BILL NUMBER: SB 269 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 27, 2013
INTRODUCED BY Senator Hill
FEBRUARY 14, 2013
An act to amend and renumber Section 10167.9 of, to amend and
repeal Sections 10167.5, 10167.13, and 10167.16 of, to amend, repeal,
and add Sections 10167, 10167.2, and 10167.3 of, to repeal Sections
10167.4, 10167.7, 10167.8, and 10167.17 of, and to repeal and add
Section 10167.6 of, the Business and Professions Code, relating to
real estate.
LEGISLATIVE COUNSEL'S DIGEST
SB 269, as amended, Hill. Prepaid rental listing service.
The Real Estate Law provides for the licensure and
regulation and licensing of prepaid rental listing
services by the Real Estate Commissioner. Existing law prohibits a
person from engaging in the business of a prepaid rental
listing services service unless
licensed in that capacity or licensed as a real estate broker. A
willful violation of these provisions is a crime.
This bill would prohibit the department from issuing a prepaid
rental listing service license. This The
bill, beginning January 1, 2015, would prohibit a person from
engaging in that business unless the person is licensed as
a real estate broker or is licensed as a real estate
salesperson and is acting under the supervision of a real estate
broker . The bill would also require a specified written notice
about refunds to be provided to the provided to
the prospective tenant prior to the acceptance of a fee. Because
a willful violation of these provisio ns would be a
crime, this bill would impose a state-mandated local program.
The bill also would make related changes, including deleting
provisions that pertain to prepaid rental listing service
licensing licensure .
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: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares that requiring a
real estate license to lawfully provide prepaid rental listing
services serves the valid governmental purposes of public protection
and victims' compensation. The safeguards contained in this
legislation are intended to reduce the significant and unacceptably
large amounts of prepaid rental listing service fraud perpetrated
against unsuspecting, prospective tenants by persons who lack real
estate licenses. The safeguards in this bill will also permit persons
who may be harmed through prepaid rental listing service fraud to
seek compensation from the Consumer Recovery Account, a remedy which
is not available to persons who obtain prepaid rental listing
services through a person that does not hold a real estate license.
SEC. 2. Section 10167 of the Business and Professions Code is
amended to read:
10167. The definitions used in this section shall govern the
construction and terms as used in this article:
(a) "Prepaid rental listing service" means the business of
supplying prospective tenants with listings of residential real
properties for tenancy, by publication or otherwise, pursuant to an
arrangement under which the prospective tenants are required to pay
an advance or contemporaneous fee (1) specifically to obtain listings
or (2) to purchase any other product or service in order to obtain
listings, but which does not otherwise involve the negotiation of
rentals by the person conducting the service. "Prepaid rental listing
service" does not include the business of providing roommate
referral information designed to assist persons in locating a
roommate who meets various selection criteria related to the
prospective roommate's personal traits, characteristics, habits or
preferences, and selection criteria related to the residential real
property occupied by the prospective roommate.
(b) "Licensee" means a person licensed to conduct a prepaid rental
listing service or a person engaged in the business of a prepaid
rental listing service under a real estate broker license.
(c) "Location" means the place, other than the main or branch
office of a real estate broker, where a prepaid rental listing
service business is conducted.
(d) "Designated agent" means the person who is in charge of the
business of a prepaid rental listing service at a given location.
(e) "Fee" means the charge required by a licensee (1) to obtain
listings of residential real properties for tenancy or (2) to
purchase any other product or service in order to obtain listings.
(f) "Service charge" means the amount of the fee that a licensee
may retain if a prospective tenant finds housing through a source
other than the listings supplied by the licensee.
(g) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
SEC. 3. Section 10167 is added to the Business and Professions
Code, to read:
10167. The definitions used in this section shall govern the
construction and terms as used in this article:
(a) "Prepaid rental listing service" means the business of
supplying prospective tenants with listings of residential real
properties for tenancy, by publication or otherwise, pursuant to an
arrangement under which the prospective tenants are required to pay
an advance or contemporaneous fee (1) specifically to obtain listings
or (2) to purchase any other product or service in order to obtain
listings, but which does not otherwise involve the negotiation of
rentals by the person conducting the service. "Prepaid rental listing
service" does not include the business of providing roommate
referral information designed to assist persons in locating a
roommate who meets various selection criteria related to the
prospective roommate's personal traits, characteristics, habits or
preferences, and selection criteria related to the residential real
property occupied by the prospective roommate.
(b) "Licensee" means a person engaged in the business of a prepaid
rental listing service under a real estate broker
license.
(c) "Location" means the place, other than the main or branch
office of a real estate broker, where a prepaid rental listing
service business is conducted.
(d) "Designated agent" means the person who is in charge of the
business of a prepaid rental listing service at a given location.
(e) "Fee" means the charge required by a licensee (1) to obtain
listings of residential real properties for tenancy or (2) to
purchase any other product or service in order to obtain listings.
(f) "Service charge" means the amount of the fee that a licensee
may retain if a prospective tenant finds housing through a source
other than the listings supplied by the licensee.
(g) This section shall become operative on January 1, 2015.
SEC. 4. Section 10167.2 of the Business and Professions Code is
amended to read:
10167.2. (a) It is unlawful for any person to engage in the
business of a prepaid rental listing service unless licensed in that
capacity or unless licensed as a real estate broker.
(b) (1) The requirements of this article apply only to the
provision of listings of residential real properties for tenancy by
prepaid rental listing services. Except if expressly provided
otherwise in this article, the requirements of this article do not
apply to any other goods or services sold by a prepaid rental listing
service as long as the purchase of those goods or services is not
required to obtain those listings, and as long as the purchase of
those goods or services is not included in the same contract as the
contract to provide those listings, and as long as the contract to
provide those listings clearly specifies that the purchase of any
other goods and services is optional, and as long as the price
charged for any other goods and services is fair and reasonable.
(2) In an action alleging that the price charged for any other
goods and services is not fair and reasonable, the burden shall be on
the commissioner to demonstrate that the price charged unreasonably
exceeds the fee customarily charged for the same or comparable goods
or services in the community in which the prepaid rental listing
service operates. The fact that the price charged for goods or
services exceeds the cost incurred by the prepaid rental listing
service shall not render the price charged for the goods or services
to be unfair or unreasonable, so long as the price charged does not
unreasonably exceed the fee customarily charged for the same or
comparable goods or services in the community in which the prepaid
rental listing service operates.
(3) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
SEC. 5. Section 10167.2 is added to the Business and Professions
Code, to read:
10167.2. (a) It is unlawful for any person to engage in the
business of a prepaid rental listing service unless the person
is licensed as a real estate broker or is licensed as a
real estate salesperson and is acting under the super
vision of a real estate broker .
(b) (1) The requirements of this article apply only to the
provision of listings of residential real properties for tenancy by
prepaid rental listing services. Except if expressly provided
otherwise in this article, the requirements of this article do not
apply to any other goods or services sold by a prepaid rental listing
service as long as the purchase of those goods or services is not
required to obtain those listings, and as long as the purchase of
those goods or services is not included in the same contract as the
contract to provide those listings, and as long as the contract to
provide those listings clearly specifies that the purchase of any
other goods and services is optional, and as long as the price
charged for any other goods and services is fair and reasonable.
(2) In an action alleging that the price charged for any other
goods and services is not fair and reasonable, the burden shall be on
the commissioner to demonstrate that the price charged unreasonably
exceeds the fee customarily charged for the same or comparable goods
or services in the community in which the prepaid rental listing
service operates. The fact that the price charged for goods or
services exceeds the cost incurred by the prepaid rental listing
service shall not render the price charged for the goods or services
to be unfair or unreasonable, so long as the price charged does not
unreasonably exceed the fee customarily charged for the same or
comparable goods or services in the community in which the prepaid
rental listing service operates.
(c) This section shall become operative on January 1, 2015.
SEC. 6. Section 10167.3 of the Business and Professions Code is
amended to read:
10167.3. (a) A separate application for a license as a prepaid
rental listing service shall be made in writing for each location to
be operated by a licensee other than a real estate broker. Each
application shall be on forms provided by the department, shall be
signed by the applicant, and shall be accompanied by a one hundred
dollar ($100) application fee for the first location, and a
twenty-five dollar ($25) application fee for each additional location
of the applicant.
Applications to add or eliminate locations during the term of a
license shall be on forms prescribed by the department. A twenty-five
dollar ($25) application fee for the remainder of a license term for
each location to be added shall accompany the application.
(b) A real estate broker may provide a prepaid rental listing
service at a licensed office for the conduct of his or her real
estate brokerage business if the business at the office is conducted
under the immediate supervision of the broker or of a real estate
salesperson licensed to, and acting on behalf of, the broker.
(c) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
SEC. 7. Section 10167.3 is added to the Business and Professions
Code, to read:
10167.3. (a) A real estate broker licensee
may provide a prepaid rental listing service at a
licensed office for the conduct of his or her real estate brokerage
any location where business if the
business at the office is conducted under the immediate
supervision of the a broker or of a
real estate salesperson licensed to, and acting on behalf of, the
broker.
(b) This section shall become operative on January 1, 2015.
SEC. 8. Section 10167.4 of the Business and Professions Code is
repealed.
SEC. 9. Section 10167.5 of the Business and Professions Code is
amended to read:
10167.5. The business at a location licensed pursuant to
subdivision (a) of Section 10167.3 shall be conducted under the
immediate supervision of the licensee or a designated agent who is
not a designated agent at any other location. Whenever a designated
agent ceases permanently to be a designated agent at any location
because of death, termination of employment, or any other reason, the
licensee, within five days thereafter, shall give written notice to
the department. A license issued for a particular location shall
automatically expire 60 days after the time the business conducted at
such location ceases for any reason to be under the charge of and
managed by the designated agent of record with the department, unless
within such 60-day period the licensee submits written notice of the
new designated agent to the department.
A designated agent of the licensed service may serve as designated
agent for the location in question as well as for the location for
which he or she is the designated agent of record during the period
of 60 days.
This section shall remain in effect only until January 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2015, deletes or extends that date.
SEC. 10. Section 10167.6 of the Business and Professions Code is
repealed.
SEC. 11. Section 10167.6 is added to the Business and Professions
Code, to read:
10167.6. Prior to the acceptance of a fee, and in addition to the
contract required pursuant to Section 10167.4 a licensee shall
provide the prospective tenant with the following written notice, in
a type size of at least 12-point type:
YOU MAY BE ENTITLED TO A REFUND IF YOU DO NOT RECEIVE THE SERVICES
YOU HAVE BEEN PROMISED. COMPLETE TERMS AND CONDITIONS GOVERNING THE
REFUND TO WHICH YOU MAY BE ENTITLED ARE CONTAINED IN YOUR CONTRACT.
THE FOLLOWING IS A SIMPLIFIED SUMMARY OF SOME OF THE RIGHTS DESCRIBED
IN YOUR CONTRACT:
If (name of licensee) does not provide you with at least three
available rental properties meeting the specifications of your
contract within five days after you pay the fee charged by (name of
licensee), you are entitled to a full refund. To obtain this refund,
you must request it from (name of licensee) in writing within 15 days
of paying your fee.
If you do not obtain a rental through the services of (name of
licensee) during the term of your contract, you are entitled to a
refund of your fee, minus a service charge, which may not exceed ____
dollars ($____). To obtain this refund, you must provide (name of
licensee) with written documentation or a signed statement that you
obtained a rental without the assistance of (name of licensee) or
that you did not move. This documentation or signed statement must be
provided to (name of licensee) with a written request for refund,
within 10 days following the expiration of your contract.
If (name of licensee) fails to refund your money, as required by
your contract, you may sue (name of licensee) in a small claims
court. The court may award you the refund you failed to receive, plus
additional damages, up to $1,000.
If you wish to file a complaint about (name of licensee) or if you
cannot collect on a court award, you should contact the
Department Bureau of Real Estate at
1-877-373-4542 or www.dre.ca.gov.
SEC. 12. Section 10167.7 of the Business and Professions Code is
repealed.
SEC. 13. Section 10167.8 of the Business and Professions Code is
repealed.
SEC. 14. Section 10167.9 of the Business and Professions Code is
amended and renumbered to read:
10167.4. (a) Prior to the acceptance of a fee, a licensee shall
offer the prospective tenant a written contract, either on paper or
in electronic form, which shall include at least the following:
(1) The name and license number of the licensee and the
addresses address and telephone numbers
number of the principal office or location of
the licensee and of the location, or branch office of a real
estate broker, providing the listing to the prospective
tenant.
(2) Acknowledgment of receipt of the fee, including the amount.
(3) A description of the service to be performed by the licensee,
including significant conditions, restrictions, and limitations where
applicable.
(4) The prospective tenant's specifications for the rental
property, including, but not limited to:
(A) Type of structure, including, but not limited to, detached
single-family home, apartment, or duplex.
(B) Location by commonly accepted residential area name, by
designation of boundary streets, or by any other manner affording a
reasonable means of identifying locations acceptable to the
prospective tenant.
(C) Furnished or unfurnished.
(D) Number of bedrooms required.
(E) Maximum acceptable monthly rental.
(5) The contract expiration date, which shall not be later than 90
days from the date of execution of the contract.
(6) A clause setting forth the right to a full or partial refund
of the fee paid as provided in Section 10167.10.
(7) The signature and printed full name of the licensee
or of the designated agent, real estate salesperson, or employee
acting on behalf of the licensee . The signature of any
person, including any signature required by the terms of the contract
to be provided by the prospective tenant, may be provided in any
electronic form that provides a reasonable method of indicating that
the individual whose signature is required authorized the contract to
be signed in that electronic form.
(8) A clause in bold type letters outlining the small claims court
remedy available to the prospective tenant.
(9) A clause in boldface type letters clearly stating that the
purchase of any goods and services other than the provision of
listings of residential real properties for tenancy is optional.
(b) (1) The original of each contract, any separate contracts for
required goods or services, refund claims, receipts and any other
relevant documents shall be retained by the licensee for a period of
not less than three years from the date of termination of the
contract during which time the contract shall be subject to
examination by a duly authorized representative of the commissioner.
Any records retained pursuant to this subdivision that are stored in
the ordinary course of business in digital media shall, upon request
of a duly authorized representative of the commissioner, be provided
on diskette, CD-ROM or similar portable digital storage medium. For
purposes of this subdivision, the "original" of a contract executed
in electronic form shall be either the copy of the contract stored in
digital media or a paper printout of that contract.
(2) Any licensee, or employee thereof, shall dispose of the
documents required to be kept pursuant to paragraph (1) by shredding
or other appropriate means so that the identity of the prospective
tenant may not be determined from the disposed information alone or
in combination with other publicly available information.
(c) The form of contract proposed to be used by a licensee to
effect compliance with this section shall be filed with the
department prior to use. Any modification of a form previously filed
with the department, including a change in the name or business
address of the licensee, shall also be filed prior to use. The
department shall withhold the issuance or renewal of a license until
the department has approved the contract. If a proposed modification
to a contract has not been approved or disapproved within 15 working
days of being filed with the department, the proposed modification
shall be deemed approved. If a proposed modification or contract
provision is disapproved, the department shall communicate that
disapproval in writing to the licensee within 15 working days of
being filed with the department, accompanied by a written
justification of why the modification or contract provision is
contrary to the requirements of this article.
(d) Notwithstanding any other provision of law, a contract for
prepaid rental listing services executed in electronic form, and
signed in any electronic form that provides a reasonable method of
indicating that the individual whose signature is required authorized
the contract to be signed in electronic form, shall be valid to the
same extent as an executed written contract. Upon request by the
customer, the licensee shall deliver an executed paper copy to the
customer within five working days of receiving the request.
SEC. 15. Section 10167.13 of the Business and Professions Code is
amended to read:
10167.13. (a) A prepaid rental listing service license issued by
the department shall be for a period of two years. An application and
fee for renewal filed with the department before midnight of the
last day of the period for which a previous license was issued
entitles the licensee to continue operating at all locations
specified in the previous license for which a renewal fee is paid.
(b) On and after January 1, 2014, the department shall not issue a
prepaid rental listing service license.
(c) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
SEC. 16. Section 10167.16 of the Business and Professions Code is
amended to read:
10167.16. (a) A person or corporation licensed pursuant to this
article and not engaging in acts for which a real estate license is
required under Article 1 (commencing with Section 10130) of Chapter 3
of Part 1 of Division 4, shall be subject, in addition to the
provisions of this article, to the provisions of Chapter 1
(commencing with Section 10000) and Chapter 2 (commencing with
Section 10050) of Part 1 of Division 4, and to Sections 10450, 10452,
10453, and 10454.
(b) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
SEC. 17. Section 10167.17 of the Business and Professions Code is
repealed.
SEC. 18. 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.