BILL ANALYSIS Ó
SB 510
Page 1
SENATE THIRD READING
SB 510 (Correa)
As Amended May 4, 2011
Majority vote
SENATE VOTE :39-0
BUSINESS & PROFESSIONS 9-0 BANKING &
FINANCE 11-0
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|Ayes:|Hayashi, Bill Berryhill, |Ayes:|Eng, Achadjian, Fletcher, |
| |Allen, Butler, Eng, | |Fuentes, Gatto, Harkey, |
| |Hagman, Hill, Ma, Smyth | |Roger Hernández, Lara, |
| | | |Morrell, Perea, Torres |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 15-1
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|Ayes:|Fuentes, Harkey, | | |
| |Blumenfield, Bradford, | | |
| |Charles Calderon, Campos, | | |
| |Davis, Dickinson, Hall, | | |
| |Hill, Lara, Nielsen, | | |
| |Norby, Solorio, Wagner | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Donnelly | | |
| | | | |
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SUMMARY : Establishes requirements for an individual to become a
real estate branch manager and authorizes the Commissioner of the
Department of Real Estate (DRE) to discipline a branch manager for
failure to supervise branch operations. Specifically, this bill :
1)Authorizes an employing real estate broker or corporate designated
broker officer to appoint a real estate broker licensee or real
estate sales licensee as a manager of a branch office or division
of the employing broker's or employing corporate designated broker
officer's real estate business and delegate to the appointed
manager the responsibility to oversee day-to-day operations,
supervise the licensed activities of licensees, and supervise
clerical staff employed in the branch office or division.
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2)Provides that nothing in this bill shall be construed to limit the
responsibilities of an employing broker or a corporate designated
broker officer who fails to exercise reasonable supervision and
control over the activities of the corporation.
3)Subjects a licensee accepting appointment as a manager to
disciplinary action, including suspension or revocation of the
appointee's license, for failure to properly supervise licensed
activity over which the appointee is given authority.
4)Requires any appointment made pursuant to this bill to be made by
means of a written contract in which the appointed manager accepts
the delegated responsibility. The appointing employing broker or
corporate designated broker officer must retain a copy of the
contract and send a notice to DRE, in a form approved by the
Commissioner of DRE, identifying the appointee and the branch
office or division the manager is appointed to supervise.
5)Provides that a licensee shall not be appointed as a manager if
any of the following apply:
a) The licensee holds a restricted license;
b) The licensee is or has been subject to an order of
debarment; or,
c) The licensee is a salesperson with less than two years of
full-time real estate experience within five years preceding
the appointment.
6)Requires the employing broker or corporate designated broker
officer to immediately notify the Commissioner of DRE in writing
whenever an appointment of a branch manager is terminated or
changed.
7)Becomes operative on July 1, 2012.
EXISTING LAW :
1)Defines a real estate salesperson as a natural person who, for
compensation or in expectation of compensation, is employed by a
licensed real estate broker to engage in one or more of the
activities for which a real estate license is required.
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2)Provides that the Commissioner of DRE may suspend or revoke the
license of a real estate broker licensee who fails to exercise
reasonable supervision over the activities of his or her
salespersons or who, as the officer designated by a corporate
broker licensee, fails to exercise reasonable supervision and
control over the activities of the corporation.
3)States that no violation of any of the provisions of the Real
Estate Law by a real estate salesperson or other employee of a
licensed real estate broker shall cause the revocation or
suspension of the license of the employing broker, unless it
appears upon a hearing by the Commissioner of DRE that the
employing broker had guilty knowledge of such violation.
Existing regulation requires real estate brokers to exercise
reasonable supervision over the activities of their salespersons, as
specified, and provides that a broker may use the services of
brokers and salespersons to assist in this task, as long as the
broker does not relinquish overall responsibility for supervising
the acts of salespersons licensed to the broker (DRE Regulation
2725).
FISCAL EFFECT : According to the Assembly Appropriations Committee,
costs associated with this legislation are minor and absorbable
within DRE resources.
COMMENTS : The Commissioner of DRE established a Broker Supervision
Task Force in 2009-2010 to evaluate challenges and related issues
pertaining to broker supervision. This bill enacts one of the task
force's recommendations.
In its September 2010 report, the task force explained, "Currently,
there are no license disciplinary consequences to any subordinate
licensee when supervisorial authority is delegated under the
provisions of Regulation 2725 for failure to properly supervise. It
was decided that legislation should be considered to provide a
multi-tiered operational structure that would hold a subordinate
supervisor delegate liable for proper supervision potentially along
with the designated officer or broker."
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916) 319-3301
FN: 0001665
SB 510
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