BILL NUMBER: SB 53	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 11, 2011
	AMENDED IN SENATE  MARCH 22, 2011
	AMENDED IN SENATE  FEBRUARY 7, 2011

INTRODUCED BY   Senators Calderon and Vargas

                        DECEMBER 16, 2010

   An act to amend Sections 10079, 10156.2, 10176, 10177, 10237, and
10238 of, to add Sections 10080.9, 10088, 10141.6, and 10236.7 to, to
repeal Section 10239.4 of, and to repeal Article 6 (commencing with
Section 10237) and Article 6.5 (commencing with Section 10239) of
Chapter 3 of Part 1 of Division 4 of, the Business and Professions
Code, and to add Section 1808.51 to the Vehicle Code, relating to
real estate licensees.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 53, as amended, Calderon. Real estate licensees.
    (1) The Real Estate Law provides for the regulation and licensure
of real estate brokers and real estate salespersons by the Real
Estate Commissioner and makes any person who willfully violates or
knowingly participates in the violation of its provisions guilty of a
crime. Existing law authorizes the commissioner, upon his or her own
motion, and requires the commissioner upon the verified complaint in
writing of any person, to investigate the actions of a real estate
licensee who has engaged in specified acts. If the commissioner finds
that a licensee has committed those acts, existing law authorizes
the commissioner to suspend or revoke the license of the licensee or
to, instead, impose specified monetary penalties, which are required
to be credited to the Recovery Account in the Real Estate Fund.
   This bill would authorize the commissioner to issue citations to
unlicensed persons the commissioner believes to be engaging in
activities for which a real estate license is required or to
licensees who are in violation of any provision of the Real Estate
Law or any rule or order thereunder. The bill would authorize
citations to include an order to correct the violation. The bill
would authorize citations to include an administrative penalty of up
to $2,500. The bill would require any fines collected pursuant to
these provisions to be credited to the Recovery Account and made
available upon appropriation by the Legislature. The bill would make
additional changes with regard to the commissioner's authority
pertaining to discipline and licensure renewal.
   This bill would further authorize the commissioner to apply to the
superior court for an order requiring a licensee to appear before
the commissioner or to produce evidence under specified circumstances
or as pertaining to matters under investigation. The bill would
authorize the court to punish as contempt the failure of a licensee
to comply with such an order. Because contempt of court is punishable
as a crime, the bill would impose a state-mandated local program.
The bill would also authorize the commissioner to make information
public confirming an investigation or proceeding against an
unlicensed person or licensee, as specified.
   (2) Existing law imposes certain disclosure and recording
requirements on real estate brokers engaging in escrow activities.
   This bill would require a real estate broker who is exempt from
the Escrow Law and who engages in escrow activities for 5 or more
transactions in a calendar year or whose escrow activities equal or
exceed $1,000,000 in a calendar year to file a specified report with
the department within 60 days following the completion of the
calendar year. The bill would authorize the commissioner to assess
specified penalties upon a real estate broker who fails to provide
the report to the department, would require the penalties to be
deposited in the Recovery Account of the Real Estate Fund, to be made
available upon appropriation by the Legislature, and would authorize
the commissioner to suspend or revoke the license of a real estate
broker for failure to pay those penalties. Because a willful
violation of these provisions by a real estate broker would be a
crime, the bill would impose a state-mandated local program.
   (3) Existing law authorizes the commissioner to suspend or revoke
a real estate license, if the licensee has engaged in specified acts.

   This bill would authorize the commissioner to suspend or revoke a
real estate license if the licensee has violated any provision of law
that constitutes a violation of a licensing law applicable to the
licensee, as specified.
   (4) Existing law makes it unlawful for any person to offer or sell
any security in an issuer transaction unless the sale has been
qualified or the security or transaction is exempted or is not
subject to qualification, as specified. Existing law exempts from
qualification a transaction that involves the sale of a series of
notes secured directly by an interest in real property or the sale of
undivided interests in a note secured directly by real property
equivalent to a series transaction. Existing law requires a real
estate broker to indicate in the real estate broker's transaction
file the provisions of the law pertaining to qualification or
exemption from qualification under which a transaction is being
conducted. Existing law requires a real estate broker to file certain
information with the commissioner relative to conducting these
transactions that are exempt from qualification.
   This bill would require a real estate broker to submit a copy of
the information in the real estate broker's transaction file relative
to qualification or exemption from qualification for a transaction
to  the commissioner and to  any investor from whom
the real estate broker obtains funds in connection with the
transaction. The bill would also recast specified provisions relative
to the requirements that apply to transactions exempt from
qualification. Because a willful violation of these provisions by a
real estate broker would be a crime, the bill would impose a
state-mandated local program.
   (5) Existing law provides specified government law enforcement
entities with access to records of the Department of Motor Vehicles.
   This bill would provide the Real Estate Commissioner with access
to those records for purposes of enforcing specified provisions of
the Real Estate Law or the Subdivided Lands Law.
   (6) 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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10079 of the Business and Professions Code is
amended to read:
   10079.  (a) The Attorney General shall render to the commissioner
opinions upon all questions of law relating to the construction or
interpretation of this part or Chapter 1 of Part 2 or arising in the
administration thereof that may be submitted to him or her by the
commissioner. Except as provided in subdivision (b), the Attorney
General shall act as the attorney for the commissioner in all actions
and proceedings brought by or against him or her under or pursuant
to any of the provisions of this part or of Chapter 1 of Part 2.
   (b) In case of contumacy by any licensee, or refusal to obey a
subpoena issued to any licensee, the commissioner may apply to the
superior court for, and the superior court may issue to the licensee,
an order requiring the licensee to appear before the commissioner,
or the representative designated by the commissioner, to produce
documentary evidence, if so ordered, or to give evidence touching the
matter under investigation or in question. Failure of the licensee
to obey the order of the court may be punished by the court as a
contempt.
  SEC. 2.  Section 10080.9 is added to the Business and Professions
Code, to read:
   10080.9.  (a) If, upon inspection, examination, or investigation,
the commissioner has cause to believe that a person who does not
possess a real estate license is engaged or has engaged in activities
for which a real estate license is required, or that a licensee is
violating or has violated any provision of this division or any rule
or order thereunder, the commissioner or his or her designated
representative may issue a citation to that person in writing,
describing with particularity the basis of the citation. Each
citation may contain an order to correct the violation or violations
identified and a reasonable time period or periods by which the
violation or violations must be corrected. In addition, each citation
may assess an administrative fine not to exceed two thousand five
hundred dollars ($2,500), which shall be deposited into the Recovery
Account of the Real Estate Fund and shall, upon appropriation by the
Legislature, be available for expenditure for the purposes specified
in Chapter 6.5 (commencing with Section 10470). In assessing a fine,
the commissioner shall give due consideration to the appropriateness
of the amount of the fine with respect to factors such as the gravity
of the violation, the good faith of the licensee, and the history of
previous violations. A citation issued and a fine assessed pursuant
to this section shall be in lieu of other administrative discipline
by the commissioner for the offense or offenses cited.
   (b) Notwithstanding subdivision (a), nothing in this section shall
prevent the commissioner from issuing an order to desist and refrain
from engaging in a specific business activity or activities or an
order to suspend all business operations to a person who is engaged
in or has engaged in continued or repeated violations of this part.
In any of these circumstances, the sanctions authorized under this
section shall be separate from, and in addition to, all other
administrative, civil, or criminal penalties.
   (c) If, within 30 days from the receipt of the citation or the
citation and fine, the person cited fails to notify the commissioner
that he or she intends to request a hearing as described in
subdivision (d), the citation or the citation and fine shall be
deemed final.
   (d) Any hearing under this section shall be conducted in
accordance with Chapter 5 (commencing with Section 11500) of Part 1
of Division 3 of Title 2 of the Government Code.
   (e) After the exhaustion of the review procedures provided for in
this section, the commissioner may apply to the appropriate superior
court for a judgment in the amount of any administrative penalty
imposed pursuant to subdivision (a) and an order compelling the cited
person to comply with the order of the commissioner. The
application, which shall include a certified copy of the final order
of the commissioner, shall constitute a sufficient showing to warrant
the issuance of the judgment and order.
   (f) Failure of any person to comply with the terms of a citation
or pay a fine assessed pursuant to this section, within a reasonable
period specified by the commissioner, shall subject that person to
disciplinary action by the commissioner. In no event may a license be
renewed if an unpaid fine remains outstanding or the terms of a
citation have not been complied with.
  SEC. 3.  Section 10088 is added to the Business and Professions
Code, to read:
   10088.  Upon a finding by the commissioner that action is
warranted for the protection of the public, and that failure to act
is likely to result in grievous harm to the public, the commissioner
may make information public confirming the fact of an investigation
or proceeding regarding a licensee or unlicensed person believed to
be engaging in activities for which a real estate license is
required. Any release that contains the identity of a person or
business under investigation shall include language explaining that
the subject of the release is entitled to a public hearing on the
merits of the accusation or accusations against that person or
business. The release may also clarify the procedural aspects and
current status of the investigation or proceeding.
  SEC. 4.  Section 10141.6 is added to the Business and Professions
Code, to read:
   10141.6.  (a) A real estate broker who engages in escrow
activities for five or more transactions in a calendar year pursuant
to the exemption from the Escrow Law contained in Section 17006 of
the Financial Code, or whose escrow activities pursuant to that
exemption equal or exceed one million dollars ($1,000,000) in a
calendar year, shall file with the department a report, within 60
days following the completion of the calendar year, documenting the
number of escrows conducted and the dollar volume escrowed during the
calendar year in which the threshold was met. This report shall be
made on a form acceptable to the commissioner.
   (b) A real estate broker subject to this section and Section
10232.2 may file consolidated reports that include all of the
information required under this section and Section 10232.2. Those
consolidated reports shall clearly indicate that they are intended to
satisfy the requirements of both sections.
   (c) A real estate broker who fails to submit the report required
pursuant to subdivision (a) shall be assessed a penalty of fifty
dollars ($50) per day for each day the report has not been received
by the department, up to and including the 30th day after the first
day of the assessment penalty. On and after the 31st day, the penalty
shall be one hundred dollars ($100) per day, not to exceed a total
penalty of ten thousand dollars ($10,000), regardless of the number
of days, until the department receives the report.
   (d) The commissioner may suspend or revoke the license of a real
estate broker who fails to pay a penalty imposed pursuant to this
section. In addition, the commissioner may bring an action in an
appropriate court of this state to collect payment of that penalty.
   (e) All penalties paid or collected under this section shall be
deposited into the Recovery Account of the Real Estate Fund and
shall, upon appropriation by the Legislature, be available for
expenditure for the purposes specified in Chapter 6.5 (commencing
with Section 10470).
   (f) The reports described in this section are exempted from any
requirement of public disclosure by paragraph (2) of subdivision (d)
of Section 6254 of the Government Code.
  SEC. 5.  Section 10156.2 of the Business and Professions Code is
amended to read:
   10156.2.  An application on the form prescribed by the
commissioner for the renewal of a license, filed before midnight of
the last day of the period for which a previous license was issued,
accompanied by the applicable renewal fee and good faith evidence of
compliance with the provisions of Article 2.5 (commencing with
Section 10170), entitles the applicant to continue operating under
his or her existing license after its specified expiration date, if
not previously suspended or revoked.
   If the commissioner determines that the applicant has not complied
with the continuing education requirements, he or she shall either
(1) advise the applicant of the applicability of Section 10171.2 on
an extended period for compliance; or (2) advise the applicant that
his or her rights to operate under the prior license will expire five
days from the date the notice is mailed, or on the date the license
would normally expire, whichever is later; and the commissioner's
reason for that determination, and the right of the applicant to
request a hearing on the decision. Nothing in this section shall be
deemed to require the commissioner to renew the license of a licensee
believed by the commissioner to be operating in violation of any of
the provisions of this division other than those provided in Article
2.5 (commencing with Section 10170).
  SEC. 6.  Section 10176 of the Business and Professions Code is
amended to read:
   10176.  The commissioner may, upon his or her own motion, and
shall, upon the verified complaint in writing of any person,
investigate the actions of any person engaged in the business or
acting in the capacity of a real estate licensee within this state,
and he or she may temporarily suspend or permanently revoke a real
estate license at any time where the licensee, while a real estate
licensee, in performing or attempting to perform any of the acts
within the scope of this chapter has been guilty of any of the
following:
   (a) Making any substantial misrepresentation.
   (b) Making any false promises of a character likely to influence,
persuade, or induce.
   (c) A continued and flagrant course of misrepresentation or making
of false promises through real estate agents or salespersons.
   (d) Acting for more than one party in a transaction without the
knowledge or consent of all parties thereto.
   (e) Commingling with his or her own money or property the money or
other property of others which is received and held by him or her.
   (f) Claiming, demanding, or receiving a fee, compensation or
commission under any exclusive agreement authorizing or employing a
licensee to perform any acts set forth in Section 10131 for
compensation or commission where the agreement does not contain a
definite, specified date of final and complete termination.
   (g) The claiming or taking by a licensee of any secret or
undisclosed amount of compensation, commission or profit or the
failure of a licensee to reveal to the employer of the licensee the
full amount of the licensee's compensation, commission or profit
under any agreement authorizing or employing the licensee to do any
acts for which a license is required under this chapter for
compensation or commission prior to or coincident with the signing of
an agreement evidencing the meeting of the minds of the contracting
parties, regardless of the form of the agreement, whether evidenced
by documents in an escrow or by any other or different procedure.
   (h) The use by a licensee of any provision allowing the licensee
an option to purchase in an agreement authorizing or employing the
licensee to sell, buy, or exchange real estate or a business
opportunity for compensation or commission, except when the licensee
prior to or coincident with election to exercise the option to
purchase reveals in writing to the employer the full amount of
licensee's profit and obtains the written consent of the employer
approving the amount of the profit.
   (i) Any other conduct, whether of the same or a different
character than specified in this section, which constitutes fraud or
dishonest dealing.
   (j) Obtaining the signature of a prospective purchaser to an
agreement which provides that the prospective purchaser shall either
transact the purchasing, leasing, renting, or exchanging of a
business opportunity property through the broker obtaining the
signature, or pay a compensation to the broker if the property is
purchased, leased, rented, or exchanged without the broker first
having obtained the written authorization of the owner of the
property concerned to offer the property for sale, lease, exchange,
or rent.
   (k) Failing to disburse funds in accordance with a commitment to
make a mortgage loan that is accepted by the applicant when the real
estate broker represents to the applicant that the broker is either
of the following:
   (1) The lender.
   (2) Authorized to issue the commitment on behalf of the lender or
lenders in the mortgage loan transaction.
   (  l  ) Intentionally delaying the closing of a mortgage
loan for the sole purpose of increasing interest, costs, fees, or
charges payable by the borrower.
   (m) Generating an inaccurate opinion of the value of residential
real property, requested in connection with a debt forgiveness sale,
in order to do either or both of the following:
   (1) Manipulate the lienholder to reject the proposed debt
forgiveness sale.
   (2) Acquire a financial or business advantage, including a listing
agreement, that directly results from the inaccurate opinion of
value, with regard to the subject property.
   (n) Violating any section, division, or article of law which
provides that a violation of that section, division, or article of
law by a licensed person is a violation of that person's licensing
law, if it occurs within the scope of that person's duties as a
licensee.
  SEC. 7.  Section 10177 of the Business and Professions Code is
amended to read:
   10177.  The commissioner may suspend or revoke the license of a
real estate licensee, deny the renewal of a license of a real estate
licensee, or deny the issuance of a license to an applicant, who has
done any of the following, or may suspend or revoke the license of a
corporation, deny the renewal of a license of a corporation, or deny
the issuance of a license to a corporation, if an officer, director,
or person owning or controlling 10 percent or more of the corporation'
s stock has done any of the following:
   (a) Procured, or attempted to procure, a real estate license or
license renewal, for himself or herself or a salesperson, by fraud,
misrepresentation, or deceit, or by making a material misstatement of
fact in an application for a real estate license, license renewal,
or reinstatement.
   (b) Entered a plea of guilty or nolo contendere to, or been found
guilty of, or been convicted of, a felony, or a crime substantially
related to the qualifications, functions, or duties of a real estate
licensee, and the time for appeal has elapsed or the judgment of
conviction has been affirmed on appeal, irrespective of an order
granting probation following that conviction, suspending the
imposition of sentence, or of a subsequent order under Section 1203.4
of the Penal Code allowing that licensee to withdraw his or her plea
of guilty and to enter a plea of not guilty, or dismissing the
accusation or information.
   (c) Knowingly authorized, directed, connived at, or aided in the
publication, advertisement, distribution, or circulation of a
material false statement or representation concerning his or her
designation or certification of special education, credential, trade
organization membership, or business, or concerning a business
opportunity or a land or subdivision, as defined in Chapter 1
(commencing with Section 11000) of Part 2, offered for sale.
   (d) Willfully disregarded or violated the Real Estate Law (Part 1
(commencing with Section 10000)) or Chapter 1 (commencing with
Section 11000) of Part 2 or the rules and regulations of the
commissioner for the administration and enforcement of the Real
Estate Law and Chapter 1 (commencing with Section 11000) of Part 2.
   (e) Willfully used the term "realtor" or a trade name or insignia
of membership in a real estate organization of which the licensee is
not a member.
   (f) Acted or conducted himself or herself in a manner that would
have warranted the denial of his or her application for a real estate
license, or has either had a license denied or had a license issued
by another agency of this state, another state, or the federal
government revoked or suspended for acts that, if done by a real
estate licensee, would be grounds for the suspension or revocation of
a California real estate license, if the action of denial,
revocation, or suspension by the other agency or entity was taken
only after giving the licensee or applicant fair notice of the
charges, an opportunity for a hearing, and other due process
protections comparable to the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340), Chapter 4 (commencing with
Section 11370), and Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code), and only upon an
express finding of a violation of law by the agency or entity.
   (g) Demonstrated negligence or incompetence in performing an act
for which he or she is required to hold a license.
   (h) As a broker licensee, failed to exercise reasonable
supervision over the activities of his or her salespersons, or, as
the officer designated by a corporate broker licensee, failed to
exercise reasonable supervision and control of the activities of the
corporation for which a real estate license is required.
   (i) Has used his or her employment by a governmental agency in a
capacity giving access to records, other than public records, in a
manner that violates the confidential nature of the records.
   (j) Engaged in any other conduct, whether of the same or a
different character than specified in this section, which constitutes
fraud or dishonest dealing.
   (k) Violated any of the terms, conditions, restrictions, and
limitations contained in an order granting a restricted license.
   (l) (1) Solicited or induced the sale, lease, or listing for sale
or lease of residential property on the ground, wholly or in part, of
loss of value, increase in crime, or decline of the quality of the
schools due to the present or prospective entry into the neighborhood
of a person or persons having a characteristic listed in subdivision
(a) or (d) of Section 12955 of the Government Code, as those
characteristics are defined in Sections 12926 and 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section
12955, and Section 12955.2 of the Government Code.
   (2) Notwithstanding paragraph (1), with respect to familial
status, paragraph (1) shall not be construed to apply to housing for
older persons, as defined in Section 12955.9 of the Government Code.
With respect to familial status, nothing in paragraph (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government
Code shall apply to paragraph (1).
   (m) Violated the Franchise Investment Law (Division 5 (commencing
with Section 31000) of Title 4 of the Corporations Code) or
regulations of the Commissioner of Corporations pertaining thereto.
   (n) Violated the Corporate Securities Law of 1968 (Division 1
(commencing with Section 25000) of Title 4 of the Corporations Code)
or the regulations of the Commissioner of Corporations pertaining
thereto.
   (o) Failed to disclose to the buyer of real property, in a
transaction in which the licensee is an agent for the buyer, the
nature and extent of a licensee's direct or indirect ownership
interest in that real property. The direct or indirect ownership
interest in the property by a person related to the licensee by blood
or marriage, by an entity in which the licensee has an ownership
interest, or by any other person with whom the licensee has a special
relationship shall be disclosed to the buyer.
   (p) Violated Article 6 (commencing with Section 10237).
   (q) Violated or failed to comply with Chapter 2 (commencing with
Section 2920) of Title 14 of Part 4 of Division 3 of the Civil Code,
related to mortgages.
   If a real estate broker that is a corporation has not done any of
the foregoing acts, either directly or through its employees, agents,
officers, directors, or persons owning or controlling 10 percent or
more of the corporation's stock, the commissioner may not deny the
issuance or renewal of a real estate license to, or suspend or revoke
the real estate license of, the corporation, provided that any
offending officer, director, or stockholder, who has done any of the
foregoing acts individually and not on behalf of the corporation, has
been completely disassociated from any affiliation or ownership in
the corporation.
  SEC. 8.  Section 10236.7 is added to the Business and Professions
Code, to read:
   10236.7.  (a) A real estate broker, when engaging in acts for
which a license is required, who arranges a transaction pursuant to
Article 6 (commencing with Section 10237) or one or more provisions
of the Corporate Securities Law of 1968 (Division 1 (commencing with
Section 25000) of Title 4 of the Corporations Code), shall clearly
indicate in the real estate broker's transaction file the provision
or provisions of this code or the Corporate Securities Law of 1968
pertaining to qualification or exemption from qualification under
which the transaction is being conducted. The real estate broker
shall retain this information for the period specified in subdivision
(a) of Section 10148.
   (b) The real estate broker shall submit a copy of the information
described in subdivision (a) to  all of the following:
 
   (1) The commissioner, within 30 days of soliciting potential
investors pursuant to Article 6 (commencing with Section 10237) or
the Corporate Securities Law of 1968 (Division 1 (commencing with
Section 25000) of Title 4 of the Corporations Code). 
    (2)     Any 
 any  investor from whom the real estate broker obtains
funds in connection with the transaction, either directly or through
an agent or affiliate, within 10 days of receipt of those funds.
  SEC. 9.  Section 10237 of the Business and Professions Code, as
added by Section 2 of Chapter 901 of the Statutes of 2003, is amended
to read:
   10237.  This article applies only to the exemption from securities
qualification claimed under Section 25102.5 of the Corporations
Code. This article does not apply to any other exemption from
securities qualification, including subdivision (e) of Section 25102
of the Corporations Code, that may be claimed without complying with
this article, or to any permit to qualify the offer and sale of
securities under the Corporate Securities Law of 1968 (Division 1
(commencing with Section 25000) of Title 4 of the Corporations Code).
Any transaction that involves the sale of or offer to sell a series
of notes secured directly by interests in one or more parcels of real
property, or the sale of undivided interests in a note secured
directly by one or more parcels of real property equivalent to a
series transaction, shall comply with all of the provisions of this
article.
  SEC. 10.  Article 6 (commencing with Section 10237) of Chapter 3 of
Part 1 of Division 4 of the Business and Professions Code, as added
by Chapter 886 of the Statutes of 1961, is repealed.
  SEC. 11.  Section 10238 of the Business and Professions Code is
amended to read:
   10238.  (a) A notice in the following form and containing the
following information shall be filed with the commissioner within 30
days after the first transaction and within 30 days of any material
change in the information required in the notice:
TO: Real Estate
     Commissioner
     Mortgage Loan
     Section
     2201
     Broadway
     Sacramento, CA 95818
This notice is filed pursuant to Sections 10237
and 10238 of the Business and Professions
Code.
( ) Original Notice    ( ) Amended Notice
1.  Name of Broker conducting transaction under
     Section 10237:
     _______________________________________________
2.  Broker license identification number: _________
3.  List the month the fiscal year ends: __________
4.  Broker's telephone number: ____________________
5.  Firm name (if different from ""1''):
     _______________________________________________
6.  Street address (main location):
     _____________________________________________
     # and Street     City     State     ZIP Code
7.  Mailing address (if different from ""6''):
     _______________________________________________
8.  Servicing agent: Identify by name, address,
     and telephone number the person or entity who
     will act as the servicing agent in
     transactions pursuant to Section 10237
     (including the undersigned Broker if that is
     the case):
     _______________________________________________
     _______________________________________________
9.  Total number of multilender notes arranged: ___
10. Total number of       interests sold to
     investors on the
     multilender's notes: __________________________
11. Inspection of trust account (before answering
     this question, review the provisions of
     paragraph (3) of subdivision (k) of Section
     10238).
CHECK ONLY ONE OF THE FOLLOWING:
( ) The undersigned Broker is (or expects to be)
     required to file reports of inspection of its
     trust account(s) with the Real Estate
     Commissioner pursuant to paragraph (3) of
     subdivision (k) of Section       10238.
Amount of Multilender Payments Collected Last
Fiscal Quarter: ___________________________________
Total Number of Investors Due Payments Last Fiscal
Quarter: __________________________________________
( ) The undersigned Broker is NOT (or does NOT
     expect to be) required to file reports of
     inspection of its trust account(s) with the
     Real Estate Commissioner pursuant to paragraph
     (3) of subdivision (k) of Section 10238.
12. Signature. The contents of this notice are
     true and correct.
     ____________ __________________________________
         Date             Type Name of Broker
                  __________________________________
                       Signature of Broker or of
                         Designated Officer of
                           Corporate Broker
                  __________________________________
                        Type Name of Person(s)
                          Signing This Notice


NOTE: AN AMENDED NOTICE MUST BE FILED BY THE BROKER WITHIN 30 DAYS OF
ANY MATERIAL CHANGE IN THE INFORMATION REQUIRED TO BE SET FORTH
HEREIN.

   (b) A broker or person who becomes the servicing agent for notes
or interest sold pursuant to this article, upon which payments due
during any period of three consecutive months in the aggregate exceed
one hundred twenty-five thousand dollars ($125,000) or the number of
persons entitled to the payments exceeds 120, shall file the notice
required by subdivision (a) with the commissioner within 30 days
after becoming the servicing agent.
   (c) All advertising employed for transactions under this article
shall show the name of the broker and comply with Section 10235 and
Sections 260.302 and 2848 of Title 10 of the California Code of
Regulations. Brokers and their agents are cautioned that a reference
to a prospective investor that a transaction is conducted under this
article may be deemed misleading or deceptive if this representation
may reasonably be construed by the investor as an implication of
merit or approval of the transaction.
   (d) Each parcel of real property directly securing the notes or
interests shall be located in this state, the note or notes shall not
by their terms be subject to subordination to any subsequently
created deed of trust upon the real property, and the note or notes
shall not be promotional notes secured by liens on separate parcels
of real property in one subdivision or in contiguous subdivisions.
For purposes of this subdivision, a promotional note means a
promissory note secured by a trust deed, executed on unimproved real
property or executed after construction of an improvement of the
property but before the first purchase of the property as so
improved, or executed as a means of financing the first purchase of
the property as so improved, that is subordinate, or by its terms may
become subordinate, to any other trust deed on the property.
However, the term "promotional note" does not include either of the
following:
   (1) A note that was executed in excess of three years prior to
being offered for sale.
   (2) A note secured by a first trust deed on real property in a
subdivision that evidences a bona fide loan made in connection with
the financing of the usual cost of the development in a residential,
commercial, or industrial building or buildings on the property under
a written agreement providing for the disbursement of the loan funds
as costs are incurred or in relation to the progress of the work and
providing for title insurance ensuring the priority of the security
as against mechanic's and materialmen's liens or for the final
disbursement of at least 10 percent of the loan funds after the
expiration of the period for the filing of mechanic's and materialmen'
s liens.
   (e) The notes or interests shall be sold by or through a real
estate broker, as principal or agent. At the time the interests are
originally sold or assigned, neither the broker nor an affiliate of
the broker shall have an interest as owner, lessor, or developer of
the property securing the loan, or any contractual right to acquire,
lease, or develop the property securing the loan. This provision does
not prohibit a broker from conducting the following transactions if,
in either case, the disclosure statement furnished by the broker
pursuant to subdivision (  l  ) discloses the interest of
the broker or affiliate in the transaction and the circumstances
under which the broker or affiliate acquired the interest:
   (1) A transaction in which the broker or an affiliate of the
broker is acquiring the property pursuant to a foreclosure under, or
sale pursuant to, a deed of trust securing a note for which the
broker is the servicing agent or that the broker sold to the holder
or holders.
   (2) A transaction in which the broker or an affiliate of the
broker is reselling from inventory property acquired by the broker
pursuant to a foreclosure under, or sale pursuant to, a deed of trust
securing a note for which the broker is the servicing agent or that
the broker sold to the holder or holders.
   (f) (1) The notes or interests shall not be sold to more than 10
persons, each of whom meets one or both of the qualifications of
income or net worth set forth below and signs a statement, which
shall be retained by the broker for four years, conforming to the
following:
Transaction Identifier:__________________________
Name of Purchaser:_____________________ Date:____
Check either one of the following, if true:
( ) My investment in the transaction does not
     exceed 10% of my net worth, exclusive of
     home, furnishings, and automobiles.
( ) My investment in the transaction does not
     exceed 10% of my adjusted gross income for
     federal income tax purposes for my last tax
     year or, in the alternative, as estimated
     for the current year.
                                 _________________
                                     Signature


   (2) The number of offerees shall not be considered for the
purposes of this section.
   (3) A husband and wife and their dependents, and an individual and
his or her dependents, shall be counted as one person.
   (4) A retirement plan, trust, business trust, corporation, or
other entity that is wholly owned by an individual and the individual'
s spouse or the individual's dependents, or any combination thereof,
shall not be counted separately from the individual, but the
investments of these entities shall be aggregated with those of the
individual for the purposes of the statement required by paragraph
(1). If the investments of any entities are required to be aggregated
under this subdivision, the adjusted gross income or net worth of
these entities may also be aggregated with the net worth, income, or
both, of the individual.
   (5) The "institutional investors" enumerated in subdivision (i) of
Section 25102 or subdivision (c) of Section 25104 of the
Corporations Code, or in a rule adopted pursuant thereto, shall not
be counted.
   (6) A partnership, limited liability company, corporation, or
other organization that was not specifically formed for the purpose
of purchasing the security offered in reliance upon this exemption
from securities qualification is counted as one person.
   (g) The notes or interests of the purchasers shall be identical in
their underlying terms, including the right to direct or require
foreclosure, rights to and rate of interest, and other incidents of
being a lender, and the sale to each purchaser pursuant to this
section shall be upon the same terms, subject to adjustment for the
face or principal amount or percentage interest purchased and for
interest earned or accrued. This subdivision does not preclude
different selling prices for interests to the extent that these
differences are reasonably related to changes in the market value of
the loan occurring between the sales of these interests. The interest
of each purchaser shall be recorded pursuant to subdivisions (a) to
(c), inclusive, of Section 10234.
   (h) (1) Except as provided in paragraph (2), the aggregate
principal amount of the notes or interests sold, together with the
unpaid principal amount of any encumbrances upon the real property
senior thereto, shall not exceed the following percentages of the
current market value of each parcel of the real property, as
determined in writing by the broker or appraiser pursuant to Section
10232.6, plus the amount for which the payment of principal and
interest in excess of the percentage of current market value is
insured for the benefit of the holders of the notes or interests by
an insurer admitted to do business in this state by the Insurance
Commissioner:
(A)  Single-family residence, owner occupied
      ........................................  80%
(B)  Single-family residence, not owner
      occupied ...............................  75%
(C)  Commercial and income-producing
      properties .............................  65%
(D)  Single-family residentially zoned lot
      or parcel which has
      installed offsite       improvements
      including drainage, curbs,
      gutters, sidewalks, paved roads, and
      utilities as mandated
      by the political subdivision having
      jurisdiction over the lot
      or parcel ..............................  65%
(E)  Land that has been zoned for (and if
      required, approved for
      subdivision as) commercial or
      residential development ................  50%
(F)  Other real property ....................  35%


   (2) The percentage amounts specified in paragraph (1) may be
exceeded when and to the extent that the broker determines that the
encumbrance of the property in excess of these percentages is
reasonable and prudent considering all relevant factors pertaining to
the real property. However, in no event shall the aggregate
principal amount of the notes or interests sold, together with the
unpaid principal amount of any encumbrances upon the property senior
thereto, exceed 80 percent of the current fair market value of
improved real property or 50 percent of the current fair market value
of unimproved real property, except in the case of a single-family
zoned lot or parcel as defined in paragraph (1), which shall not
exceed 65 percent of the current fair market value of that lot or
parcel, plus the amount insured as specified in paragraph (1). A
written statement shall be prepared by the broker that sets forth the
material considerations and facts that the broker relies upon for
his or her determination, which shall be retained as a part of the
broker's record of the transaction. Either a copy of the statement or
the information contained therein shall be included in the
disclosures required pursuant to subdivision (l).
   (3) A copy of the appraisal or the broker's evaluation, for each
parcel of real property securing the notes or interests, shall be
delivered to each purchaser. The broker shall advise purchasers of
their right to receive a copy. For purposes of this paragraph,
"appraisal" means a written estimate of value based upon the
assembling, analyzing, and reconciling of facts and value indicators
for the real property in question. A broker shall not purport to make
an appraisal unless the person so employed is qualified on the basis
of special training, preparation, or experience.
   (4) For construction or rehabilitation loans, the term "current
market value" may be deemed to be the value of the completed project
if the following safeguards are met:
   (A) An independent neutral third-party escrow holder is used for
all deposits and disbursements.
   (B) The loan is fully funded, with the entire loan amount to be
deposited in escrow prior to recording of the deed or deeds of trust.

   (C) A comprehensive, detailed, draw schedule is used to ensure
proper and timely disbursements to allow for completion of the
project.
   (D) The disbursement draws from the escrow account are based on
verification from an independent qualified person who certifies that
the work completed to date meets the related codes and standards and
that the draws were made in accordance with the construction contract
and draw schedule. For purposes of this subparagraph, "independent
qualified person" means a person who is not an employee, agent, or
affiliate of the broker and who is a licensed architect, general
contractor, structural engineer, or active local government building
inspector acting in his or her official capacity.
   (E) An appraisal is completed by a qualified and licensed
appraiser in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP).
   (F) In addition to the transaction documentation required by
subdivision (i), the documentation shall include a detailed
description of actions that may be taken in the event of a failure to
complete the project, whether that failure is due to default,
insufficiency of funds, or other causes.
   (G) The entire amount of the loan does not exceed two million five
hundred thousand dollars ($2,500,000).
   (5) If a note or an interest will be secured by more than one
parcel of real property, for the purpose of determining the maximum
amount of the note or interest, each security property shall be
assigned a portion of the note or interest which shall not exceed the
percentage of current market value determined by, and in accordance
with, the provisions of paragraphs (1) and (2).
   (i) The documentation of the transaction shall require that (1) a
default upon any interest or note is a default upon all interests or
notes and (2) the holders of more than 50 percent of the recorded
beneficial interests of the notes or interests may govern the actions
to be taken on behalf of all holders in accordance with Section
2941.9 of the Civil Code in the event of default or foreclosure for
matters that require direction or approval of the holders, including
designation of the broker, servicing agent, or other person acting on
their behalf, and the sale, encumbrance, or lease of real property
owned by the holders resulting from foreclosure or receipt of a deed
in lieu of foreclosure. The terms called for by this subdivision may
be included in the deed of trust, in the assignment of interests, or
in any other documentation as is necessary or appropriate to make
them binding on the parties.
   (j) (1) The broker shall not accept any purchase or loan funds or
other consideration from a prospective lender or purchaser, or
directly or indirectly cause the funds or other consideration to be
deposited in an escrow or trust account, except as to a specific loan
or note secured by a deed of trust that the broker owns, is
authorized to negotiate, or is unconditionally obligated to buy.
   (2) All funds received by the broker from the purchasers or
lenders shall be handled in accordance with Section 10145 for
disbursement to the persons thereto entitled upon recordation of the
interests of the purchasers or lenders in the note and deed of trust.
No provision of this article shall be construed as modifying or
superseding applicable law regulating the escrow holder in any
transaction or the handling of the escrow account.
   (3) The books and records of the broker or servicing agent, or
both, shall be maintained in a manner that readily identifies
transactions under this article and the receipt and disbursement of
funds in connection with these transactions.
   (4) If required by paragraph (3) of subdivision (k), the review by
the independent certified public accountant shall include a sample
of transactions, as reflected in the records of the trust account
required pursuant to paragraph (1) of subdivision (k), and the bank
statements and supporting documents. These documents shall be
reviewed for compliance with this article with respect to the
handling and distribution of funds. The sample shall be selected at
random by the accountant from all these transactions and shall
consist of the following: (A) three sales made or 5 percent of the
sales made pursuant to this article during the period for which the
examination is conducted, whichever is greater, and (B) 10 payments
processed or 2 percent of payments processed under this article
during the period for which the examination is conducted, whichever
is greater.
   (5) For the purposes of this subdivision, the transaction that
constitutes a "sale" is the series of transactions by which a series
of notes of a maker, or the interests in the note of a maker, are
sold or issued to their various purchasers under this article,
including all receipts and disbursements in that process of funds
received from the purchasers or lenders. The transaction that
constitutes a "payment," for the purposes of this subdivision, is the
receipt of a payment from the person obligated on the note or from
some other person on behalf of the person so obligated, including the
broker or servicing agent, and the distribution of that payment to
the persons entitled thereto. If a payment involves an advance paid
by the broker or servicing agent as the result of a dishonored check,
the inspection shall identify the source of funds from which the
payment was made or, in the alternative, the steps that are
reasonably necessary to determine that there was not a disbursement
of trust funds. The accountant shall inspect for compliance with the
following specific provisions of this section: paragraphs (1), (2),
and (3) of subdivision (j) and paragraphs (1) and (2) of subdivision
(k).
   (6) Within 30 days of the close of the period for which the report
is made, or within any additional time as the commissioner may in
writing allow in a particular case, the accountant shall forward to
the broker or servicing agent, as the case may be, and to the
commissioner, the report of the accountant, stating that the
inspection was performed in accordance with this section, listing the
sales and the payments examined, specifying the nature of the
deficiencies, if any, noted by the accountant with respect to each
sale or payment, together with any further information as the
accountant may wish to include, such as corrective steps taken with
respect to any deficiency so noted, or stating that no deficiencies
were observed. If the broker meets the threshold criteria of Section
10232, the report of the accountant shall be submitted as part of the
quarterly reports required under Section 10232.25.
   (k) The notes or interests shall be sold subject to a written
agreement that obligates a licensed real estate broker, or a person
exempted from the licensing requirement for real estate brokers under
this chapter, to act as agent for the purchasers or lenders to
service the note or notes and deed of trust, including the receipt
and transmission of payments and the institution of foreclosure
proceedings in the event of a default. A copy of this servicing
agreement shall be delivered to each purchaser. The broker shall
offer to the lenders or purchasers the services of the broker or one
or more affiliates of the broker, or both, as servicing agent for
each transaction conducted pursuant to this article. The agreement
shall require all of the following:
   (1) (A) That payments received on the note or notes be deposited
immediately to a trust account maintained in accordance with this
section and with the provisions for trust accounts of licensed real
estate brokers contained in Section 10145 and Article 15 (commencing
with Section 2830.1) of Chapter 6 of Title 10 of the California Code
of Regulations.
   (B) That payments deposited pursuant to subparagraph (A) shall not
be commingled with the assets of the servicing agent or used for any
transaction other than the transaction for which the funds are
received.
   (2) That payments received on the note or notes shall be
transmitted to the purchasers or lenders pro rata according to their
respective interests within 25 days after receipt thereof by the
agent. If the source for the payment is not the maker of the note,
the agent shall inform the purchasers or lenders in writing of the
source for payment. A broker or servicing agent who transmits to the
purchaser or lenders the broker's or servicing agent's own funds to
cover payments due from the borrower but unpaid as a result of a
dishonored check may recover the amount of the advances from the
trust fund when the past due payment is received. However, this
article does not authorize the broker, servicing agent, or any other
person to issue, or to engage in any practice constituting, any
guarantee or to engage in the practice of advancing payments on
behalf of the borrower.
   (3) If the broker or person who is or becomes the servicing agent
for notes or interests sold pursuant to this article upon which the
payments due during any period of three consecutive months in the
aggregate exceed one hundred twenty-five thousand dollars ($125,000)
or the number of persons entitled to the payments exceeds 120, the
trust account or accounts of that broker or affiliate shall be
inspected by an independent certified public accountant at no less
than three-month intervals during the time the volume is maintained.
Within 30 days after the close of the period for which the review is
made, the report of the accountant shall be forwarded as provided in
paragraph (6) of subdivision (j). If the broker is required to file
an annual report pursuant to subdivision (o) or pursuant to Section
10232.2, the quarterly report pursuant to this subdivision need not
be filed for the last quarter of the year for which the annual report
is made. For the purposes of this subdivision, an affiliate of a
broker is any person controlled by, controlling, or under common
control with the broker.
   (4) Unless the servicing agent will receive notice pursuant to
Section 2924b of the Civil Code, the servicing agent shall file a
written request for notice of default upon any prior encumbrances and
promptly notify the purchasers or lenders of any default on the
prior encumbrances or on the note or notes subject to the servicing
agreement.
   (5) The servicing agent shall promptly forward copies of the
following to each purchaser or lender:
   (A) Any notice of trustee sale filed on behalf of the purchasers
or lenders.
   (B) Any request for reconveyance of the deed of trust received on
behalf of the purchasers or lenders.
   (  l  ) The broker shall disclose in writing to each
purchaser or lender the material facts concerning the transaction on
a disclosure form adopted or approved by the commissioner pursuant to
Section 10232.5, subject to the following:
   (1) The disclosure form shall include a description of the terms
upon which the note and deed of trust are being sold, including the
terms of the undivided interests being offered therein, including the
following:
   (A) In the case of the sale of an existing note:
   (i) The aggregate sale price of the note.
   (ii) The percent of the premium over or discount from the
principal balance plus accrued but unpaid interest.
   (iii) The effective rate of return to the purchasers if the note
is paid according to its terms.
   (iv) The name and address of the escrow holder for the
transaction.
   (v) A description of, and the estimated amount of, each cost
payable by the seller in connection with the sale and a description
of, and the estimated amount of, each cost payable by the purchasers
in connection with the sale.
   (B) In the case of the origination of a note:
   (i) The name and address of the escrow holder for the transaction.

   (ii) The anticipated closing date.
   (iii) A description of, and the estimated amount of, each cost
payable by the borrower in connection with the loan and a description
of, and the estimated amount of, each cost payable by the lenders in
connection with the loan.
   (C) In the case of a transaction involving a note or interest
secured by more than one parcel of real property, in addition to the
requirements of subparagraphs (A) and (B):
   (i) The address, description, and estimated fair market value of
each property securing the loan.
   (ii) The amount of the available equity in each property securing
the loan after the loan amount to be apportioned to each property is
assigned.
   (iii) The loan to value percentage for each property after the
loan amount to be apportioned to each property is assigned pursuant
to subdivision (h).
   (2) A copy of the written statement or information contained
therein, as required by paragraph (2) of subdivision (h), shall be
included in the disclosure form.
   (3) Any interest of the broker or affiliate in the transaction, as
described in subdivision (e), shall be included with the disclosure
form.
   (4) When the particular circumstances of a transaction make
information not specified in the disclosure form material or
essential to keep the information provided in the form from being
misleading, and the other information is known to the broker, the
other information shall also be provided by the broker.
   (5) If more than one parcel of real property secures the notes or
interests, the disclosure form shall also fully disclose any risks to
investors associated with securing the notes or interests with
multiple parcels of real property.
   (m) The broker or servicing agent shall furnish any purchaser of a
note or interest, upon request, with the names and addresses of the
purchasers of the other notes or interests in the loan.
   (n) No agreement in connection with a transaction covered by this
article shall grant to the real estate broker, the servicing agent,
or any affiliate of the broker or agent the option or election to
acquire the interests of the purchasers or lenders or to acquire the
real property securing the interests. This subdivision shall not
prohibit the broker or affiliate from acquiring the interests, with
the consent of the purchasers or lenders whose interests are being
purchased, or the property, with the written consent of the
purchasers or lenders, if the consent is given at the time of the
acquisition.
   (o) Each broker who conducts transactions under this article, or
broker or person who becomes the servicing agent for notes or
interest sold pursuant to this article, who meets the criteria of
paragraph (3) of subdivision (k) shall file with the commissioner an
annual report of a review of its trust account. The report shall be
prepared and filed in accordance with subdivision (a) of Section
10232.2 and the rules and procedures thereunder of the commissioner.
That report shall cover the broker's transactions under this article
and, if the broker also meets the threshold criteria set forth in
Section 10232, the broker's transactions subject to that section
shall be included as well.
   (p) Each broker conducting transactions pursuant to this article,
or broker or person who becomes the servicing agent for notes or
interest sold pursuant to this article, who meets the criteria of
paragraph (3) of subdivision (k) shall file with the commissioner a
report of the transactions that is prepared in accordance with
subdivision (c) of Section 10232.2. If the broker also meets the
threshold criteria of Section 10232, the report shall include the
transactions subject to that section as well. This report shall be
confidential pursuant to subdivision (f) of Section 10232.2.
  SEC. 12.  Article 6.5 (commencing with Section 10239) of Chapter 3
of Part 1 of Division 4 of the Business and Professions Code, as
added by Chapter 791 of the Statutes of 1963, is repealed.
  SEC. 13.  Section 10239.4 of the Business and Professions Code, as
added by Section 2 of Chapter 901 of the Statutes of 2003, is
repealed.
  SEC. 14.  Section 1808.51 is added to the Vehicle Code, to read:
   1808.51.  Notwithstanding Section 1808.5, the Department of Real
Estate, as a department, individually, or through its staff, may
obtain copies of fullface engraved pictures or photographs of
individuals directly from the Department of Motor Vehicles, for the
purposes                                             of enforcing the
Real Estate Law (Part 1 (commencing with Section 10000) of Division
4 of the Business and Professions Code) or the Subdivided Lands Law
(Chapter 1 (commencing with Section 11000) of Part 2 of Division 4 of
the Business and Professions Code).
  SEC. 15.  The Legislature finds and declares that Section 4 of this
act imposes a limitation on the public's right of access to the
meetings of public bodies or the writings of public officials and
agencies within the meaning of Section 3 of Article I of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:
   In order to allow the Department of Real Estate to fully
accomplish its goals, it is imperative to protect the interests of
those persons submitting information to the department to ensure that
any personal or sensitive business information that this act
requires those persons to submit is protected as confidential
information.
  SEC. 16.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.