BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 269|
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UNFINISHED BUSINESS
Bill No: SB 269
Author: Hill (D)
Amended: 8/30/13
Vote: 27
SENATE BUSINESS, PROF. & ECON. DEV. COMM .: 10-0, 4/1/13
AYES: Price, Emmerson, Block, Corbett, Galgiani, Hernandez,
Hill, Padilla, Wyland, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 36-0, 4/18/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen,
Price, Roth, Steinberg, Walters, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Padilla, Pavley, Vacancy, Vacancy
ASSEMBLY FLOOR : Not available
SUBJECT : Prepaid rental listing service
SOURCE : Author
DIGEST : This bill expands the enforcement powers of the
Bureau of Real Estate (BRE) over prepaid rental listing services
(PRLS) licensees, authorizes consumers harmed by PRLS providers
to seek compensation from the Consumer Recovery Account (CRA),
increases application fees for the PRLS license to better fund
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the CRA, and requires licensees to provide prospective clients
with a written notice of the consumer's rights.
Assembly Amendments (1) delete previous provisions related to
findings and declarations, definition of PRLS, and restrictions
on engaging in the business of PRLS; (2) add BRE to the list of
governmental entities that may issue a citation to an unlicensed
or unregistered individual advertising professional services in
a telephone directory; (3) grant cite and fine authority to BRE,
as specified; (4) increase the PRLS license application fee; (5)
require a portion of application fees be credited to the CRA;
(6) require a PRLS licensee to include their license number in
the written contract offered to a prospective tenant; (7)
require PRLS license holders to pay, as specified, an additional
$1 fee; (8) authorize consumers of PRLS to file an application
with BRE for payment of final court judgments or arbitration
awards from the CRA; (9) require automatic suspension of PRLS
license, as specified; and (10) make other technical and
clarifying changes.
ANALYSIS :
Existing law:
1.Provides, under the Real Estate Law, for the regulation and
licensing of PRLS by the Real Estate Commissioner
(Commissioner). Prohibits a person from engaging in the
business of PRLS unless licensed in that capacity or licensed
as a real estate broker.
2.Requires a person offering PRLS to either hold a real estate
broker's license or a PRLS license issued by the Bureau of
Real Estate (BRE).
3.Requires a PRLS licensee to maintain a $10,000 corporate
security bond or cash deposit in an account assigned to the
BRE Commissioner.
4.Requires PRLS licensees to pass a background check, pay an
application fee of $100, plus $25 for each branch location at
which the PRLS services will be offered.
5.Requires a PRLS provider, prior to accepting a fee, to offer a
written contract specifying the name, address, and telephone
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number of the provider, acknowledgement of receipt of the
amount of the fee, a description of the service to be
provided, and the prospective tenant's specifications for the
rental property.
6.Requires a licensee to fully refund a prospective tenant if
within five days of executing the contract the licensee has
not provided at least three currently available properties
that meet the prospective tenant's specifications, unless the
tenant obtains a rental through the licensee's services.
7.Requires a licensee to refund any charge above $50 if the
prospective tenant obtains a rental that is not through the
services of the licensee during the period of the contract, or
does not find a rental during the period of the contract, so
long as the prospective tenant requests the refund within 10
days after the end of the contract period.
This bill:
1.Authorizes BRE to issue a citation containing an order of
correction to an unlicensed individual for advertising
professional services in a telephone directory, which may
include a requirement that the cited individual cease
advertising in a telephone directory and a request for the
disconnection of the violator's telephone service, as
specified.
2.Grants cite and fine authority to the Commissioner as
specified to punish the unlicensed or improper provision of
PRLS, which includes the power to impose an administrative
fine not to exceed $2,500 to be deposited in the CRA.
3.Increases the application fee for the PRLS license from $100
to $125 for the first location, and from $25 to $50 for each
subsequent location and to add or eliminate additional
locations.
4.Requires $25 of each application fee to be credited to the
CRA.
5.Requires a PRLS licensee to include his/her license number in
the written contract offered to a prospective tenant.
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6.Requires PRLS licensees to provide to the prospective tenant,
prior to accepting a fee, with a written notice in 12-point
font enumerating the prospective tenant's rights under
existing law, as specified.
7.Requires every person holding a PRLS license, when obtaining
or renewing a license anytime within two years after the
balance of the CRA drops below $200,000, to pay an additional
fee of $1 to fund the CRA. The fee shall be paid into the
State Treasury and credited to the CRA.
8.Authorizes consumers harmed by a PRLS licensee to file an
application with BRE for payment of a final court judgment or
arbitration award from the Account.
9.Requires the automatic suspension of a PRLS license if any
payment is made from the CRA in settlement of a claim or
toward satisfaction of a judgment against a licensee; further
requires full repayment with interest of that amount before a
license can be reinstated.
10.Makes other technical and clarifying changes.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee, minor and
absorbable costs within existing DRE resources.
SUPPORT : (Verified 9/12/13)
Apartment Association, California Southern Cities
California Apartment Association
California Rural Legal Assistance, Inc.
East Bay Rental Housing Association
Nor Cal Rental Property Association
Western Center on Law and Poverty
ARGUMENTS IN SUPPORT : According to the author, "A tight
rental housing market is one of the many consequences of
California's foreclosure crisis. Either because they lost their
home to foreclosure or short sale, or because the home they were
renting was foreclosed upon, many individuals and families are
being forced to, or are choosing to, look for rental housing.
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Unfortunately, the high demand for rental properties has created
a market ripe for prepaid rental listing service scams. In
recent months, there have been press reports in various regions
of the state, documenting some of the abuses, and BRE has issued
a Consumer Fraud Alert and Warning, hoping to encourage
consumers to check out their rental list providers, before
paying for services."
MW:nl 9/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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