BILL ANALYSIS Ó
SB 53
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Date of Hearing: August 17, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 53 (Calderon and Vargas) - As Amended: June 15, 2011
Policy Committee: Business and
Professions Vote: 9 - 0
Banking and Finance 10 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill provides the Department of Real Estate (DRE) with
additional enforcement authority and establishes additional
protections for consumers relating to real estate licensees.
Specifically, this bill:
1)Provides that, in a case where a licensee ignores or refuses
to obey an order of the court or obey a subpoena, the
Commissioner of DRE may apply directly to the Superior Court
for the issuance of a court order requiring the licensee to
appear before the Commissioner to produce documentary evidence
or to give evidence regarding an investigation.
2)Grants authority to DRE to issue citations and/or citations
and fines, capped at $2,500 per violation, to licensees found
to have violated provisions of the Real Estate Law.
3)Requires, beginning July 1, 2012, a real estate broker who
engages in escrow activities for five or more transactions
within a year, as specified, or whose escrow activities equal
or exceed $1 million in a calendar year, to file with DRE a
report within 60 days providing certain information, as
specified.
4)Provides, beginning July 1, 2012, that the Commissioner may
delay renewal of a license pursuant to any acts specified
under current law for which the Commissioner may suspend,
revoke or deny the issuance of a license.
5)Requires a real estate broker to submit a copy of information
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in the real estate broker's transaction file relative to
securities qualification, or exemption from securities
qualification, pursuant to a transaction involving secured
notes on real property, to any investor from whom the real
estate broker obtains funds in connection with the transaction
or other provision of law pertaining to these types of
transactions, within 10 days of receipt of those funds.
Recasts and updates certain provisions and clarifies the
repeal of specified provisions relative to these transactions.
FISCAL EFFECT
Costs associated with this legislation are minor and absorbable
within existing DRE resources.
COMMENTS
1)Rationale . This bill is intended to give DRE more enforcement
tools and add safeguards to protect consumers who seek
services from real estate licensees. This bill also makes
technical changes intended to clean up certain portions of the
Real Estate Law.
Both the California Mortgage Association and the Escrow
Institute of California support the bill and note that it is
important to uphold consumer confidence in real estate
licensees.
2)Related Legislation . SB 706 (Price) makes numerous
enforcement enhancements to DRE and the Office of Real Estate
Appraisers (OREA); requires licensing boards to post
information about licensees on the Internet, as specified; and
makes updating and conforming changes. This bill is pending
in this committee.
AB 278 (Hill) authorizes the DRE Commissioner to promulgate
regulations authorizing the issuance of citations and fines to
DRE licensees and unlicensed persons engaging in activities
for which a real estate license is required. This bill is
pending on the Senate floor.
SB 53
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Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081