up to 12 hours of electives, may be related either to consumer protection or consumer services that will enable the licensee to achieve a high level of competence in serving the objectives of consumers who may engage the services of licensees to secure the transfer, financing, or similar objectives with respect to real property, including organizational and management techniques.

Unlike salespersons, licensed brokers are not required to operate under the supervision of another broker. Brokers are authorized to be the direct fiduciary representative of their clients on matters pertaining to the sale of real property. Brokers are also free to form contractual associations and partnerships that are largely governed under the civil code. Salespersons are required to report to the BRE within five days of changing supervising brokers, and the BRE discloses this information online. However, there is no similar requirement to collect and disclose this information for brokers who are acting as a contractual agent of another broker.

Associate Licensees. An associate licensee is defined in the civil code as a licensee who is acting as an agent of a broker in connection with real property transactions. A broker can also act as an associate licensee, but the BRE's Web site does not distinguish between brokers working independently and brokers voluntarily operating under the supervision of another broker. The author writes that without this legislation, a member of the public would not know if, or whom, a licensed real estate professional is supervised by, in case of a complaint. The BRE has not reported complaints regarding this issue, but the author proposes that more transparency regarding employment structure is beneficial to the consumer.

Analysis Prepared by: Elissa Silva / B. & P. / (916) 319-3301 FN: 0004881

 THIRD READING  

Bill No: AB 2330

Author: Ridley-Thomas (D)

Amended: 8/19/16 in Senate

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/20/16

AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/1/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 80-0, 5/31/16 - See last page for vote

SUBJECT: Real estate licensees

SOURCE: California Association of Realtors

DIGEST: This bill requires the Real Estate Commissioner to disclose on the Bureau of Real Estate’s Web site for every licensee, whether that licensee is an associate licensee; requires the Real Estate Commissioner to identify, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated; requires the responsible broker to report the employment relationship between themselves and the associate licensee to the Bureau of Real Estate; adds a delayed operative date to January 1, 2018; and adds double jointing language with AB 1807 (Bonta).

Senate Floor Amendments of 8/19/16 add a delayed operative date to January 1, 2018, and add double jointing language with AB 1807 (Bonta).

ANALYSIS:

Existing law:

1. Establishes within the Department of Consumer Affairs the Bureau of Real Estate (CalBRE), which regulates the licensing of real estate agents, brokers, and mortgage loan originators. (Business and Professions Code (BPC) § 10000 et seq.)
2. Defines a “real estate broker” as a person who, among other things, sells, buys, or rents real property for another for compensation, as specified.
   (BPC §§ 10131-10131.6)
3. Defines a “real estate salesperson” as a natural person who is employed by a licensed real estate broker for compensation. (BPC §§ 10017; 10132)
4. Defines a “responsible broker” to mean the broker responsible for the exercise of control and supervision of licensed salespersons. (BPC § 10159.7(a)(4))
5. Defines an associate licensee as a person who is licensed as a real estate broker or salesperson and who acts under the supervision of a broker and as the broker’s agent in connection with real estate functions. (Civil Code § 2079.13)
6. Authorizes a real estate broker acting in the capacity of a salesman to another broker under written agreement to perform acts for which a license is required on behalf of the employing broker at any place of business at which the employing broker is currently licensed to perform acts for which a real estate license is required. (Title 10 California Code of Regulations (CCR) § 2728.5)
7. Requires every broker, except a broker acting in the capacity of a salesperson to another broker under written agreement, to maintain on file with the Real Estate Commissioner (Commissioner) the address of his principal place of business for brokerage activities, the address of each branch business office and his current mailing address, if different from the business address.
   (10 CCR § 2715)
8. Requires every broker who is acting in the capacity of a salesperson to another broker under written agreement to maintain on file with the Commissioner the address of the business location where he expects to conduct most of the activities for which a license is required and his current mailing address.
   (10 CCR § 2715)
9. Requires the Commissioner of the CalBRE to post on the Internet non-confidential license information of every salesperson or broker licensed by the CalBRE. (BPC § 10083.2)

This bill:

1. Requires the Commissioner to disclose on the CalBRE's Web site for every licensee, whether that licensee is an associate licensee.
2. Requires the Commissioner to identify on its Web site, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated.
3. Requires the responsible broker to report the employment relationship between themselves and the associate licensee to the CalBRE.
4. Adds a delayed operative date to January 1, 2018.
5. Adds double jointing language with AB 1807 (Bonta).
6. Makes other technical and clarifying changes.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, this bill will incur “one-time costs of about $140,000 per year for two years and ongoing costs of $80,000 per year to collect the required information and make it available on the Bureau’s website (Real Estate Fund).”

SUPPORT: (Verified 8/22/16)

California Association of Realtors (source)

OPPOSITION: (Verified 8/22/16)

None received

ARGUMENTS IN SUPPORT: The California Association of Realtors writes in support, “AB 2330 makes a simple, but important, change in the way real estate licensees are shown on the [CalBRE] license verification website. In short, the bill requires that a salesperson who also maintains a broker’s license can still be linked to his or her responsible broker. The current system makes it difficult for consumers to verify who is actually in charge of the licensee, and the change will greatly simplify that task.”

ASSEMBLY FLOOR: 80-0, 5/31/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

Prepared by: Mark Mendoza / B., P. & E.D. / (916) 651-4104

8/22/16 22:42:33

**** END ****

 THIRD READING  

Bill No: AB 2330

Author:

:

Vote:

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/20/16

AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/1/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 80-0, 5/31/16 - See last page for vote

SUBJECT:

SOURCE: California Association of Realtors

DIGEST: This bill requires the Real Estate Commissioner to disclose on the Bureau of Real Estate’s website for every licensee, whether that licensee is an associate licensee; requires the Real Estate Commissioner to identify, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated; and requires the responsible broker to report the employment relationship between themselves and the associate licensee to the Bureau of Real Estate.

ANALYSIS:

Existing law:

1. Establishes within the Department of Consumer Affairs the Bureau of Real Estate (CalBRE), which regulates the licensing of real estate agents, brokers, and mortgage loan originators. (Business and Professions Code (BPC) § 10000 et seq.)
2. Defines a “real estate broker” as a person who, among other things, sells, buys, or rents real property for another for compensation, as specified.
   (BPC §§ 10131-10131.6)
3. Defines a “real estate salesperson” as a natural person who is employed by a licensed real estate broker for compensation. (BPC §§ 10017; 10132)
4. Defines a “responsible broker” to mean the broker responsible for the exercise of control and supervision of licensed salespersons. (BPC § 10159.7(a)(4))
5. Defines an associate licensee as a person who is licensed as a real estate broker or salesperson and who acts under the supervision of a broker and as the broker’s agent in connection with real estate functions. (Civil Code § 2079.13)
6. Authorizes a real estate broker acting in the capacity of a salesman to another broker under written agreement to perform acts for which a license is required on behalf of the employing broker at any place of business at which the employing broker is currently licensed to perform acts for which a real estate license is required. (Title 10 California Code of Regulations (CCR) § 2728.5)
7. Requires every broker, except a broker acting in the capacity of a salesperson to another broker under written agreement, to maintain on file with the Real Estate Commissioner (Commissioner) the address of his principal place of business for brokerage activities, the address of each branch business office and his current mailing address, if different from the business address.
   (10 CCR § 2715)
8. Requires every broker who is acting in the capacity of a salesperson to another broker under written agreement to maintain on file with the Commissioner the address of the business location where he expects to conduct most of the activities for which a license is required and his current mailing address.
   (10 CCR § 2715)
9. Requires the Commissioner of the CalBRE to post on the Internet non-confidential license information of every salesperson or broker licensed by the CalBRE. (BPC § 10083.2)

This bill:

1. Requires the Commissioner to disclose on the CalBRE's Web site for every licensee, whether that licensee is an associate licensee.
2. Requires the Commissioner to identify on its Web site, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated.
3. Requires the responsible broker to report the employment relationship between themselves and the associate licensee to the CalBRE.
4. Makes other technical and clarifying changes.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, this bill will incur “one-time costs of about $140,000 per year for two years and ongoing costs of $80,000 per year to collect the required information and make it available on the Bureau’s website (Real Estate Fund).”

SUPPORT: (Verified 8/2/16)

California Association of Realtors (source)

OPPOSITION: (Verified 8/2/16)

None received

ARGUMENTS IN SUPPORT: The California Association of Realtors writes in support, “AB 2330 makes a simple, but important, change in the way real estate licensees are shown on the [CalBRE] license verification website. In short, the bill requires that a salesperson who also maintains a broker’s license can still be linked to his or her responsible broker. The current system makes it difficult for consumers to verify who is actually in charge of the licensee, and the change will greatly simplify that task.”

ASSEMBLY FLOOR: 80-0, 5/31/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

Prepared by:

8/3/16 19:00:47

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 2330 (Ridley-Thomas) - Real estate licensees

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

AB 2330 would require the Bureau of Real Estate to publish information on its website regarding whether a licensee is an associate licensee. For associate licensees who are brokers, the bill would require the Bureau to identify each responsible broker that the associate licensee is contractually associated with.

Fiscal Impact:

One-time costs of about $140,000 per year for two years and ongoing costs of $80,000 per year to collect the required information and make it available on the Bureau’s website (Real Estate Fund).

Background:

Under current law, the Bureau of Real Estate licenses real estate brokers and salespersons in the state. Real estate salespersons are licensed and work under a licensed broker, who has retains fiduciary responsibly to the client. Under current law, an associate licensee is a licensed salesperson or licensed broker who is working under the supervision of a licensed broker. Under current law and practice, the Bureau of Real Estate publishes information about licensed salespersons and brokers on its website.

Proposed Law:

AB 2330 would require the Bureau of Real Estate to publish information on its website regarding whether a licensee is an associate licensee. For associate licensees who are brokers, the bill would require the Bureau to identify each responsible broker that the associate licensee is contractually associated with.

In other words, the bill would require the information on the Bureau’s website to indicate whether a licensed broker is working under the supervision of another broker.

The only costs that may be incurred by a local agency relate to crimes and infractions. Under the California Constitution, such costs are not reimbursable by the state.

-- END --

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Jerry Hill, Chair

2015 - 2016 Regular

Bill No: AB 2330 Hearing Date: June 20, 2016

Subject: Real estate licensees

SUMMARY:

Requires the Real Estate Commissioner to disclose on the Bureau of Real Estate’s website for every licensee, whether that licensee is an associate licensee; requires the Real Estate Commissioner to identify, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated; requires the responsible broker to report the employment relationship between themselves and the associate licensee to the Bureau of Real Estate.

Existing law:

1. Establishes within the Department of Consumer Affairs (DCA) the Bureau of Real Estate (CalBRE), which regulates the licensing of real estate agents, brokers, and mortgage loan originators. (Business and Professions Code (BPC) § 10000 et seq.)
2. Defines a “real estate broker” as a person who, among other things, sells, buys, or rents real property for another for compensation, as specified. (BPC §§ 10131-10131.6)
3. Defines a “real estate salesperson” as a natural person who is employed by a licensed real estate broker for compensation. (BPC §§ 10017; 10132)
4. Defines a “responsible broker” to mean the broker responsible for the exercise of control and supervision of licensed salespersons. (BPC § 10159.7(a)(4))
5. Defines an associate licensee as a person who is licensed as a real estate broker or salesperson and who acts under the supervision of a broker and as the broker’s agent in connection with real estate functions. (Civil Code (CIV) § 2079.13)
6. Authorizes a real estate broker acting in the capacity of a salesman to another broker under written agreement to perform acts for which a license is required on behalf of the employing broker at any place of business at which the employing broker is currently licensed to perform acts for which a real estate license is required. (Title 10 California Code of Regulations (CCR) § 2728.5)
7. Requires every broker, except a broker acting in the capacity of a salesperson to another broker under written agreement, to maintain on file with the Real Estate Commissioner (Commissioner) the address of his principal place of business for brokerage activities, the address of each branch business office and his current mailing address, if different from the business address. (10 CCR § 2715)
8. Requires every broker who is acting in the capacity of a salesperson to another broker under written agreement to maintain on file with the Commissioner the address of the business location where he expects to conduct most of the activities for which a license is required and his current mailing address. (10 CCR § 2715)
9. Requires the Commissioner of the CalBRE to post on the Internet non-confidential license information of every salesperson or broker licensed by the CalBRE.
   (BPC § 10083.2)

This bill:

1. Requires the Commissioner to disclose on the CalBRE's website for every licensee, whether that licensee is an associate licensee.
2. Requires the Commissioner to identify on its website, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated.
3. Requires the responsible broker to report the employment relationship between themselves and the associate licensee to the Bureau of Real Estate.
4. Makes other technical and clarifying changes.

FISCAL EFFECT: This bill has been keyed “fiscal” by Legislative Counsel. According to the April 27, 2016 Assembly Appropriations Committee analysis, this bill would cost “$153,000 (special funds) in FY 2016/17, and $137,000 (special funds) in FY 2017/18 and ongoing [costs] for 2.0 Program Technician II positions to handle the associated workload required to implement the bill. Plus, additional costs of $65,000, likely absorbable, for necessary changes to CalBRE’s IT systems. CalBRE does not currently collect information related to the contractual relationship(s) between brokers and would therefore require that information to be provided by their licensees. These costs, which are fee supported, assume the same type of processing currently used by CalBRE to collect and disclose similar information for salespersons will be required to implement the provisions of this bill.”

COMMENTS:

1. Purpose. The California Association of Realtors is the Sponsor of the bill. According to the Author, “This bill will close an important deficiency in existing law by identifying who a real estate broker is working for when that broker is not acting under his or her own license. Existing provisions, such as the Homeowner’s Bill of Rights, already require transparency in other areas of real estate transactions.
   AB 2330 makes sure that consumers always have access to information that affects one of the biggest purchases of their lifetime.”
2. Background on CalBRE. Real estate licensing in California commenced in 1917. CalBRE is the state entity currently charged with responsibility to enforce the Real Estate Law, the Subdivided Lands Act, and the Vacation Ownership and Time-share Act of 2004. CalBRE’s programs are in place to satisfy its statutorily mandated obligations of licensing and regulating salespersons, brokers, mortgage loan originators, real estate and prepaid listing service licensees, reviewing and approving subdivision and time share offerings, and approving continuing education and pre-license courses. Within the framework of requirements of Division 4 of the BPC and the Regulations of the Real Estate Commissioner as contained in the California Code of Regulations, each of CalBRE’s programs contribute toward satisfying its mission of protecting and serving the interests of the public in real estate transactions and providing related services to the real estate industry. Specifically, BPC § 10050 requires the Real Estate Commissioner to enforce all laws commencing with BPC § 10000 and BPC § 11000 of Part 2 in a manner which achieves the maximum protection for the purchasers of real property and those persons dealing with real estate licensees.
3. Brokers and Salespersons. To obtain a broker’s license, applicants are required to submit evidence of at least two years of experience as a real estate salesperson, in addition to elevated education requirements and passage of a written examination. Broker and salesperson licenses are issued for a four-year period. In general, both types of licenses may be renewed by submitting the appropriate fee and application, and evidence of completion of 45 hours of CalBRE-approved continuing education courses.

Unlike salespersons, licensed brokers are not required to operate under the supervision of another broker. Brokers are authorized to be the direct fiduciary representative of their clients on matters pertaining to the sale of real property. Brokers are also free from contractual associations and partnerships that are largely governed under the civil code. Salespersons are required to report to CalBRE within five days of changing supervising brokers, and CalBRE discloses this information online. However, there is no similar requirement to collect and disclose this information for brokers who are acting as a contractual agent of another broker.

1. Associate Licensees. An associate licensee is statutorily defined as a licensee who is acting as an agent of a broker in connection with real property transactions. A broker can also act as an associate licensee, but CalBRE’s website does not distinguish between brokers working independently and brokers voluntarily operating under the supervision of another broker. The Author writes that without this legislation, a member of the public would not know if, or whom, a licensed real estate professional is supervised by, in case of a complaint. CalBRE has not reported complaints regarding this issue, but the Author proposes that more transparency regarding employment structure is beneficial to the consumer.
2. Related Legislation. AB 2169 (Cooley) of 2014 would have reiterated the existing structure of Real Estate law that allows salespersons and brokers the choice to contract with other brokers as “independent contractor” or “employer- employee” under their retention agreement. (Status: This bill was held in the Assembly Committee on Insurance.)

AB 2540 (Dababneh, Chapter 295, Statutes of 2014) requires every real estate broker and salesperson licensee to provide the Commissioner with his or her current office or mailing address, current telephone number, and current electronic mail address that he or she uses to perform any activity that requires a real estate license, and at which the bureau may contact the licensee, and to update that information no later than 30 days after making a change.

1. Arguments in Support. The California Association of Realtors writes in support, “AB 2330 makes a simple, but important, change in the way real estate licensees are shown on the [CalBRE] license verification website. In short, the bill requires that a salesperson who also maintains a broker’s license can still be linked to his or her responsible broker. The current system makes it difficult for consumers to verify who is actually in charge of the licensee, and the change will greatly simplify that task.”

SUPPORT AND OPPOSITION:

Support:

The California Association of Realtors (Sponsor)

Opposition:

None on file as of June 14, 2016.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2330

Author:(Ridley-Thomas)

As Introduced Ver:February 18, 2016

Majority vote

SUMMARY: Requires the Real Estate Commissioner (Commissioner) to disclose on the Bureau of Real Estate's (BRE) Web site for every licensee, whether that licensee is an associate licensee, and further requires the Commissioner to identify, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated. Specifically, this bill:

1. Requires the Commissioner to disclose on the BRE's website for every licensee, whether that licensee is an associate licensee.
2. Requires the Commissioner to identify on its website, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated.

FISCAL EFFECT: According to the Assembly Committee on Appropriations, total cost of $153,000 (special funds) in fiscal year (FY) 2016/17, and $137,000 (special funds) in FY 2017/18 and ongoing for 2.0 Program Technician II positions to handle the associated workload required to implement the bill, plus additional costs of $65,000, likely absorbable, for necessary changes to the Bureau's information technology (IT) systems. The Bureau does not currently collect information related to the contractual relationship(s) between brokers and would therefore require that information to be provided by their licensees. These costs, which are fee supported, assume the same type of processing currently used by Bureau to collect and disclose similar information for salespersons will be required to implement the provisions of this bill.

COMMENTS:

Purpose. This bill is sponsored by the California Association of Realtors. According to the author, "This bill will close an important deficiency in existing law by identifying who a real estate broker is working for when that broker is not acting under his or her own license. Existing provisions, such as the Homeowner's Bill of Rights, already require transparency in other areas of real estate transactions. AB 2330 makes sure that consumers always have access to information that affects one of the biggest purchases of their lifetime."

Brokers and Salespersons. To obtain a broker's license, applicants are required to submit evidence of at least two years of experience as a real estate salesperson, in addition to elevated education requirements and passage of a written examination. In order to obtain a real estate broker license, an individual, in most cases, must have held a real estate salesperson's license for at least two years during which time he or she must have been actively engaged in real estate, meet certain real estate education requirements in addition to passing an examination. Broker and salesperson licenses are issued for a four-year period. In general, both types of licenses may be renewed by submitting the appropriate fee and application, and evidence of completion of 45 hours of BRE-approved continuing education courses. These courses include 15 hours of required courses in ethics, agency relationships, trust fund handling, fair housing, and risk management, and at least 18 hours in courses dedicated to consumer protection. The remaining courses, up to 12 hours of electives, may be related either to consumer protection or consumer services that will enable the licensee to achieve a high level of competence in serving the objectives of consumers who may engage the services of licensees to secure the transfer, financing, or similar objectives with respect to real property, including organizational and management techniques.

Unlike salespersons, licensed brokers are not required to operate under the supervision of another broker. Brokers are authorized to be the direct fiduciary representative of their clients on matters pertaining to the sale of real property. Brokers are also free to form contractual associations and partnerships that are largely governed under the civil code. Salespersons are required to report to the BRE within five days of changing supervising brokers, and the BRE discloses this information online. However, there is no similar requirement to collect and disclose this information for brokers who are acting as a contractual agent of another broker.

Associate Licensees. An associate licensee is defined in the civil code as a licensee who is acting as an agent of a broker in connection with real property transactions. A broker can also act as an associate licensee, but the BRE's Web site does not distinguish between brokers working independently and brokers voluntarily operating under the supervision of another broker. The author writes that without this legislation, a member of the public would not know if, or whom, a licensed real estate professional is supervised by, in case of a complaint. The BRE has not reported complaints regarding this issue, but the author proposes that more transparency regarding employment structure is beneficial to the consumer.

Analysis Prepared by: Elissa Silva / B. & P. / (916) 319-3301 FN: 0003174

Date of Hearing: April 27, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2330

Author:(Ridley-Thomas) – As Introduced Ver:February 18, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Real Estate Commissioner (Commissioner) to disclose on the Bureau of Real Estate’s (Bureau) website for every licensee, whether that licensee is an associate licensee, and further requires the Commissioner to identify, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated.

FISCAL EFFECT:

Total cost of $153,000 (special funds) in FY 2016/17, and $137,000 (special funds) in FY 2017/18 and ongoing for 2.0 Program Technician II positions to handle the associated workload required to implement the bill, plus additional costs of $65,000, likely absorbable, for necessary changes to the Bureau’s IT systems. The Bureau does not currently collect information related to the contractual relationship(s) between brokers and would therefore require that information to be provided by their licensees. These costs, which are fee supported, assume the same type of processing currently used by Bureau to collect and disclose similar information for salespersons will be required to implement the provisions of this bill.

COMMENTS:

1. Purpose. According to the author, “This bill will close an important deficiency in existing law by identifying who a real estate broker is working for when that broker is not acting under his or her own license. Existing provisions, such as the Homeowner’s Bill of Rights, already require transparency in other areas of real estate transactions. AB 2330 makes sure that consumers always have access to information that affects one of the biggest purchases of their lifetime.”
2. Brokers and Salespersons. To obtain a broker’s license, applicants are required to submit evidence of at least two years of experience as a real estate salesperson, in addition to elevated education requirements and passage of a written examination. Broker and salesperson licenses are issued for a four-year period. In general, both types of licenses may be renewed by submitting the appropriate fee and application, and evidence of completion of 45 hours of Bureau-approved continuing education courses.

Unlike salespersons, licensed brokers are not required to operate under the supervision of another broker. Brokers are authorized to be the direct fiduciary representative of their clients on matters pertaining to the sale of real property. Brokers are also free to from contractual associations and partnerships that are largely governed under the civil code. Salespersons are required to report to the Bureau within five days of changing supervising brokers, and the Bureau discloses this information online. However, there is no similar requirement to collect and disclose this information for brokers who are acting as a contractual agent of another broker.

1. Associate Licensees. An associate licensee is statutorily defined as a licensee who is acting as an agent of a broker in connection with real property transactions. A broker can also act as an associate licensee, but the Bureau’s website does not distinguish between brokers working independently and brokers voluntarily operating under the supervision of another broker. The author writes that without this legislation, a member of the public would not know if, or whom, a licensed real estate professional is supervised by, in case of a complaint. The Bureau has not reported complaints regarding this issue, but the author proposes that more transparency regarding employment structure is beneficial to the consumer.
2. Prior Legislation.
3. AB 2169 (Cooley) of 2014 would have reiterated the existing structure of Real Estate law that allows salespersons and brokers the choice to contract with other brokers as “independent contractor” or “employer- employee” under their retention agreement. This bill was held in the Assembly Committee on Insurance.
4. AB 2540 (Dababneh), Chapter 295, Statutes of 2014 requires every real estate broker and salesperson licensee to provide the commissioner with his or her current office or mailing address, current telephone number, and current electronic mail address that he or she uses to perform any activity that requires a real estate license, and at which the bureau may contact the licensee, and to update that information no later than 30 days after making a change.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing:

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Rudy Salas, Chair

ABPCA Bill Id:AB 2330

Author:(Ridley-Thomas) – As Introduced Ver:February 18, 2016

SUBJECT: Real estate licensees.

SUMMARY: Requires the Real Estate Commissioner (Commissioner) to disclose on the Bureau of Real Estate’s (BRE) website for every licensee, whether that licensee is an associate licensee, and further requires the Commissioner to identify, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated.

EXISTING LAW:

1. Provides for the licensure and regulation of real estate brokers and salespersons by the Real Estate Commissioner. (Business and Professions Code (BPC) Section 10000 et seq.)
2. Defines a “real estate broker” as a person who, among other things, sells, buys, or rents real property for another for compensation, as specified (BPC Sections 10131-10131.6)
3. Defines a “real estate salesperson” as a natural person who is employed by a licensed real estate broker for compensation (BPC Sections 10017, 10132)
4. Defines a “responsible broker” to mean the broker responsible for the exercise of control and supervision of licensed salespersons. (BPC Section 10159.7(a)(4))
5. Defines an associate licensee as a person who is licensed as a real estate broker or salesperson and who acts under the supervision of a broker and as the broker’s agent in connection with real estate functions. (Civil Code (CIV) Section 2079.13)
6. Authorizes a real estate broker acting in the capacity of a salesman to another broker under written agreement to perform acts for which a license is required on behalf of the employing broker at any place of business at which the employing broker is currently licensed to perform acts for which a real estate license is required (Title 10 California Code of Regulations (CCR) Section 2728.5)
7. Requires every broker, except a broker acting in the capacity of a salesperson to another broker under written agreement, to maintain on file with the commissioner the address of his principal place of business for brokerage activities, the address of each branch business office and his current mailing address, if different from the business address (10 CCR, Section 2715)
8. Requires every broker who is acting in the capacity of a salesperson to another broker under written agreement to maintain on file with the commissioner the address of the business location where he expects to conduct most of the activities for which a license is required and his current mailing address. 10 CCR, Section 2715)
9. Requires the Commissioner of the BRE to post on the Internet non-confidential license information of every salesperson or broker licensed by the BRE. (BPC Section 10083.2)
10. Requires transparency in the process of lending and home foreclosures. Also known as the Homeowner’s Bill of Rights. (CIV Sections 2920- 2925, relating to Mortgages)

THIS BILL:

1. Requires the Commissioner to disclose on the BRE's website for every licensee, whether that licensee is an associate licensee.
2. Requires the Commissioner to identify on its website, if the associate licensee is also a broker, every responsible broker with whom the associate licensee is contractually associated.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

Purpose. This bill is sponsored by the California Association of Realtors. According to the author, “This bill will close an important deficiency in existing law by identifying who a real estate broker is working for when that broker is not acting under his or her own license. Existing provisions, such as the Homeowner’s Bill of Rights, already require transparency in other areas of real estate transactions. AB 2330 makes sure that consumers always have access to information that affects one of the biggest purchases of their lifetime.”

Brokers and Salespersons. To obtain a broker’s license, applicants are required to submit evidence of at least two years of experience as a real estate salesperson, in addition to elevated education requirements and passage of a written examination. In order to obtain a real estate broker license, an individual, in most cases, must have held a real estate salesperson's license for at least two years during which time he or she must have been actively engaged in real estate, meet certain real estate education requirements in addition to passing an examination. Broker and salesperson licenses are issued for a four-year period. In general, both types of licenses may be renewed by submitting the appropriate fee and application, and evidence of completion of 45 hours of BRE-approved continuing education courses. These courses include 15 hours of required courses in ethics, agency relationships, trust fund handling, fair housing, and risk management, and at least 18 hours in courses dedicated to consumer protection. The remaining courses, up to 12 hours of electives, may be related either to consumer protection or consumer services that will enable the licensee to achieve a high level of competence in serving the objectives of consumers who may engage the services of licensees to secure the transfer, financing, or similar objectives with respect to real property, including organizational and management techniques.

Unlike salespersons, licensed brokers are not required to operate under the supervision of another broker. Brokers are authorized to be the direct fiduciary representative of their clients on matters pertaining to the sale of real property. Brokers are also free to form contractual associations and partnerships that are largely governed under the civil code. Salespersons are required to report to the BRE within five days of changing supervising brokers, and the BRE discloses this information online. However, there is no similar requirement to collect and disclose this information for brokers who are acting as a contractual agent of another broker.

Associate Licensees. An associate licensee is defined in the civil code as a licensee who is acting as an agent of a broker in connection with real property transactions. A broker can also act as an associate licensee, but the BRE’s website does not distinguish between brokers working independently and brokers voluntarily operating under the supervision of another broker. The author writes that without this legislation, a member of the public would not know if, or whom, a licensed real estate professional is supervised by, in case of a complaint. The BRE has not reported complaints regarding this issue, but the author proposes that more transparency regarding employment structure is beneficial to the consumer.

Prior Related Legislation. AB 2169 (Cooley) of 2014 would have reiterated the existing structure of Real Estate law that allows salespersons and brokers the choice to contract with other brokers as “independent contractor” or “employer- employee” under their retention agreement. NOTE: This bill was held in the Assembly Committee on Insurance.

AB 2540 (Dababneh), Chapter 295, Statutes of 2014 required every real estate broker and salesperson licensee to provide the commissioner with his or her current office or mailing address, current telephone number, and current electronic mail address that he or she uses to perform any activity that requires a real estate license, and at which the bureau may contact the licensee, and to update that information no later than 30 days after making a change. The bill also exempts a violation of this requirement from criminal penalties.

ARGUMENTS IN SUPPORT:

California Association of Realtors writes in support, “AB 2330 makes a simple, but important, change in the way real estate licensees are shown on the [BRE] license verification website. In short, the bill requires that a salesperson who also maintains a broker’s license can still be linked to his or her responsible broker. The current system makes it difficult for consumers to verify who is actually in charge of the licensee, and the change will greatly simplify that task.”

IMPLEMENTATION ISSUES:

It is not clear that the BRE currently has the authority to collect the information relevant to the implementation of this bill. Through its regulations, the BRE requires brokers (and brokers who are associate licensees) to disclose the address at which they expect to conduct most of their business. However, it does not require brokers to list every contractual association they are a party to. Additionally, nothing in the real estate code requires licensed brokers to disclose all of their contractual associations to the BRE. Thus, implementation of this bill may require time for the BRE to promulgate regulations requiring licensed brokers to disclose their contractual relationships with other brokers, so that the BRE may be able to disclose this information on the website.

REGISTERED SUPPORT:

California Association of Realtors

REGISTERED OPPOSITION:

None on file.

Analysis Prepared by: Tessa Nevarez / B. & P. / (916) 319-3301