Amended in Assembly August 30, 2013

Amended in Assembly June 27, 2013

Senate Bill No. 269

Introduced by Senator Hill

February 14, 2013

An act to amend begin delete 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, end delete begin insert Sections 149, 10080.9, 10167.3, 10167.9, 10470, 10471, and 10475 of, and to add Section 10167.95 to, end insert the Business and Professions Code, relating to real estate begin insert , and making an appropriation therefor end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 269, as amended, Hill. Prepaid rental listing service.

begin insert

Existing law authorizes specified state agencies to issue a citation including an order of correction, as specified, if, upon investigation, the agency has probable cause to believe that a person is advertising services in a telephone directory without being properly licensed or registered to offer or perform those services.

end insert begin insert

This bill would authorize the Bureau of Real Estate to issue those citations.

end insert

The Real Estate Law provides for the licensure and regulation 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 service unless licensed in that capacity or licensed as a real estate broker. A willful violation of these provisions is a crime.

begin delete

This bill would prohibit the department from issuing a prepaid rental listing service license. 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

end delete begin insert

Existing law authorizes the commissioner, or his or her designated representative, to issue a citation to a person who does not possess a real estate license if the commissioner has cause to believe that the person is engaged or has engaged in activities for which a license is required.

end insert begin insert

This bill would additionally authorize a citation to be issued for a person who does not possess a prepaid rental listing service license or a real estate broker license if the commissioner has cause to believe that the person is engaged or has engaged in activities for which a license is required.

end insert begin insert

Existing law requires a $100 fee for an application for a license as a prepaid rental listing service for the first location, and a $25 fee for each additional location. Existing law imposes additional fees for obtaining or renewing a broker license or salesperson license when, on June 30 of any year, the balance remaining in the Consumer Recovery Account, a continuously appropriated account in the Real Estate Fund, is less than $200,000, and for 4 years thereafter.

end insert begin insert

This bill would increase those application fees to $125 and $50, respectively. The bill would require $25 of each application fee to be credited to the Consumer Recovery Account. The bill would also impose an additional fee of $1 on every person obtaining or renewing a prepaid rental listing service license for 2 years after the balance in that account is less than $200,000. By increasing the amount of moneys that may be deposited into the Consumer Recovery Account, this bill would make an appropriation.

end insert begin insert

Existing law requires a prepaid rental listing service licensee to offer the prospective tenant a written contract prior to the acceptance of a fee. The contract must include, among other things, the licensee’s name.

end insert begin insert

This bill would also require the contract to include the licensee’s license number.

end insert

begin insert The end insert bill would also require a specified written notice about refunds to be provided to the prospective tenant prior to the acceptance of a fee. Because a willful violation of these provisions would be a crime, this bill would impose a state-mandated local program. The bill also would make related begin delete changes, including deleting provisions that pertain to prepaid rental listing service licensure. end delete begin insert changes. end insert

begin insert

Existing law authorizes an aggrieved person, who obtains a final judgment, including a criminal restitution order, or an arbitration award based on a defendant’s acts for which a real estate license was required, to apply to the bureau for payment from the Consumer Recovery Act, as specified. Existing law requires the license of a broker or salesperson to be automatically suspended when the commissioner pays from the Consumer Recovery Account any amount in the settlement of a claim or toward the satisfaction of a judgment against that broker or salesperson.

end insert begin insert

This bill would additionally apply those provisions to the license of a prepaid rental listing service licensee.

end insert

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:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin delete

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 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 supervision 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 licensee may provide a prepaid rental
listing service at any location where business is conducted under
the immediate supervision of 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.

end delete

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 149 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

149.  

(a) If, upon investigation, an agency designated in
subdivision (e) has probable cause to believe that a person is
advertising in a telephone directory with respect to the offering or
performance of services, without being properly licensed by or
registered with the agency to offer or perform those services, the
agency may issue a citation under Section 148 containing an order
of correction that requires the violator to do both of the following:

(1) Cease the unlawful advertising.

(2) Notify the telephone company furnishing services to the
violator to disconnect the telephone service furnished to any
telephone number contained in the unlawful advertising.

(b) This action is stayed if the person to whom a citation is
issued under subdivision (a) notifies the agency in writing that he
or she intends to contest the citation. The agency shall afford an
opportunity for a hearing, as specified in Section 125.9.

(c) If the person to whom a citation and order of correction is
issued under subdivision (a) fails to comply with the order of
correction after that order is final, the agency shall inform the
Public Utilities Commission of the violation and the Public Utilities
Commission shall require the telephone corporation furnishing
services to that person to disconnect the telephone service furnished
to any telephone number contained in the unlawful advertising.

(d) The good faith compliance by a telephone corporation with
an order of the Public Utilities Commission to terminate service
issued pursuant to this section shall constitute a complete defense
to any civil or criminal action brought against the telephone
corporation arising from the termination of service.

(e) Subdivision (a) shall apply to the following boards, bureaus,
committees, commissions, or programs:

(1) The Bureau of Barbering and Cosmetology.

(2) The Cemetery and Funeral Bureau.

(3) The Veterinary Medical Board.

(4) The Landscape Architects Technical Committee.

(5) The California Board of Podiatric Medicine.

(6) The Respiratory Care Board of California.

(7) The Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation.

(8) The Bureau of Security and Investigative Services.

(9) The Bureau of Automotive Repair.

(10) The California Architects Board.

(11) The Speech-Language Pathology and Audiology Board.

(12) The Board for Professional Engineers and Land Surveyors.

(13) The Board of Behavioral Sciences.

(14) The Structural Pest Control Board begin delete within the Department
of Pesticide Regulation end delete .

(15) The Acupuncture Board.

(16) The Board of Psychology.

(17) The California Board of Accountancy.

(18) The Naturopathic Medicine Committee.

(19) The Physical Therapy Board of California.

(20) The Bureau for Private Postsecondary Education.

begin insert

(21) The Bureau of Real Estate.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 10080.9 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

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, begin insert or that a person who
does not possess a prepaid rental listing service license or a real
estate broker license is engaged or has engaged in activities for
which a license is required pursuant to Section 10167.2, end insert 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 person cited, and the history of previous violations. A
citation issued and a fine assessed pursuant to this section, while
constituting discipline for a violation of the law, shall be in lieu
of other administrative discipline by the commissioner for the
offense or offenses cited, and the citation against and payment of
any fine by a licensee shall not be reported as disciplinary action
taken by the commissioner.

(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.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 10167.3 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

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 begin delete department end delete begin insert bureau end insert ,
shall be signed by the applicant, and shall be accompanied by a
one hundred begin delete dollar ($100) end delete begin insert twenty-five dollar ($125) end insert application
fee for the first location, and a begin delete twenty-five dollar ($25) end delete begin insert fifty dollar
($50) end insert 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 begin delete department. A
twenty-five dollar ($25) end delete begin insert bureau. A fifty dollar ($50) end insert application
fee for the remainder of a license term for each location to be added
shall accompany the application. begin insert Twenty-five dollars ($25) of each
application fee shall be credited to the Consumer Recovery
Account. end insert

(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.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 10167.9 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

10167.9.  

(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 begin insert and license number end insert of the licensee and the
addresses and telephone numbers 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
begin delete department end delete begin insert bureau end insert prior to use. Any modification of a form
previously filed with the begin delete department, end delete begin insert bureau, end insert including a change
in the name or business address of the licensee, shall also be filed
prior to use. The begin delete department end delete begin insert bureau end insert shall withhold the issuance
or renewal of a license until the begin delete department end delete begin insert bureau end insert 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 begin delete department end delete begin insert bureau end insert , the proposed modification shall be
deemed approved. If a proposed modification or contract provision
is disapproved, the begin delete department end delete begin insert bureau end insert shall communicate that
disapproval in writing to the licensee within 15 working days of
being filed with the begin delete department, end delete begin insert bureau, end insert 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.

begin delete SEC. 11. end delete
begin insert SEC. 5. end insert   

Section begin delete 10167.6 end delete begin insert 10167.95 end insert is added to the Business
and Professions Code, to read:

begin delete 10167.6. end delete
begin insert 10167.95. end insert   

Prior to the acceptance of a fee, and in addition to
the contract required pursuant to Section begin delete 10167.4 end delete begin insert 10167.9, end insert 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 Bureau of
Real Estate at 1-877-373-4542 or begin delete www.dre.ca.gov. end delete
begin insert www.bre.ca.gov. end insert

begin delete

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 address
and telephone number of the principal office or location of the
licensee 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. 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.

end delete

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 10470 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

10470.  

If, on June 30 of any year, the balance remaining in the
Consumer Recovery Account in the Real Estate Fund is less than
two hundred thousand dollars ($200,000), every licensed broker,
when obtaining or renewing any broker license within four years
thereafter, shall pay, in addition to the license fee, a fee of seven
dollars begin delete ($7), and end delete begin insert ($7); end insert every licensed salesperson, when obtaining
or renewing such license within four years thereafter, shall pay,
in addition to the license fee, a fee of four dollars ($4) begin insert ; and every
person holding a prepaid rental listing service license, when
obtaining or renewing that license within two years thereafter,
shall pay, in addition to the application fee, a fee of one dollar
($1) end insert . The fees from begin delete both broker and end delete begin insert the broker, end insert salesperson begin insert , and
prepaid rental listing service end insert licensees shall be paid into the State
Treasury and credited to the Consumer Recovery Account.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 10471 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

10471.  

(a) When an aggrieved person obtains (1) a final
judgment in a court of competent jurisdiction, including, but not
limited to, a criminal restitution order issued pursuant to
subdivision (f) of Section 1202.4 of the Penal Code or Section
3663 of Title 18 of the United States Code, or (2) an arbitration
award that includes findings of fact and conclusions of law
rendered in accordance with the rules established by the American
Arbitration Association or another recognized arbitration body,
and in accordance with Sections 1281 to 1294.2, inclusive, of the
Code of Civil Procedure where applicable, and where the
arbitration award has been confirmed and reduced to judgment
pursuant to Section 1287.4 of the Code of Civil Procedure, against
a defendant based upon the defendant’s fraud, misrepresentation,
or deceit, made with intent to defraud, or conversion of trust funds,
arising directly out of any transaction in which the defendant, while
licensed under this part, performed acts for which a real estate
license begin insert or a prepaid rental listing service license end insert was required,
the aggrieved person may, upon the judgment becoming final, file
an application with the begin delete Department end delete begin insert Bureau end insert of Real Estate for
payment from the Consumer Recovery Account, within the
limitations specified in Section 10474, of the amount unpaid on
the judgment that represents an actual and direct loss to the
claimant in the transaction. As used in this chapter, “court of
competent jurisdiction” includes the federal courts, but does not
include the courts of another state.

(b) The application shall be delivered in person or by certified
mail to an office of the begin delete department end delete begin insert bureau end insert not later than one year
after the judgment has become final.

(c) The application shall be made on a form prescribed by the
begin delete department, end delete begin insert bureau, end insert verified by the claimant, and shall include the
following:

(1) The name and address of the claimant.

(2) If the claimant is represented by an attorney, the name,
business address, and telephone number of the attorney.

(3) The identification of the judgment, the amount of the claim
and an explanation of its computation.

(4) A detailed narrative statement of the facts in explanation of
the allegations of the complaint upon which the underlying
judgment is based.

(5) (A) Except as provided in subparagraph (B), a statement
by the claimant, signed under penalty of perjury, that the complaint
upon which the underlying judgment is based was prosecuted
conscientiously and in good faith. As used in this section,
“conscientiously and in good faith” means that no party potentially
liable to the claimant in the underlying transaction was intentionally
and without good cause omitted from the complaint, that no party
named in the complaint who otherwise reasonably appeared capable
of responding in damages was dismissed from the complaint
intentionally and without good cause, and that the claimant
employed no other procedural means contrary to the diligent
prosecution of the complaint in order to seek to qualify for the
Consumer Recovery Account.

(B) For the purpose of an application based on a criminal
restitution order, all of the following statements by the claimant:

(i) The claimant has not intentionally and without good cause
failed to pursue any person potentially liable to the claimant in the
underlying transaction other than a defendant who is the subject
of a criminal restitution order.

(ii) The claimant has not intentionally and without good cause
failed to pursue in a civil action for damages all persons potentially
liable to the claimant in the underlying transaction who otherwise
reasonably appeared capable of responding in damages other than
a defendant who is the subject of a criminal restitution order.

(iii) The claimant employed no other procedural means contrary
to the diligent prosecution of the complaint in order to seek to
qualify for the Consumer Recovery Account.

(6) The name and address of the judgment debtor or, if not
known, the names and addresses of persons who may know the
judgment debtor’s present whereabouts.

(7) The following representations and information from the
claimant:

(A) That he or she is not a spouse of the judgment debtor nor a
personal representative of the spouse.

(B) That he or she has complied with all of the requirements of
this chapter.

(C) That the judgment underlying the claim meets the
requirements of subdivision (a).

(D) A description of searches and inquiries conducted by or on
behalf of the claimant with respect to the judgment debtor’s assets
liable to be sold or applied to satisfaction of the judgment, an
itemized valuation of the assets discovered, and the results of
actions by the claimant to have the assets applied to satisfaction
of the judgment.

(E) That he or she has diligently pursued collection efforts
against all judgment debtors and all other persons liable to the
claimant in the transaction that is the basis for the underlying
judgment.

(F) That the underlying judgment and debt have not been
discharged in bankruptcy, or, in the case of a bankruptcy
proceeding that is open at or after the time of the filing of the
application, that the judgment and debt have been declared to be
nondischargeable.

(G) That the application was mailed or delivered to the
begin delete department end delete begin insert bureau end insert no later than one year after the underlying
judgment became final.

(d) If the claimant is basing his or her application upon a
judgment against a salesperson, and the claimant has not obtained
a judgment against that salesperson’s employing broker, if any, or
has not diligently pursued the assets of that broker, the application
shall be denied for failure to diligently pursue the assets of all other
persons liable to the claimant in the transaction unless the claimant
can demonstrate, by clear and convincing evidence, either that the
salesperson was not employed by a broker at the time of the
transaction, or that the salesperson’s employing broker would not
have been liable to the claimant because the salesperson was acting
outside the scope of his or her employment by the broker in the
transaction.

(e) The application form shall include detailed instructions with
respect to documentary evidence, pleadings, court rulings, the
products of discovery in the underlying litigation, and a notice to
the applicant of his or her obligation to protect the underlying
judgment from discharge in bankruptcy, to be appended to the
application.

(f) An application for payment from the Consumer Recovery
Account that is based on a criminal restitution order shall comply
with all of the requirements of this chapter. For the purpose of an
application based on a criminal restitution order, the following
terms have the following meanings:

(1) “Judgment” means the criminal restitution order.

(2) “Complaint” means the facts of the underlying transaction
upon which the criminal restitution order is based.

(3) “Judgment debtor” means any defendant who is the subject
of the criminal restitution order.

begin delete

The amendments to this section made at the July 1997-98
Regular Session shall become operative July 1, 2000.

end delete

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 10475 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

10475.  

Should the commissioner pay from the Consumer
Recovery Account any amount in settlement of a claim or toward
satisfaction of a judgment against a licensed broker or salesperson
begin insert or a person holding a prepaid rental listing service license end insert , the
license of the broker or salesperson begin insert or prepaid rental listing service
licensee end insert shall be automatically suspended upon the date of payment
from the Consumer Recovery Account. No broker or salesperson
begin insert or prepaid rental listing service licensee end insert shall be granted
reinstatement until he or she has repaid in full, plus interest at the
prevailing legal rate applicable to a judgment rendered in any court
of this state, the amount paid from the Consumer Recovery
Account on his or her account. A discharge in bankruptcy shall
not relieve a person from the penalties and disabilities provided
in this chapter.

begin delete SEC. 18. end delete
begin insert SEC. 9. end insert   

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.