AB 685, as amended, Irwin. Real estate: licensees.
Under existing law, if the Real Estate Commissioner has cause to believe that a person who does not have a real estate license is engaged in activities for which a license is required, he or she may issue a citation to that person which may include an administrative fine. Existing law prohibits the commissioner from renewing the license of a person who has failed to comply with the terms of a citation or to pay an outstanding fine.
This bill would also prohibit the commissioner from issuing a license to a person who has failed to comply with the terms of a citation or to pay an outstanding fine.
Existing law authorizes the commissioner to suspend or revoke the license of a real estate licensee if he or she has engaged in specified activities or has had a license issued by another agency, another state, or the federal government revoked or suspended for engaging in those activities, if specified conditions are met.
This bill would also authorize the commissioner to suspend or revoke the license of a real estate licensee who surrendered a licensed issued by another agency, another state, or the federal government. The bill would also authorize the commissioner to suspend or revoke the license of a licensee for failure to surrender a license that was issued in error or by mistake.
Existing law requires real estate licensees to report the bringing of an indictment or information charging a felony against the licensee. A willful or knowing violation of this requirement is punishable by a fine and imprisonment.
This bill would also require a licensee to report thebegin delete filingend deletebegin insert
bringingend insert ofbegin delete anend deletebegin insert aend insert criminal complaint charging a felony against the licensee to the Bureau of Real Estate. Because the bill would change the definition of a crime, it would impose a state-mandated local program.
The bill would also make other nonsubstantive changes.
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: yes.
The people of the State of California do enact as follows:
Section 10080.9 of the Business and Professions
2Code is amended to read:
(a) If, upon inspection, examination, or investigation,
4the commissioner has cause to believe that a person who does not
5possess a real estate license is engaged or has engaged in activities
6for which a real estate license is required, or that a person who
7does not possess a prepaid rental listing service license or a real
8estate broker license is engaged or has engaged in activities for
9which a license is required pursuant to Section 10167.2, or that a
10licensee is violating or has violated any provision of this division
11or any rule or order thereunder, the commissioner or his or her
12designated representative may issue a citation to that person in
13writing, describing with particularity the basis of the citation. Each
14citation may contain an order to
correct the violation or violations
15identified and a reasonable time period or periods by which the
16violation or violations must be corrected. In addition, each citation
17may assess an administrative fine not to exceed two thousand five
18hundred dollars ($2,500), that shall be deposited into the Recovery
19Account of the Real Estate Fund and shall, upon appropriation by
P3 1the Legislature, be available for expenditure for the purposes
2specified in Chapter 6.5 (commencing with Section 10470). In
3assessing a fine, the commissioner shall give due consideration to
4the appropriateness of the amount of the fine with respect to factors
5such as the gravity of the violation, the good faith of the person
6cited, and the history of previous violations. A citation issued and
7a fine assessed pursuant to this section, while constituting discipline
8for a violation of the law, shall be in lieu of other administrative
9
discipline by the commissioner for the offense or offenses cited,
10and the citation against and payment of any fine by a licensee shall
11not be reported as disciplinary action taken by the commissioner.
12(b) Notwithstanding subdivision (a), nothing in this section shall
13prevent the commissioner from issuing an order to desist and
14refrain from engaging in a specific business activity or activities
15or an order to suspend all business operations to a person who is
16engaged in or has engaged in continued or repeated violations of
17this part. In any of these circumstances, the sanctions authorized
18under this section shall be separate from, and in addition to, all
19other administrative, civil, or criminal penalties.
20(c) If, within 30 days from the receipt of the citation or the
21citation and
fine, the person cited fails to notify the commissioner
22that he or she intends to request a hearing as described in
23subdivision (d), the citation or the citation and fine shall be deemed
24final.
25(d) Any hearing under this section shall be conducted in
26accordance with Chapter 5 (commencing with Section 11500) of
27Part 1 of Division 3 of Title 2 of the Government Code.
28(e) After the exhaustion of the review procedures provided for
29in this section, the commissioner may apply to the appropriate
30superior court for a judgment in the amount of any administrative
31penalty imposed pursuant to subdivision (a) and an order
32compelling the person cited to comply with the order of the
33commissioner. The application, which shall include a certified
34copy of the final order of the commissioner,
shall constitute a
35sufficient showing to warrant issuing the judgment and order.
36(f) Failure of any person to comply with the terms of a citation
37or pay a fine assessed pursuant to this section, within a reasonable
38period specified by the commissioner, shall subject that person to
39disciplinary action by the commissioner. In no event may a license
P4 1be issued or renewed if an unpaid fine remains outstanding or the
2terms of a citation have not been complied with.
Section 10177 of the Business and Professions Code
4 is amended to read:
The commissioner may suspend or revoke the license
6of a real estate licensee, delay the renewal of a license of a real
7estate licensee, or deny the issuance of a license to an applicant,
8who has done any of the following, or may suspend or revoke the
9license of a corporation, delay the renewal of a license of a
10corporation, or deny the issuance of a license to a corporation, if
11an officer, director, or person owning or controlling 10 percent or
12more of the corporation’s stock has done any of the following:
13(a) Procured, or attempted to procure, a real estate license or
14license renewal, for himself or herself or a salesperson, by fraud,
15misrepresentation, or deceit, or by making a material misstatement
16of
fact in an application for a real estate license, license renewal,
17or reinstatement.
18(b) Entered a plea of guilty or no contest to, or been found guilty
19of, or been convicted of, a felony, or a crime substantially related
20to the qualifications, functions, or duties of a real estate licensee,
21and the time for appeal has elapsed or the judgment of conviction
22has been affirmed on appeal, irrespective of an order granting
23probation following that conviction, suspending the imposition of
24sentence, or of a subsequent order under Section 1203.4 of the
25Penal Code allowing that licensee to withdraw his or her plea of
26guilty and to enter a plea of not guilty, or dismissing the accusation
27or information.
28(c) Knowingly authorized, directed, connived at, or aided in the
29publication,
advertisement, distribution, or circulation of a material
30false statement or representation concerning his or her designation
31or certification of special education, credential, trade organization
32membership, or business, or concerning a business opportunity or
33a land or subdivision, as defined in Chapter 1 (commencing with
34Section 11000) of Part 2, offered for sale.
35(d) Willfully disregarded or violated the Real Estate Law (Part
361 (commencing with Section 10000)) or Chapter 1 (commencing
37with Section 11000) of Part 2 or the rules and regulations of the
38commissioner for the administration and enforcement of the Real
39Estate Law and Chapter 1 (commencing with Section 11000) of
40Part 2.
P5 1(e) Willfully used the term “realtor” or a trade name or insignia
2of membership in a real
estate organization of which the licensee
3is not a member.
4(f) Acted or conducted himself or herself in a manner that would
5have warranted the denial of his or her application for a real estate
6license, or either had a license denied or had a license issued by
7another agency of this state, another state, or the federal
8government revoked, surrendered, or suspended for acts that, if
9done by a real estate licensee, would be grounds for the suspension
10or revocation of a California real estate license, if the action of
11denial, revocation, surrender, or suspension by the other agency
12or entity was taken only after giving the licensee or applicant fair
13notice of the charges, an opportunity for a hearing, and other due
14process protections comparable to the Administrative Procedure
15Act (Chapter 3.5 (commencing with Section 11340), Chapter 4
16
(commencing with Section 11370), and Chapter 5 (commencing
17with Section 11500) of Part 1 of Division 3 of Title 2 of the
18Government Code), and only upon an express finding of a violation
19of law by the agency or entity.
20(g) Demonstrated negligence or incompetence in performing
21an act for which he or she is required to hold a license.
22(h) As a broker licensee, failed to exercise reasonable
23supervision over the activities of his or her salespersons, or, as the
24officer designated by a corporate broker licensee, failed to exercise
25reasonable supervision and control of the activities of the
26corporation for which a real estate license is required.
27(i) Used his or her employment by a governmental agency in a
28capacity giving access
to records, other than public records, in a
29manner that violates the confidential nature of the records.
30(j) Engaged in any other conduct, whether of the same or a
31different character than specified in this section, that constitutes
32fraud or dishonest dealing.
33(k) Violated any of the terms, conditions, restrictions, and
34
limitations contained in an order granting a restricted license.
35(l) (1) Solicited or induced the sale, lease, or listing for sale or
36lease of residential property on the ground, wholly or in part, of
37loss of value, increase in crime, or decline of the quality of the
38schools due to the present or prospective entry into the
39neighborhood of a person or persons having a characteristic listed
40in subdivision (a) or (d) of Section 12955 of the Government Code,
P6 1as those characteristics are defined in Sections 12926 and 12926.1,
2subdivision (m) and paragraph (1) of subdivision (p) of Section
312955, and Section 12955.2 of the Government Code.
4(2) Notwithstanding paragraph (1), with respect to familial
5status, paragraph (1) shall not be construed to apply to
housing for
6older persons, as defined in Section 12955.9 of the Government
7Code. With respect to familial status, nothing in paragraph (1)
8shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11,
9and 799.5 of the Civil Code, relating to housing for senior citizens.
10Subdivision (d) of Section 51 and Section 4760 of the Civil Code
11and subdivisions (n), (o), and (p) of Section 12955 of the
12Government Code shall apply to paragraph (1).
13(m) Violated the Franchise Investment Law (Division 5
14(commencing with Section 31000) of Title 4 of the Corporations
15Code) or regulations of the Commissioner of Corporations
16pertaining thereto.
17(n) Violated the Corporate Securities Law of 1968 (Division 1
18(commencing with Section 25000) of Title 4 of the Corporations
19Code) or the
regulations of the Commissioner of Corporations
20pertaining thereto.
21(o) Failed to disclose to the buyer of real property, in a
22transaction in which the licensee is an agent for the buyer, the
23nature and extent of a licensee’s direct or indirect ownership
24interest in that real property. The direct or indirect ownership
25interest in the property by a person related to the licensee by blood
26or marriage, by an entity in which the licensee has an ownership
27interest, or by any other person with whom the licensee has a
28special relationship shall be disclosed to the buyer.
29(p) Violated Article 6 (commencing with Section 10237).
30(q) Violated or failed to comply with Chapter 2 (commencing
31with Section 2920) of Title 14 of Part 4 of
Division 3 of the Civil
32Code, related to mortgages.
33(r) Failure to surrender a license that was issued in error or by
34mistake.
35If a real estate broker that is a corporation has not done any of
36the foregoing acts, either directly or through its employees, agents,
37officers, directors, or persons owning or controlling 10 percent or
38more of the corporation’s stock, the commissioner may not deny
39the issuance or delay the renewal of a real estate license to, or
40suspend or revoke the real estate license of, the corporation,
P7 1provided that any offending officer, director, or stockholder, who
2has done any of the foregoing acts individually and not on behalf
3of the corporation, has been completely disassociated from any
4affiliation or ownership in the corporation. A decision by the
5commissioner to delay
the renewal of a real estate license shall
6toll the expiration of that license until the results of any pending
7disciplinary actions against that licensee are final, or until the
8licensee voluntarily surrenders his, her, or its license, whichever
9is earlier.
Section 10186.2 of the Business and Professions Code
11 is amended to read:
(a) (1) A licensee shall report any of the following
13to the bureau:
14(A) The bringing ofbegin delete an indictment or information, or the filing a criminal complaint,begin insert information, or indictmentend insert charging a
15ofend delete
16felony against the licensee.
17(B) The conviction of the licensee, including any verdict of
18guilty, or plea of guilty or no contest, of any felony or
19misdemeanor.
20(C) Any disciplinary action taken by another licensing entity
21or authority of this state or of another state or an agency of the
22federal government.
23(2) The report required by this subdivision shall be made in
24writing within 30 days of the date of the bringing of the indictment
25or the charging of a felony, the conviction, or the disciplinary
26action.
27(b) Failure to make a report required by this section shall
28constitute a cause for discipline.
No reimbursement is required by this act pursuant to
30Section 6 of Article XIII B of the California Constitution because
31the only costs that may be incurred by a local agency or school
32district will be incurred because this act creates a new crime or
33infraction, eliminates a crime or infraction, or changes the penalty
34for a crime or infraction, within the meaning of Section 17556 of
35the Government Code, or changes the definition of a crime within
36the meaning of Section 6 of Article XIII B of the California
37Constitution.
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