AB 685,
as amended, Irwin. Real Estatebegin delete Law: sales of real property: real property disclosure requirements.end deletebegin insert Law.end insert
(1) Existing
end delete
begin insertExistingend insert law, the Real Estate Law, provides for the licensure and regulation of real estate brokers and salesmen by the Real Estate Commissioner, the chief officer of the Bureau of Real Estate.begin delete A willful violation of the law and other related real estate provisions is a crime.end delete
Under
end deletebegin insert(1)end insertbegin insert end insertbegin insertUnderend insert existing law, a real estate salesman is a natural person who isbegin insert licensed andend insert employed by a licensed real estate broker to do specified acts.begin insert Under existing law, whenever the word salesman is used in specified provisions of law, it means salesperson. However, existing law authorizes a licensee to refer to the licensed status as real estate salesman, real estate saleswoman, or real estate salesperson.end insert
This bill wouldbegin delete redefine the term “salesman” as a “salesperson” who is retained by a licensed real estate broker. The bill would also define various terms to describe the relationships between real estate brokers and salespersons. The bill would require a real estate broker to immediately
notify the commissioner whenever a licensee affiliates or is retained by a real estate broker, if that affiliation is terminated or if the licensee acquires a new business address. Because a willful violation of these reporting requirements would be a crime, the bill would impose a state-mandated local program.end deletebegin insert rename the licensed status of “real estate salesman” as a “real estate salesperson” and would make numerous conforming changes in this regard. The bill would also recast the provision authorizing a licensee to refer to his or her licensed status as described above.end insert
(2) Under existing law, if 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, the commissioner or his or her designated representative is authorized to issue a citation to that person. Existing law prohibits a license from being renewed if an unpaid fine remains outstanding or the terms of a citation have not been complied with.
end insertbegin insertThis bill would additionally prohibit a license from being issued under those circumstances.
end insertbegin insert(3) This bill would make various nonsubstantive changes.
end insertThis bill would define various terms to describe the parties involved in the sale of real estate transactions, including, but not limited to, seller, buyer, seller’s licensee, buyer’s licensee, dual broker, and dual licensee. The bill would also define various other terms for purposes of carrying out the law.
end deleteExisting law makes it unlawful for any licensed real estate salesperson to pay any compensation for performing specified acts to any real estate licensee except through the broker under whom he or she is at the time licensed.
end deleteThis bill would authorize a licensee to enter into an agreement with another licensee to share compensation provided that the compensation is paid through the responsible broker.
end deleteExisting law requires a notice containing certain information to be filed with the commissioner within a specified period of time after the first transaction and within that same time period if there is any material change in the required information. Existing law requires the broker or the designated officer or corporate broker to sign the notice.
end deleteThis bill would require the responsible broker, as defined for purposes of the law, to sign that notice. Because a willful violation of that signature requirement would be a crime, the bill would impose a state-mandated local program.
end deleteUnder existing law, when a real estate license is issued to a corporation, if it desires any of its officers other than the specified designated officer to act under its license as a real estate broker, it is required to procure an additional license to so employ each additional officer.
end deleteThis bill would authorize a corporation, in the event of death or incapacity of a sole designated broker-officer, to operate continuously under its existing license if notice is provided to the bureau within a specified period of time of the death or incapacity. Because the willful failure to provide that notice would be a crime, the bill would impose a state-mandated local program.
end deleteUnder existing law, each officer of a corporation through whom it is licensed to act as a real estate broker is, while so employed under that license, a licensed real estate broker, but is only licensed to act as such for and on behalf of the corporation as an officer.
end deleteThis bill would not preclude a designated corporate officer who has a separate individual license from conducting licensed activity for another entity if the entity for which he or she acts is clearly disclosed and apparent to any member of the public using his or her services outside the corporation. When a corporation wishes to act as a real estate broker, the bill would require the corporation to be licensed by the Bureau of Real Estate through qualified broker officers, as provided. The bill would provide that an officer of a corporation through whom it is licensed to act need not maintain an individual broker’s license, but would provide that the officer is subject to all duties and responsibilities of a licensed real estate broker. Because a willful violation of these requirements would be a crime, the bill would impose a state-mandated local program.
end delete(2) (A) Existing civil law governing agency listings for the transfer of certain property, which includes real property and mobilehomes, prohibits a listing from being placed in a multiple listing service (MLS), as defined, unless authorized or directed by the owner in the listing.
end deleteIf an open listing is placed in the multiple listing service, existing law requires the total compensation that the owner is to pay to go to the selling agent who procures an enforceable offer from a ready, able, and willing buyer on the terms accepted by the owner. Existing law does not require an open listing to specify compensation to the selling agent, but authorizes the open listing to state that the compensation is to be negotiated between the selling agent and the owner. Existing law authorizes an open listing to contain an agreement by the owner to pay the listing agent compensation in any amount, at any time, and for any services, other than for selling the property or procuring or finding a buyer, as the agreement may specify.
end deleteThis bill would delete those provisions relating to an open listing and would revise and recast those provisions to make the definitions in the Real Estate Law, as described in paragraph (1), applicable to these provisions.
end delete(B) Existing civil law governing disclosures upon the transfer of residential property requires the transferor of any real property to deliver to the prospective transferee a specified written statement disclosure subject to specified requirements. If any disclosure, or any material amendment of any disclosure, is delivered after the execution of an offer to purchase, existing law requires the transferee to have a specified period of time to terminate his or her offer by delivery of a written notice of termination to the transferor or the transferor’s agent. Existing law requires these disclosures to be made on a specified form.
end deleteThis bill would make the definitions in the Real Estate Law, as described in paragraph (1), applicable to these provisions. The bill would provide that disclosure is complete when the 3 sections of the disclosure form are completed and delivered. The bill would also authorize a real estate licensee to complete his or her portion of the form using a comparable form that includes all of the same information, as provided.
end deleteUnder existing law, neither the transferor nor any listing or selling agent is required to be liable for any error, inaccuracy, or omission of any information delivered pursuant to these disclosure requirements if the error, inaccuracy, or omission was not within the personal knowledge of the transferor or that listing or selling agent, was based on information timely provided by public agencies or by certain licensed persons that is required to be disclosed, and ordinary care was exercised in obtaining and transmitting it.
end deleteWhen a licensed person responds to such a request, existing law authorizes an expert to indicate, in writing, an understanding that the information provided will be used in fulfilling the disclosure requirements, which relieves the expert from responsibility for any items of information other than those expressly set forth in the statement.
end deleteThis bill would delete those provisions relating to expert responsibility.
end deleteExisting law authorizes a city or county to elect to require a local option real estate disclosure document in addition to the real estate transfer disclosure document.
end deleteThis bill would update the content of that optional disclosure document based on making the Real Estate Law definitions, as described in paragraph (1), applicable to these provisions.
end deleteUnder existing law, if more than one licensed real estate broker is acting as an agent in a transaction, the broker who has obtained the offer made by the transferee is required to deliver the disclosure to the transferee, unless the transferor has given other written instructions for delivery.
end deleteIf there is only one real estate licensee in a transaction, the bill would require that real estate licensee to deliver the disclosure to the buyer. If there is no real estate licensee in a transaction, the bill would require the seller to deliver the disclosure to the buyer.
end delete(C) Existing law generally requires the disclosure of natural and environmental hazards, right-to-farm, and other disclosures upon the transfer of residential property.
end deleteThis bill would make the definitions in the Real Estate Law, as described in paragraph (1), applicable to these provisions. The bill would update the content of the Natural Hazard Disclosure Statement based on those newly defined terms.
end delete(D) Under existing law, real estate brokers and salespersons owe certain duties to prospective purchasers of real property.
end deleteThis bill would make the definitions in the Real Estate Law, as described in paragraph (1), applicable to these provisions.
end deleteExisting law requires listing agents and selling agents to provide the seller and buyer in a real property transaction with a copy of a disclosure form, which includes specified statutory provisions printed on the back, regarding real estate agency relationships. Existing law further requires these agency relationships to be confirmed to the buyer and seller in a specified form.
end deleteThis bill would eliminate the requirement to include those statutory provisions, revise the content of that form to include at a minimum certain information, including consumer responsibilities, and update the terms used in that form based on the application of the Real Estate Law terminology to these provisions. The bill would also update the content of the form required to confirm real estate licensee relationships.
end delete(3) 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.
end deleteThis 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.
end deleteExisting 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.
end deleteThis 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.
end deleteExisting 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.
end deleteThis bill would also require a licensee to report the bringing of a 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.
end deleteThe bill would also make other nonsubstantive changes.
end delete(4) This bill would make numerous conforming and nonsubstantive changes.
end delete(5) This bill would delay the operation of these provisions to July 1, 2018.
end delete(6) 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.
end deleteThis bill would provide that no reimbursement is required by this act for a specified reason.
end deleteVote: majority.
Appropriation: no.
Fiscal committee: yes.
State-mandated local program: begin deleteyes end deletebegin insertnoend insert.
The people of the State of California do enact as follows:
Section 6742 of the Business and Professions
2Code is amended to read:
begin delete(a)end deletebegin delete end deleteAny person,begin delete firmend deletebegin insert firm,end insert or corporation holding a
4license as real estate broker or real estatebegin delete salesman,end deletebegin insert salesperson,end insert
5 when making appraisals and valuations of real estate properties,
6while engaged in
the business or acting in the capacity of a real
7estate broker or a real estatebegin delete salesman,end deletebegin insert
salesperson,end insert within the
8meaning of thebegin delete Californiaend delete Real Estatebegin delete Actend deletebegin insert Lawend insert is exempt from
9registration under the provisions of this chapter.
10(b) This section shall repeal on July 1, 2018.
end deleteSection 6742 is added to the Business and Professions
12Code, to read:
(a) Any person, firm or corporation holding a license
2as real estate broker or real estate salesperson, when making
3appraisals and valuations of real estate properties, while engaged
4in the business or acting in the capacity of a real estate broker or
5a real estate salesperson, within the meaning of the California Real
6Estate Act is exempt from registration under the provisions of this
7chapter.
8(b) This section shall become operative on July 1, 2018.
Section 10001 of the Business and Professions Code
10 is amended to read:
(a) The definitions in this chapter apply to the
12provisions of this part only and do not affect any other provisions
13of this code.
14(b) This section shall repeal on July 1, 2018.
Section 10001 is added to the Business and Professions
16Code, to read:
(a) Except as otherwise specified, the definitions in
18this chapter apply to the provisions of this part only and do not
19affect any other provisions of this code.
20(b) This section shall become operative on July 1, 2018.
Section 10003 of the Business and Professions Code
23 is amended to read:
begin delete(a)end deletebegin delete end delete“Commissioner”begin delete refers toend deletebegin insert meansend insert the Real Estate
25Commissioner.
26(b) This section shall repeal on July 1, 2018.
end deleteSection 10003 is added to the Business and Professions
28Code, to read:
(a) “Commissioner” means the Real Estate
30Commissioner.
31(b) This section shall become operative on July 1, 2018.
Section 10007 of the Business and Professions Code
34 is amended to read:
begin delete(a)end deletebegin delete end delete“Provisions of this part relating to real estate”begin delete refers begin insert meansend insert the provisions of Chapters 1, 2, 3, and 6 of Part 1.
36toend delete
37(b) This section shall repeal on July 1, 2018.
end deleteSection 10007 is added to the Business and Professions
39Code, to read:
(a) “Provisions of this part relating to real estate” means
2the provisions of Chapters 1, 2, 3, and 6 of Part 1.
3(b) This section shall become operative on July 1, 2018.
Section 10008 of the Business and Professions Code
6 is amended to read:
begin delete(a)end deletebegin delete end delete“Provisions of this part relating to business
8opportunity regulation”begin delete refers toend deletebegin insert meansend insert the provisions of Chapters
91, 2, and 6 of Part 1.
10(b) This section shall repeal on July 1, 2018.
end deleteSection 10008 is added to the Business and
12Professions Code, to read:
(a) “Provisions of this part relating to business
14opportunity regulation” means the provisions of Chapters 1, 2, and
156 of Part 1.
16(b) This section shall become operative on July 1, 2018.
Section 10009.5 of the Business and Professions Code
19 is amended to read:
begin delete(a)end deletebegin delete end delete“Provisions of this part relating to mineral, oil,
21and gas brokerage”begin delete refers toend deletebegin insert meansend insert the provisions of Chapters 1,
222, 6, and 7, of Part 1.
23(b) This section shall repeal on July 1, 2018.
end deleteSection 10009.5 is added to the Business and
25Professions Code, to read:
(a) “Provisions of this part relating to mineral, oil,
27and gas brokerage” means the provisions of Chapters 1, 2, 6, and
287, of Part 1.
29(b) This section shall become operative on July 1, 2018.
Section 10010 of the Business and Professions Code
32 is amended to read:
begin delete(a)end deletebegin delete end delete“Provisions of this part relating to hearings”begin delete refers begin insert meansend insert the provisions of Article 3 of Chapter 2 of Part 1.
34toend delete
35(b) This section shall repeal on July 1, 2018.
end deleteSection 10010 is added to the Business and
37Professions Code, to read:
(a) “Provisions of this part relating to hearings” means
39the provisions of Article 3 of Chapter 2 of Part 1.
40(b) This section shall become operative on July 1, 2018.
Section 10011 of the Business and Professions Code
3 is amended to read:
begin delete(a)end deletebegin delete end delete“Licensee,” when used without modification,begin delete refers begin insert meansend insert a person, whether broker or
5toend deletebegin delete salesman,end deletebegin insert salesperson,end insert
6 licensed under any of the provisions of this part.
7(b) This section shall repeal on July 1, 2018.
end deleteSection 10011 is added to the Business and
9Professions Code, to read:
(a) “Licensee,” when used without modification, means
11to a person, whether broker or salesperson, licensed under any of
12the provisions of this part.
13(b) This section shall become operative on July 1, 2018.
Section 10012 of the Business and Professions Code
16 is amended to read:
begin delete(a)end deletebegin delete end delete“Broker,” when used without modification,begin delete refers begin insert meansend insert a person licensed as a broker under any of the provisions
18toend delete
19of this part.
20(b) This section shall repeal on July 1, 2018.
end deleteSection 10012 is added to the Business and
22Professions Code, to read:
(a) “Broker,” when used without modification, means
24a person licensed as a broker under any of the provisions of this
25part.
26(b) This section shall become operative on July 1, 2018.
Section 10013 of the Business and Professions Code
29 is amended to read:
begin delete(a)end deletebegin delete end deletebegin delete“Salesman,” end deletebegin insert“Salesperson,” end insertwhen used without
31modification,begin delete refers toend deletebegin insert meansend insert a person licensed as abegin delete salesmanend delete
32begin insert
salespersonend insert under any of the provisions of this part.begin insert Whenever the
33word salesman is used in this division, or in the rules and
34regulations of the commissioner, it means salesperson.
35Notwithstanding any other law, a licensee may elect to refer to his
36or her licensed status as real estate salesman, real estate
37saleswoman, or real estate salesperson.end insert
38(b) This section shall repeal on July 1, 2018.
end deleteSection 10013 is added to the Business and
40Professions Code, to read:
(a) “Salesperson,” when used without modification,
2means a person licensed as a salesperson under any of the
3provisions of this part. Whenever the word salesman is used in
4this division, or in the rules and regulations of the commissioner,
5it means salesperson. A licensee may elect to refer to his or her
6licensed status as real estate salesman, real estate saleswoman, or
7real estate salesperson.
8(b) This section shall become operative on July 1, 2018.
Section 10014 of the Business and Professions Code
11 is amended to read:
begin delete(a)end deletebegin delete end delete“Real estate licensee”begin delete refers toend deletebegin insert meansend insert a person,
13whether broker orbegin delete salesman,end deletebegin insert salesperson,end insert licensed under Chapter
143 of this part.
15(b) This section shall repeal on July 1, 2018.
end deleteSection 10014 is added to the Business and
17Professions Code, to read:
(a) “Real estate licensee” means a person, whether
19broker or salesperson, licensed under Chapter 3 of this part.
20(b) This section shall become operative on July 1, 2018.
Section 10015 of the Business and Professions Code
23 is amended to read:
begin delete(a)end deletebegin delete end delete“Real estate broker”begin delete refers toend deletebegin insert meansend insert a person
25licensed as a broker under Chapter 3 of this part.
26(b) This section shall repeal on July 1, 2018.
end deleteSection 10015 is added to the Business and
28Professions Code, to read:
(a) “Real estate broker” means a person licensed as a
30broker under Chapter 3 of this part.
31(b) This section shall become operative on July 1, 2018.
Section 10015.1 is added to the Business and
33Professions Code, to read:
(a) “Responsible broker” means a real estate broker
35responsible for the exercise of control and supervision of real estate
36salespersons under Section 10159.2 or a real estate licensee subject
37to discipline under subdivision (h) of Section 10177 for failure to
38supervise activity requiring a real estate license. The supervision
39of a salesperson required under this part is limited to regulatory
40compliance and consumer protection.
P12 1(b) This section shall become operative on July 1, 2018.
Section 10015.2 is added to the Business and
3Professions Code, to read:
(a) “Branch manager” or “division manager” means
5a real estate licensee authorized to perform supervisorial services
6for a responsible broker.
7(b) This section shall become operative on July 1, 2018.
Section 10015.3 is added to the Business and
9Professions Code, to read:
(a) “Broker associate” means a broker affiliated with
11another real estate broker as an independent contractor or affiliated
12in another capacity who has authority to provide services requiring
13a real estate license on behalf of the real estate broker.
14(b) This section shall become operative on July 1, 2018.
Section 10015.4 is added to the Business and
16Professions Code, to read:
(a) “Broker identity” means the name under which
18the broker operates or conducts business and may include a sole
19proprietorship or business entity name.
20(b) This section shall become operative on July 1, 2018.
Section 10016 of the Business and Professions Code
23 is amended to read:
begin delete(a)end deletebegin delete end delete“Real estatebegin delete salesman” refers toend deletebegin insert salesperson” meansend insert
25 a person licensed as abegin delete salesmanend deletebegin insert salespersonend insert under Chapter 3 of
26this part.
27(b) This section shall repeal on July 1, 2018.
end deleteSection 10016 is added to the Business and
29Professions Code, to read:
(a) “Real estate salesperson” means a person licensed
31as a salesperson under Chapter 3 of this part or a broker associate.
32(b) This section shall become operative on July 1, 2018.
Section 10017 of the Business and Professions Code
34 is amended to read:
(a) Whenever the word salesman is used in this
36division, or in the rules and regulations of the commissioner, it
37means salesperson. A licensee, however, may elect to refer to the
38licensed status as real estate salesman, real estate saleswoman, or
39real estate salesperson.
40(b) This section shall repeal on July 1, 2018.
begin insertSection 10017 of the end insertbegin insertBusiness and Professions Codeend insert
2
begin insert is repealed.end insert
Whenever the word salesman is used in this division,
4or in the rules and regulations of the commissioner, it means
5salesperson. A licensee, however, may elect to refer to the licensed
6status as real estate salesman, real estate saleswoman, or real estate
7salesperson.
Section 10018.01 is added to the Business and
9Professions Code, to read:
(a) “Retained” means the relationship between a
11broker and a real estate licensee who is either an independent
12contractor or otherwise affiliated with a broker to perform activities
13that require a license and are performed under a broker’s
14supervision.
15(b) This section shall become operative on July 1, 2018.
Section 10018.02 is added to the Business and
17Professions Code, to read:
(a) “Seller” means a transferor in a real property
19transaction, and includes an owner who lists real property with a
20broker, whether or not a transfer results, or who receives an offer
21to purchase real property of which he or she is the owner from a
22licensee on behalf of another. “Seller” includes both a vendor and
23lessor of real property.
24(b) This section shall become operative on July 1, 2018.
Section 10018.03 is added to the Business and
26Professions Code, to read:
(a) “Listing licensee” means a real estate licensee
28who provides services requiring a real estate license for a seller
29pursuant to a listing agreement.
30(b) This section shall become operative on July 1, 2018.
Section 10018.04 is added to the Business and
32Professions Code, to read:
(a) “Seller’s licensee” means a real estate licensee
34who provides services requiring a real estate license for a seller.
35(b) This section shall become operative on July 1, 2018.
Section 10018.05 is added to the Business and
37Professions Code, to read:
(a) “Buyer” means a transferee in a real property
39transaction, and includes a person who executes an offer to
40purchase real property from a seller through a broker, or a broker
P14 1associate or real estate salesperson acting on behalf of a broker,
2or who seeks the services of a real estate licensee in more than a
3casual, transitory, or preliminary manner, with the object of
4entering into a real property transaction. “Buyer” includes both a
5vendee and lessee of real property. Buyer also includes a transferee
6or purchaser.
7(b) This section shall become operative on July 1, 2018.
Section 10018.06 is added to the Business and
9Professions Code, to read:
(a) “Buyer’s licensee,” “cooperating licensee,” and
11“selling licensee” each means a real estate licensee who provides
12services requiring a real estate license for a buyer.
13(b) This section shall become operative on July 1, 2018.
Section 10018.07 is added to the Business and
15Professions Code, to read:
(a) “Real property” means any estate specified in
17paragraphs (1) or (2) Section 761 of the Civil Code in property,
18and includes (a) residential property, (b) multiunit residential
19property with more than four dwelling units, (c) commercial real
20property, (d) a ground lease coupled with improvements, or (e) a
21mobilehome as defined in Section 18008 of the Health and Safety
22Code.
23(b) This section shall become operative on July 1, 2018.
Section 10018.08 is added to the Business and
25Professions Code, to read:
(a) “Residential property” means property (1)
27improved with one to four dwelling units, (2) any leasehold
28exceeding one year’s duration, (3) a unit in a residential stock
29cooperative, or (4) a mobilehome when offered for sale or sold
30through a real estate broker.
31(b) This section shall become operative on July 1, 2018.
Section 10018.09 is added to the Business and
33Professions Code, to read:
(a) “Commercial real property” means all real
35property in the state, except (1) residential real property, (2)
36dwelling units made subject to Chapter 2 (commencing with
37Section 1940) of Title 5 of Part 4 of Division 3 of the Civil Code,
38(3) a mobilehome as defined in Section 798.3 of the Civil Code,
39or (4) a recreational vehicle as defined in Section 799.29 of the
40Civil Code.
P15 1(b) This section shall become operative on July 1, 2018.
Section 10018.10 is added to the Business and
3Professions Code, to read:
(a) “Sell,” “sale,” or “sold” means a transaction for
5the transfer of real property from a seller to a buyer, and includes
6(1) an exchange of real property between a seller and a buyer, (2)
7transactions for the creation of a real property sales contract within
8the meaning of Section 2985 of the Civil Code, and (3) a leasehold
9exceeding one year’s duration.
10(b) This section shall become operative on July 1, 2018.
Section 10018.11 is added to the Business and
12Professions Code, to read:
(a) “Dual broker” means a responsible broker that
14has both a seller’s licensee and a buyer’s licensee under his or her
15supervision in the same transaction or who individually provides
16services for both a seller and a buyer in the same transaction.
17(b) This section shall become operative on July 1, 2018.
Section 10018.12 is added to the Business and
19Professions Code, to read:
(a) “Dual licensee” means a real estate salesperson
21or broker associate who individually provides services requiring
22a real estate license for both a seller and a buyer at the same time
23in the same transaction.
24(b) This section shall become operative on July 1, 2018.
Section 10018.13 is added to the Business and
26Professions Code, to read:
(a) “Transaction coordinator” means a person who
28provides services which include administrative and clerical tasks
29for a real estate licensee that do not include licensed activities.
30(b) This section shall become operative on July 1, 2018.
Section 10018.14 is added to the Business and
32Professions Code, to read:
(a) “Appraiser” means one licensed or certified
34under Part 3 (commencing with Section 11300) of Division 4.
35(b) This section shall become operative on July 1, 2018.
Section 10018.15 is added to the Business and
37Professions Code, to read:
(a) “Listing agreement” means a written contract
39between an owner of real property and a real estate licensee by
P16 1which the licensee has been authorized to sell the real property or
2find or obtain a buyer.
3(b) This section shall become operative on July 1, 2018.
Section 10018.16 is added to the Business and
5Professions Code, to read:
(a) “Exclusive right to sell listing” means a listing
7agreement whereby the owner grants to a broker, for a specified
8period of time, the exclusive right to sell, find, or obtain a buyer
9for the real property, and the broker is entitled to the agreed
10compensation if during that period of time the real property is sold,
11no matter who effected the sale, or when the listing broker receives
12and presents to the owner any enforceable offer from a ready, able,
13and willing buyer on terms authorized by the listing agreement or
14which is accepted by the owner. The “exclusive right to sell listing”
15may provide for compensation to the listing broker if the property
16is sold within a specified period after termination of the listing
17agreement.
18(b) This section shall become operative on July 1, 2018.
Section 10018.17 is added to the Business and
20Professions Code, to read:
(a) “Exclusive agency listing” means an “exclusive
22right to sell listing” in which the owner reserves the right to sell
23directly but not through any other broker and, in that event, without
24obligation to pay compensation to the broker.
25(b) This section shall become operative on July 1, 2018.
Section 10018.18 is added to the Business and
27Professions Code, to read:
(a) “Open listing” means a listing agreement which
29grants no exclusive rights or priorities to the listing broker, and
30the agreed commission is payable to the broker only if the listing
31broker obtains and presents to the owner an enforceable offer from
32a ready, able, and willing buyer on the terms authorized by the
33listing agreement which is accepted by the owner, before the
34property is otherwise sold either through another broker or by the
35owner directly and before the listing agreement expires by its terms
36or is revoked.
37(b) This section shall become operative on July 1, 2018.
Section 10023 of the Business and Professions Code
40 is amended to read:
begin delete(a)end deletebegin delete end delete“Mineral, oil, and gas licensee”begin delete refers toend deletebegin insert meansend insert a
2person licensed under Chapter 7 (commencing with Section 10500)
3of this part.
4(b) This section shall repeal on July 1, 2018.
end deleteSection 10023 is added to the Business and
6Professions Code, to read:
(a) “Mineral, oil, and gas licensee” means a person
8licensed under Chapter 7 (commencing with Section 10500) of
9this part.
10(b) This section shall become operative on July 1, 2018.
Section 10024 of the Business and Professions Code
13 is amended to read:
begin delete(a)end deletebegin delete end delete“Mineral, oil, and gas broker”begin delete refers toend deletebegin insert meansend insert a
15person licensed as a broker under Chapter 7 of this part.
16(b) This section shall repeal on July 1, 2018.
end deleteSection 10024 is added to the Business and
18Professions Code, to read:
(a) “Mineral, oil, and gas broker” means a person
20licensed as a broker under Chapter 7 of this part.
21(b) This section shall become operative on July 1, 2018.
Section 10026 of the Business and Professions Code
23 is amended to read:
(a) The term “advance fee,” as used in this part, is a
25fee, regardless of the form, that is claimed, demanded, charged,
26received, or collected by a licensee for services requiring a license,
27or for a listing, as that term is defined in Section 10027, before
28fully completing the service the licensee contracted to perform or
29represented would be performed. Neither an advance fee nor the
30services to be performed shall be separated or divided into
31components for the purpose of avoiding the application of this
32division.
33(b) For the purposes of this section, the term “advance fee” does
34not include:
35(1) “Security” as that term is used in Section 1950.5 of the Civil
36Code.
37(2) A “screening fee” as that term is used in Section 1950.6 of
38the Civil Code.
39(3) A fee that is claimed, demanded, charged, received, or
40collected for the purpose of advertising the sale, lease, or exchange
P18 1of real estate, or of a business opportunity, in a newspaper of
2general circulation, any other written publication, or through
3electronic media comparable to any type of written publication,
4provided that the electronic media or the publication is not under
5the control or ownership of the broker.
6(4) A fee earned for a specific service under a “limited service”
7contract. For purposes of this section, a “limited service” contract
8is a written agreement for real estate services described in
9subdivision (a), (b), or (c) of Section 10131, and pursuant to which
10such services are promoted, advertised, or presented as
stand-alone
11services, to be performed on a task-by-task basis, and for which
12compensation is received as each separate, contracted-for task is
13completed. To qualify for this exclusion, all services performed
14pursuant to the contract must be described in subdivision (a), (b),
15or (c) of Section 10131.
16(c) A contract between a real estate broker and a principal that
17requires payment of a commission to the broker after the contract
18is fully performed does not represent an agreement for an advance
19fee.
20(d) This section does not exempt from regulation the charging
21or collecting of a fee under Section 1950.5 or 1950.6 of the Civil
22Code, but instead regulates fees that are not subject to those
23sections.
24(e) This section shall repeal on July 1, 2018.
Section 10026 is added to the Business and
26Professions Code, to read:
(a) The term “advance fee,” as used in this part, is a
28fee, regardless of the form, that is claimed, demanded, charged,
29received, or collected by a licensee for services requiring a license,
30or for a listing agreement, as that term is defined in Section 10027,
31before fully completing the service the licensee contracted to
32perform or represented would be performed. Neither an advance
33fee nor the services to be performed shall be separated or divided
34into components for the purpose of avoiding the application of this
35division.
36(b) For the purposes of this section, the term “advance fee” does
37not include:
38(1) “Security” as that term is used in Section 1950.5 of the Civil
39Code.
P19 1(2) A “screening fee” as that term is used in Section 1950.6 of
2the Civil Code.
3(3) A fee that is claimed, demanded, charged, received, or
4collected for the purpose of advertising the sale, lease, or exchange
5of real estate, or of a business opportunity, in a newspaper of
6general circulation, any other written publication, or through
7electronic media comparable to any type of written publication,
8provided that the electronic media or the publication is not under
9the control or ownership of the broker.
10(4) A fee earned for a specific service under a “limited service”
11contract. For purposes of this section, a “limited service” contract
12is a written agreement for real estate services described in
13subdivision (a), (b), or (c) of Section 10131, and pursuant to which
14such services are promoted, advertised, or presented as
stand-alone
15services, to be performed on a task-by-task basis, and for which
16compensation is received as each separate, contracted-for task is
17completed. To qualify for this exclusion, all services performed
18pursuant to the contract shall be described in subdivision (a), (b),
19or (c) of Section 10131.
20(5) A fee approved by the bureau pursuant to Section 10085.
21(c) A contract between a real estate broker and a principal that
22requires payment of a commission to the broker after the contract
23is fully performed does not represent an agreement for an advance
24fee.
25(d) This section does not exempt from regulation the charging
26or collecting of a fee under Section 1950.5 or 1950.6 of the Civil
27Code, but instead regulates fees that are not subject to those
28sections.
29(e) This section shall become operative on July 1, 2018.
Section 10027 of the Business and Professions Code
32 is amended to read:
begin delete(a)end deletebegin delete end deleteThe term “listing” as used in this part includes, but
34is not limited to:
35(1)
end delete
36begin insert(a)end insert The name or a list of the names, of the owners, landlords,
37exchangers, or lessors, or the location or locations, of property, or
38of an interest in property, offered for rent, sale, lease, or exchange.
39(2)
end delete
P20 1begin insert(b)end insert The name, or a list of the names, or the location or locations
2at which prospective or potential purchasers, buyers, lessees,
3tenants or exchangers of property may be found or contacted.
4(3)
end delete
5begin insert(c)end insert An agreement by which a person who is engaged in the
6business of promoting the sale or lease of business opportunities
7or real estate agrees to render to an owner or lessee of such property
8any services, to promote the sale or lease of said property.
9(4)
end delete
10begin insert(d)end insert An agreement by which a person who is engaged in the
11business of finding, locating or promoting the sale or lease of
12business opportunities or real estate, agrees to circularize, notify
13or refer real estate brokers orbegin delete salesmenend deletebegin insert salespersonend insert to said property
14which is offered for sale or lease.
15(b) This section shall repeal on July 1, 2018.
end deleteSection 10027 is added to the Business and
17Professions Code, to read:
(a) The term “listing agreement” as used in this part
19includes, but is not limited to:
20(1) The name or a list of the names, of the owners, landlords,
21exchangers, or lessors, or the location or locations, of property, or
22of an interest in property, offered for rent, sale, lease, or exchange.
23(2) The name, or a list of the names, or the location or locations
24at which prospective or potential buyers, lessees, tenants, or
25exchangers of property may be found or contacted.
26(3) An agreement by which a person who is engaged in the
27business of promoting the sale or lease of business opportunities
28or real estate agrees to
render to an owner or lessee of such property
29any services, to promote the sale or lease of said property.
30(4) An agreement by which a person who is engaged in the
31business of finding, locating, or promoting the sale or lease of
32business opportunities or real estate, agrees to circularize, notify,
33or refer real estate brokers or salespersons to said property which
34is offered for sale or lease.
35(b) This section shall become operative on July 1, 2018.
Section 10050 of the Business and Professions Code
37 is amended to read:
(a) There is in the Department of Consumer Affairs a
39Bureau of Real Estate, the chief officer of which bureau is named
40the Real Estate Commissioner.
P21 1(b) It shall be the principal responsibility of the commissioner
2to enforce all laws in this part (commencing with Section 10000)
3and Chapter 1 (commencing with Section 11000) of Part 2 of this
4division in a manner that achieves the maximum protection for the
5purchasers of real property and those persons dealing with real
6estate licensees.
7(c) Wherever the term “commissioner” is used in this division,
8it means the Real Estate Commissioner.
9(d) This section shall repeal on July 1, 2018.
Section 10050 is added to the Business and
11Professions Code, to read:
(a) There is in the Department of Consumer Affairs a
13Bureau of Real Estate, the chief officer of which bureau is named
14the Real Estate Commissioner.
15(b) It shall be the principal responsibility of the commissioner
16to enforce all laws in this part (commencing with Section 10000)
17and Chapter 1 (commencing with Section 11000) of Part 2 of this
18division in a manner that achieves the maximum protection for the
19buyers of real property and those persons dealing with real estate
20licensees.
21(c) Wherever the term “commissioner” is used in this division,
22it means the Real Estate Commissioner.
23(d) This section shall become operative on July 1, 2018.
Section 10074 of the Business and Professions Code
26 is amended to read:
begin delete(a)end deletebegin delete end deleteAfter qualifying as such neither the commissioner
28nor any of the deputies,begin delete clerksend deletebegin insert clerks,end insert or employees of the
29department shall be interested in any mineral,begin delete oilend deletebegin insert oil,end insert or gas
30business, mineral,begin delete oilend deletebegin insert
oil,end insert or gas brokerage firm, real estate
31company or any real estate brokerage firm, as director, stockholder,
32officer, member, agent or employee, or act as a broker orbegin delete salesman,end delete
33begin insert salesperson,end insert or act as a co-partner or agent for any broker or
34brokers,begin delete salesman or salesmen.end deletebegin insert or salesperson or salespersons.end insert
35(b) This section shall repeal on July 1, 2018.
end deleteSection 10074 is added to the Business and
37Professions Code, to read:
(a) After qualifying as such neither the commissioner
39nor any of the deputies, clerks or employees of the department
40shall be interested in any mineral, oil, or gas business, mineral,
P22 1oil, or gas brokerage firm, real estate company or any real estate
2brokerage firm, as director, stockholder, officer, member, agent,
3or employee, or act as a broker or salesperson, or act as a copartner
4or agent for any broker or brokers, salesperson or salespersons.
5(b) This section shall become operative on July 1, 2018.
Section 10080.9 of the Business and Professions Code
8 is amended to read:
(a) If, upon inspection, examination, or investigation,
10the commissioner has cause to believe that a person who does not
11possess a real estate license is engaged or has engaged in activities
12for which a real estate license is required, or that a person who
13does not possess a prepaid rental listing service license or a real
14estate broker license is engaged or has engaged in activities for
15which a license is required pursuant to Section 10167.2, or that a
16licensee is violating or has violated any provision of this division
17or any rule or order thereunder, the commissioner or his or her
18designated representative may issue a citation to that person in
19writing, describing with particularity the basis of the citation. Each
20citation may contain an order to correct the violation or violations
21identified and a reasonable time period or
periods by which the
22violation or violations must be corrected. In addition, each citation
23may assess an administrative fine not to exceed two thousand five
24hundred dollars ($2,500), which shall be deposited into the
25Recovery Account of the Real Estate Fund and shall, upon
26appropriation by the Legislature, be available for expenditure for
27the purposes specified in Chapter 6.5 (commencing with Section
2810470). In assessing a fine, the commissioner shall give due
29consideration to the appropriateness of the amount of the fine with
30respect to factors such as the gravity of the violation, the good
31faith of the person cited, and the history of previous violations. A
32citation issued and a fine assessed pursuant to this section, while
33constituting discipline for a violation of the law, shall be in lieu
34of other administrative discipline by the commissioner for the
35offense or offenses cited, and the citation against and payment of
36any fine by a licensee shall not be reported as disciplinary action
37taken by the
commissioner.
38(b) Notwithstanding subdivision (a), nothing in this section shall
39prevent the commissioner from issuing an order to desist and
40refrain from engaging in a specific business activity or activities
P23 1or an order to suspend all business operations to a person who is
2engaged in or has engaged in continued or repeated violations of
3this part. In any of these circumstances, the sanctions authorized
4under this section shall be separate from, and in addition to, all
5other administrative, civil, or criminal penalties.
6(c) If, within 30 days from the receipt of the citation or the
7citation and fine, the person cited fails to notify the commissioner
8that he or she intends to request a hearing as described in
9subdivision (d), the citation or the citation and fine shall be deemed
10final.
11(d) Any hearing under this
section shall be conducted in
12accordance with Chapter 5 (commencing with Section 11500) of
13Part 1 of Division 3 of Title 2 of the Government Code.
14(e) After the exhaustion of the review procedures provided for
15in this section, the commissioner may apply to the appropriate
16superior court for a judgment in the amount of any administrative
17penalty imposed pursuant to subdivision (a) and an order
18compelling thebegin delete cited personend deletebegin insert
person citedend insert to comply with the order
19of the commissioner. The application, which shall include a
20certified copy of the final order of the commissioner, shall
21constitute a sufficient showing to warrantbegin delete the issuance ofend deletebegin insert issuingend insert
22 the judgment and order.
23(f) Failure of any person to comply with the terms of a citation
24or pay a fine assessed pursuant to this section, within a reasonable
25period specified by the commissioner, shall subject that person to
26disciplinary action by the commissioner. In no event may a license
27bebegin insert issued orend insert renewed if an unpaid fine remains outstanding or the
28terms of a citation have not been
complied with.
29(g) This section shall repeal on July 1, 2018.
end deleteSection 10080.9 is added to the Business and
31Professions Code, to read:
(a) If, upon inspection, examination, or investigation,
33the commissioner has cause to believe that a person who does not
34possess a real estate license is engaged or has engaged in activities
35for which a real estate license is required, or that a person who
36does not possess a prepaid rental listing service license or a real
37estate broker license is engaged or has engaged in activities for
38which a license is required pursuant to Section 10167.2, or that a
39licensee is violating or has violated any provision of this division
40or any rule or order thereunder, the commissioner or his or her
P24 1designated representative may issue a citation to that person in
2writing, describing with particularity the basis of the citation. Each
3citation may contain an order to correct the violation or violations
4identified and a
reasonable time period or periods by which the
5violation or violations must be corrected. In addition, each citation
6may assess an administrative fine not to exceed two thousand five
7hundred dollars ($2,500), that shall be deposited into the Recovery
8Account of the Real Estate Fund and shall, upon appropriation by
9the Legislature, be available for expenditure for the purposes
10specified in Chapter 6.5 (commencing with Section 10470). In
11assessing a fine, the commissioner shall give due consideration to
12the appropriateness of the amount of the fine with respect to factors
13such as the gravity of the violation, the good faith of the person
14cited, and the history of previous violations. A citation issued and
15a fine assessed pursuant to this section, while constituting discipline
16for a violation of the law, shall be in lieu of other administrative
17discipline by the commissioner for the offense or offenses cited,
18and the citation against and payment of any fine by a licensee shall
19not be reported as disciplinary
action taken by the commissioner.
20(b) Notwithstanding subdivision (a), nothing in this section shall
21prevent the commissioner from issuing an order to desist and
22refrain from engaging in a specific business activity or activities
23or an order to suspend all business operations to a person who is
24engaged in or has engaged in continued or repeated violations of
25this part. In any of these circumstances, the sanctions authorized
26under this section shall be separate from, and in addition to, all
27other administrative, civil, or criminal penalties.
28(c) If, within 30 days from the receipt of the citation or the
29citation and fine, the person cited fails to notify the commissioner
30that he or she intends to request a hearing as described in
31subdivision (d), the citation or the citation and fine shall be deemed
32final.
33(d) Any
hearing under this section shall be conducted in
34accordance with Chapter 5 (commencing with Section 11500) of
35Part 1 of Division 3 of Title 2 of the Government Code.
36(e) After the exhaustion of the review procedures provided for
37in this section, the commissioner may apply to the appropriate
38superior court for a judgment in the amount of any administrative
39penalty imposed pursuant to subdivision (a) and an order
40compelling the person cited to comply with the order of the
P25 1commissioner. The application, which shall include a certified
2copy of the final order of the commissioner, shall constitute a
3sufficient showing to warrant issuing the judgment and order.
4(f) Failure of any person to comply with the terms of a citation
5or pay a fine assessed pursuant to this section, within a reasonable
6period specified by the commissioner, shall subject that person to
7disciplinary action by the
commissioner. In no event may a license
8be issued or renewed if an unpaid fine remains outstanding or the
9terms of a citation have not been complied with.
10(g) This section shall become operative on July 1, 2018.
Section 10082 of the Business and Professions Code
13 is amended to read:
begin delete(a)end deletebegin delete end deleteThe commissioner may publish or cause to be
15published at appropriate intervals a directory or list of licensed
16brokers andbegin delete salesmenend deletebegin insert salespersonsend insert and may publish therewith
17such matter as he may deem pertinent to this part and Chapter 1
18(commencing with Section 11000) of Part 2. He shall furnish one
19copy of such directory to each licensed broker upon his request
20and the payment of an appropriate charge based upon cost of
21publication. Such
directory may contain copies of the Real Estate
22Law, Chapter 1 (commencing with Section 11000) of Part 2 of
23Division 4 of the Business and Professions Code, and the Rules
24and Regulations of the Real Estate Commissioner.
25(b) This section shall repeal on July 1, 2018.
end deleteSection 10082 is added to the Business and
27Professions Code, to read:
(a) The commissioner may publish or cause to be
29published at appropriate intervals a directory or list of licensed
30brokers and salespersons and may publish therewith such matter
31as he may deem pertinent to this part and Chapter 1 (commencing
32with Section 11000) of Part 2. He shall furnish one copy of such
33directory to each licensed broker upon his request and the payment
34of an appropriate charge based upon cost of publication. Such
35directory may contain copies of the Real Estate Law, Chapter 1
36(commencing with Section 11000) of Part 2 of Division 4 of the
37Business and Professions Code, and the Rules and Regulations of
38the Real Estate Commissioner.
39(b) This section shall become operative on July 1, 2018.
Section 10131.01 of the Business and Professions
2Code is amended to read:
(a) Subdivision (b) of Section 10131 does not apply
4to (1) the manager of a hotel, motel, auto and trailer park, to the
5resident manager of an apartment building, apartment complex,
6or court, or to the employees of that manager, or (2) any person
7or entity, including a person employed by a real estate broker,
8who, on behalf of another or others, solicits or arranges, or accepts
9reservations or money, or both, for transient occupancies described
10in paragraphs (1) and (2) of subdivision (b) of Section 1940 of the
11Civil Code, in a dwelling unit in a common interest development,
12as defined in Section 4100 of the Civil Code, in a dwelling unit in
13an apartment building or complex, or in a single-family home, or
14(3) any person other than the resident manager or employees of
15that manager, performing the following functions, who is
the
16employee of the property management firm retained to manage a
17residential apartment building or complex or court and who is
18performing under the supervision and control of a broker of record
19who is an employee of that property management firm or a
20salesperson licensed to the broker who meets certain minimum
21requirements as specified in a regulation issued by the
22commissioner:
23(A) Showing rental units and common areas to prospective
24tenants.
25(B) Providing or accepting preprinted rental applications, or
26responding to inquiries from a prospective tenant concerning the
27completion of the application.
28(C) Accepting deposits or fees for credit checks or administrative
29costs and accepting security deposits and rents.
30(D) Providing information about rental
rates and other terms
31and provisions of a lease or rental agreement, as set out in a
32schedule provided by an employer.
33(E) Accepting signed leases and rental agreements from
34prospective tenants.
35(b) A broker or salesperson shall exercise reasonable supervision
36and control over the activities of nonlicensed persons acting under
37paragraph (3) of subdivision (a).
38(c) A broker employing nonlicensed persons to act under
39paragraph (3) of subdivision (a) shall comply with Section 10163
P27 1for each apartment building or complex or court where the
2nonlicensed persons are employed.
3(d) This section shall repeal on July 1, 2018.
Section 10131.01 is added to the Business and
5Professions Code, to read:
(a) Subdivision (b) of Section 10131 does not apply
7to (1) the manager of a hotel, motel, auto and trailer park, to the
8resident manager of an apartment building, apartment complex,
9or court, or to the employees of that manager, or (2) any person
10or entity, including a person retained by a real estate broker, who,
11on behalf of another or others, solicits or arranges, or accepts
12reservations or money, or both, for transient occupancies described
13in paragraphs (1) and (2) of subdivision (b) of Section 1940 of the
14Civil Code, in a dwelling unit in a common interest development,
15as defined in Section 4100 of the Civil Code, in a dwelling unit in
16an apartment building or complex, or in a single-family home, or
17(3) any person other than the resident manager or employees of
18that manager, performing the
following functions, who is the
19employee of the property management firm retained to manage a
20residential apartment building or complex or court and who is
21performing under the supervision and control of a broker of record
22who is an employee of that property management firm or a
23salesperson licensed to the broker who meets certain minimum
24requirements as specified in a regulation issued by the
25commissioner:
26(A) Showing rental units and common areas to prospective
27tenants.
28(B) Providing or accepting preprinted rental applications, or
29responding to inquiries from a prospective tenant concerning the
30completion of the application.
31(C) Accepting deposits or fees for credit checks or administrative
32costs and accepting security deposits and rents.
33(D) Providing information about rental rates and other terms
34and provisions of a lease or rental agreement, as set out in a
35schedule provided by an employer.
36(E) Accepting signed leases and rental agreements from
37prospective tenants.
38(b) A broker or salesperson shall exercise reasonable supervision
39and control over the activities of nonlicensed persons acting under
40paragraph (3) of subdivision (a).
P28 1(c) A broker employing nonlicensed persons to act under
2paragraph (3) of subdivision (a) shall comply with Section 10163
3for each apartment building or complex or court where the
4nonlicensed persons are employed.
5(e) This section shall become operative on July 1, 2018.
Section 10132 of the Business and Professions Code
8 is amended to read:
begin delete(a)end deletebegin delete end deleteA real estatebegin delete salesmanend deletebegin insert salespersonend insert within the
10meaning of this part is a natural person who, for a compensation
11or in expectation of a compensation, is employed by a licensed
12real estate broker to do one or more of the acts set forth in Sections
1310131, 10131.1, 10131.2, 10131.3, 10131.4, and 10131.6.
14(b) This section shall repeal on July 1, 2018.
end deleteSection 10132 is added to the Business and
16Professions Code, to read:
(a) A real estate salesperson within the meaning of this
18part is a natural person who, for a compensation or in expectation
19of a compensation, is retained by a licensed real estate broker to
20do one or more of the acts set forth in Sections 10131, 10131.1,
2110131.2, 10131.3, 10131.4, and 10131.6.
22(b) This section shall become operative on July 1, 2018.
Section 10133.1 of the Business and Professions Code
25 is amended to read:
(a) Subdivisions (d) and (e) of Section 10131, Section
2710131.1, Article 5 (commencing with Section 10230), and Article
287 (commencing with Section 10240) of this code and Section
291695.13 of the Civil Code do not apply to any of the following:
30(1) Any person or employee thereof doing business under any
31law of this state, any other state, or the United States relating to
32banks, trust companies, savings and loan associations, industrial
33loan companies, pension trusts, credit unions, or insurance
34companies.
35(2) Any nonprofit cooperative association organized under
36Chapter 1 (commencing with Section 54001) of Division 20 of the
37Food and Agricultural Code, in loaning or advancing money in
38connection with
any activity mentioned therein.
39(3) Any corporation, association, syndicate, joint stock company,
40or partnership engaged exclusively in the business of marketing
P29 1agricultural, horticultural, viticultural, dairy, livestock, poultry, or
2bee products on a cooperative nonprofit basis, in loaning or
3advancing money to the members thereof or in connection with
4any business of that type.
5(4) Any corporation securing money or credit from any federal
6intermediate credit bank organized and existing pursuant to the
7provisions of an act of Congress entitled the “Agricultural Credits
8Act of 1923,” in loaning or advancing money or credit so secured.
9(5) Any person licensed to practice law in this state, not actively
10and principally engaged in the business of negotiating loans secured
11by real property, when that person renders
services in the course
12of his or her practice as an attorney at law, and the disbursements
13of that person, whether paid by the borrower or other person, are
14not charges or costs and expenses regulated by or subject to the
15limitations of Article 7 (commencing with Section 10240), and
16the fees and disbursements are not shared, directly or indirectly,
17with the person negotiating the loan or the lender.
18(6) Any person licensed as a finance lender when acting under
19the authority of that license.
20(7) Any cemetery authority as defined by Section 7018 of the
21Health and Safety Code, that is authorized to do business in this
22state or its authorized agent.
23(8) Any person authorized in writing by a savings institution to
24act as an agent of that institution, as authorized by Section 6520
25of the Financial Code or comparable
authority of the Office of
26begin delete Thrift Supervisionend deletebegin insert the Comptroller of the Currencyend insert of the United
27States Department of the Treasury by its regulations, when acting
28under the authority of that written authorization.
29(9) Any person who is licensed as a securities broker or
30securities dealer under any law of this state, or of the United States,
31or any employee, officer, or agent of that person, if that person,
32employee, officer, or agent is acting within the scope of authority
33granted by that license in connection with a transaction involving
34the offer, sale, purchase, or exchange of a security representing an
35ownership interest in a pool of promissory notes secured directly
36or indirectly by liens on real property, which transaction is subject
37to any law of this
state or the United States regulating the offer or
38sale of securities.
39(10) Any person licensed as a residential mortgage lender or
40servicer when acting under the authority of that license.
P30 1(11) Any organization that has been approved by the United
2States Department of Housing and Urban Development pursuant
3to Section 106(a)(1)(iii) of the federal Housing and Urban
4Development Act of 1968 (12 U.S.C. Sec. 1701x), to provide
5counseling services, or an employee of such an organization, when
6those services are provided at no cost to the borrower and are in
7connection with the modification of the terms of a loan secured
8directly or collaterally by a lien on residential real property
9containing four or fewer dwelling units.
10(b) Persons described in paragraph (1), (2), or (3), as follows,
11are exempt from the provisions of
subdivisions (d) and (e) of
12Section 10131 or Section 10131.1 with respect to the collection
13of payments or performance of services for lenders or on notes of
14owners in connection with loans secured directly or collaterally
15by liens on real property:
16(1) The person makes collections on 10 or less of those loans,
17or in amounts of forty thousand dollars ($40,000) or less, in any
18calendar year.
19(2) The person is a corporation licensed as an escrow agent
20under Division 6 (commencing with Section 17000) of the
21Financial Code and the payments are deposited and maintained in
22the escrow agent’s trust account.
23(3) An employee of a real estate broker who is acting as the
24agent of a person described in paragraph (4) of subdivision (b) of
25Section 10232.4.
26For purposes of this
subdivision, performance of services does
27not include soliciting borrowers, lenders, or purchasers for, or
28negotiating, loans secured directly or collaterally by a lien on real
29property.
30(c) (1) Subdivision (d) of Section 10131 does not apply to an
31employee of a real estate broker who, on behalf of the broker,
32assists the broker in meeting the broker’s obligations to its
33customers in residential mortgage loan transactions, as defined in
34Section 50003 of the Financial Code, where the lender is an
35institutional lender, as defined in Section 50003 of the Financial
36Code, provided the employee does not participate in any
37negotiations occurring between the principals.
38(2) A broker shall exercise reasonable supervision and control
39over the activities of nonlicensed employees acting under this
P31 1subdivision, and shall comply with Section 10163 for each location
2where
the nonlicensed persons are employed.
3This section does not restrict the ability of the commissioner to
4discipline a broker or corporate broker licensee or its designated
5officer, or both the corporate broker licensee and its designated
6officer, for misconduct of a nonlicensed employee acting under
7this subdivision, or, pursuant to Section 10080, to adopt, amend,
8or repeal rules or regulations governing the employment or
9supervision of an employee who is a nonlicensed person as
10described in this subdivision.
11(d) This section shall repeal on July 1, 2018.
end deleteSection 10133.1 is added to the Business and
13Professions Code, to read:
(a) Subdivisions (d) and (e) of Section 10131, Section
1510131.1, Article 5 (commencing with Section 10230), and Article
167 (commencing with Section 10240) of this code and Section
171695.13 of the Civil Code do not apply to any of the following:
18(1) Any person or employee thereof doing business under any
19law of this state, any other state, or the United States relating to
20banks, trust companies, savings and loan associations, industrial
21loan companies, pension trusts, credit unions, or insurance
22companies.
23(2) Any nonprofit cooperative association organized under
24Chapter 1 (commencing with Section 54001) of Division 20 of the
25Food and Agricultural Code, in loaning or advancing
money in
26connection with any activity mentioned therein.
27(3) Any corporation, association, syndicate, joint stock company,
28or partnership engaged exclusively in the business of marketing
29agricultural, horticultural, viticultural, dairy, livestock, poultry, or
30bee products on a cooperative nonprofit basis, in loaning or
31advancing money to the members thereof or in connection with
32any business of that type.
33(4) Any corporation securing money or credit from any federal
34intermediate credit bank organized and existing pursuant to the
35provisions of an act of Congress entitled the “Agricultural Credits
36Act of 1923,” in loaning or advancing money or credit so secured.
37(5) Any person licensed to practice law in this state, not actively
38and principally engaged in the business of negotiating loans secured
39by real property, when
that person renders services in the course
40of his or her practice as an attorney at law, and the disbursements
P32 1of that person, whether paid by the borrower or other person, are
2not charges or costs and expenses regulated by or subject to the
3limitations of Article 7 (commencing with Section 10240), and
4the fees and disbursements are not shared, directly or indirectly,
5with the person negotiating the loan or the lender.
6(6) Any person licensed as a finance lender when acting under
7the authority of that license.
8(7) Any cemetery authority as defined by Section 7018 of the
9Health and Safety Code, that is authorized to do business in this
10state or its authorized agent.
11(8) Any person authorized in writing by a savings institution to
12act as an agent of that institution, as authorized by Section 6520
13of the Financial Code
or comparable authority of the Office of the
14Comptroller of the Currency of the United States Department of
15the Treasury by its regulations, when acting under the authority
16of that written authorization.
17(9) Any person who is licensed as a securities broker or
18securities dealer under any law of this state, or of the United States,
19or any employee, officer, or agent of that person, if that person,
20employee, officer, or agent is acting within the scope of authority
21granted by that license in connection with a transaction involving
22the offer, sale, purchase, or exchange of a security representing an
23ownership interest in a pool of promissory notes secured directly
24or indirectly by liens on real property, which transaction is subject
25to any law of this state or the United States regulating the offer or
26sale of securities.
27(10) Any person licensed as a mortgage loan lender or servicer
28
when acting under the authority of that license.
29(11) Any organization that has been approved by the United
30States Department of Housing and Urban Development pursuant
31to Section 106(a)(1)(iii) of the federal Housing and Urban
32Development Act of 1968 (12 U.S.C. Sec. 1701x), to provide
33counseling services, or an employee of such an organization, when
34those services are provided at no cost to the borrower and are in
35connection with the modification of the terms of a loan secured
36directly or collaterally by a lien on residential real property
37containing four or fewer dwelling units.
38(b) Persons described in paragraph (1), (2), or (3), as follows,
39are exempt from the provisions of subdivisions (d) and (e) of
40Section 10131 or Section 10131.1 with respect to the collection
P33 1of payments or performance of services for lenders or on notes of
2owners in connection with loans secured directly
or collaterally
3by liens on real property:
4(1) The person makes collections on 10 or less of those loans,
5or in amounts of forty thousand dollars ($40,000) or less, in any
6calendar year.
7(2) The person is a corporation licensed as an escrow agent
8under Division 6 (commencing with Section 17000) of the
9Financial Code and the payments are deposited and maintained in
10the escrow agent’s trust account.
11(3) An employee of a real estate broker who is acting as the
12agent of a person described in paragraph (4) of subdivision (b) of
13Section 10232.4.
14For purposes of this subdivision, performance of services does
15not include soliciting borrowers, lenders, or purchasers for, or
16negotiating, loans secured directly or collaterally by a lien on real
17property.
18(c) (1) Subdivision (d) of Section 10131 does not apply to an
19employee of a real estate broker who, on behalf of the broker,
20assists the broker in meeting the broker’s obligations to its
21customers in residential mortgage loan transactions, as defined in
22Section 50003 of the Financial Code, where the lender is an
23institutional lender, as defined in Section 50003 of the Financial
24Code, provided the employee does not participate in any
25negotiations occurring between the principals.
26(2) A broker shall exercise reasonable supervision and control
27over the activities of nonlicensed employees acting under this
28subdivision, and shall comply with Section 10163 for each location
29where the nonlicensed persons are employed.
30This section does not restrict the ability of the commissioner to
31discipline a broker or corporate broker
licensee or its designated
32officer, or both the corporate broker licensee and its designated
33officer, for misconduct of a nonlicensed employee acting under
34this subdivision, or, pursuant to Section 10080, to adopt, amend,
35or repeal rules or regulations governing the employment or
36supervision of an employee who is a nonlicensed person as
37described in this subdivision.
38(d) This section shall become operative on July 1, 2018.
Section 10136 of the Business and Professions Code
3 is amended to read:
begin delete(a)end deletebegin delete end deleteNo person engaged in the business or acting in the
5capacity of a real estate broker or a real estatebegin delete salesmanend deletebegin insert salespersonend insert
6 within thisbegin delete Stateend deletebegin insert stateend insert shall bring or maintain any action in the
7courts of thisbegin delete Stateend deletebegin insert
stateend insert for the collection of compensation for the
8performance of any of the acts mentioned in this article without
9alleging and proving that hebegin insert or sheend insert was a duly licensed real estate
10broker or real estatebegin delete salesmanend deletebegin insert salespersonend insert at the time the alleged
11cause of action arose.
12(b) This section shall repeal on July 1, 2018.
end deleteSection 10136 is added to the Business and
14Professions Code, to read:
(a) No person engaged in the business or acting in the
16capacity of a real estate broker or a real estate salesperson within
17this state shall bring or maintain any action in the courts of this
18state for the collection of compensation for the performance of
19any of the acts mentioned in this article without alleging and
20proving that he was a duly licensed real estate broker or real estate
21salesperson at the time the alleged cause of action arose.
22(b) This section shall become operative on July 1, 2018.
Section 10137 of the Business and Professions Code
25 is amended to read:
begin delete(a)end deletebegin delete end deleteIt is unlawful for any licensed real estate broker to
27employ or compensate, directly or indirectly, any person for
28performing any of the acts within the scope of this chapter who is
29not a licensed real estate broker, or a real estate salesperson
30licensed under the broker employing or compensating him or her,
31or to employ or compensate, directly or indirectly, any licensee
32for engaging in any activity for which a mortgage loan originator
33license endorsement is required, if that licensee does not hold a
34mortgage loan originator license endorsement; provided, however,
35that a licensed real estate broker may pay a commission to a broker
36of another state.
37(b) No
end delete
38begin insertNoend insert real estate salesperson shall be employed by or accept
39compensationbegin insert for activity requiring a real estate licenseend insert from any
P35 1person other than the broker under whom he or she is at the time
2licensed.
3(c) It
end delete
4begin insertItend insert is unlawful for any licensed real estate salesperson to pay any
5compensation for performing any of the acts within the
scope of
6this chapter to any real estate licensee except through the broker
7under whom he or she is at the time licensed.
8(d) For
end delete
9begin insertForend insert a violation of any of the provisions of this section, the
10commissioner may temporarily suspend or permanently revoke
11the license of the real estate licensee, in accordance with the
12provisions of this part relating to hearings.
13(e) This section shall repeal on July 1, 2018.
end deleteSection 10137 is added to the Business and
15Professions Code, to read:
(a) It is unlawful for any licensed real estate broker to
17compensate, directly or indirectly, any person for performing any
18of the acts within the scope of this chapter who is not a licensed
19real estate broker, or a real estate salesperson licensed under the
20broker affiliated with that broker or to compensate, directly or
21indirectly that person’s broker, any licensee for engaging in any
22activity for which a mortgage loan originator license endorsement
23is required, if that licensee does not hold a mortgage loan originator
24license endorsement; provided, however, that a licensed real estate
25broker may pay a commission to a broker of another state.
26(b) No real estate salesperson shall accept compensation for
27activity requiring a real estate
license from any person other than
28the broker under whom he or she is at the time licensed.
29(c) It is unlawful for any licensed real estate salesperson to pay
30any compensation for performing any of the acts within the scope
31of this chapter to any real estate licensee except through the
32responsible broker under whom he or she is at the time licensed.
33A licensee may enter into an agreement with another licensee to
34share such compensation provided that any such compensation is
35paid through the responsible broker.
36(d) For a violation of any of the provisions of this section, the
37commissioner may temporarily suspend or permanently revoke
38the license of the real estate licensee, in accordance with the
39provisions of this part relating to hearings.
40(e) This section shall become operative on July 1, 2018.
Section 10140.5 of the Business and Professions Code
3 is amended to read:
begin delete(a)end deletebegin delete end deleteEach advertisement or other statement which is
5published by a real estate broker orbegin delete salesmanend deletebegin insert salespersonend insert offering
6to assist persons to file applications for the purchase or lease of,
7or to locate or enter upon, lands owned by the state or federal
8government shall, when published, indicate the name of the broker
9for whom it is published and state thatbegin delete heend deletebegin insert
the brokerend insert is licensed as
10a real estate broker by the State of California.
11(b) This section shall repeal on July 1, 2018.
end deleteSection 10140.5 is added to the Business and
13Professions Code, to read:
(a) Each advertisement or other statement which is
15published by a real estate broker or salesperson offering to assist
16persons to file applications for the purchase or lease of, or to locate
17or enter upon, lands owned by the state or federal government
18shall, when published, indicate the name of the broker for whom
19it is published and state that he is licensed as a real estate broker
20by the State of California.
21(b) This section shall become operative on July 1, 2018.
Section 10142 of the Business and Professions Code
23 is amended to read:
(a) When a licensee prepares or has prepared an
25agreement authorizing or employing such licensee to perform any
26of the acts for which he is required to hold a license, or when such
27licensee secures the signature of any person to any contract
28pertaining to such services or transaction, he shall deliver a copy
29of the agreement to the person signing it at the time the signature
30is obtained.
31(b) This section shall repeal on July 1, 2018.
Section 10142 is added to the Business and
33Professions Code, to read:
(a) When a licensee prepares or has prepared an
35agreement authorizing or retaining such licensee to perform any
36of the acts for which he is required to hold a license, or when such
37licensee secures the signature of any person to any contract
38pertaining to such services or transaction, he shall deliver a copy,
39either in printed or electronic format, of the agreement to the person
P37 1signing it as soon as practicable after the time the signature is
2obtained.
3(b) This section shall become operative on July 1, 2018.
Section 10143.5 of the Business and Professions Code
6 is amended to read:
begin delete(a)end deletebegin delete end deleteAny real estate broker who assists another or
8others, or whose real estatebegin delete salesmenend deletebegin insert salespersonsend insert assist another
9or others, for a compensation, in filing an application for the
10purchase or lease of, or in locating or entering upon, lands owned
11by thebegin delete State or Federal Governmentend deletebegin insert
state or federal governmentend insert
12 shall report to the commissioner the names and addresses of all
13persons he or hisbegin delete salesmenend deletebegin insert salespersonsend insert have assisted in filing
14applications for land owned by thebegin delete State or Federal Governmentend delete
15begin insert state or federal governmentend insert and the amount of compensation
16received from such persons. The report shall be filed quarterly
17within 10 days after the end of each calendar quarter.
18(b) This section shall repeal on July 1, 2018.
end deleteSection 10143.5 is added to the Business and
20Professions Code, to read:
(a) Any real estate broker who assists another or
22others, or whose real estate salespersons assist another or others,
23for a compensation, in filing an application for the purchase or
24lease of, or in locating or entering upon, lands owned by the state
25or federal government shall report to the commissioner the names
26and addresses of all persons he or his salespersons have assisted
27in filing applications for land owned by the state or federal
28government and the amount of compensation received from such
29persons. The report shall be filed quarterly within 10 days after
30the end of each calendar quarter.
31(b) This section shall become operative on July 1, 2018.
Section 10144 of the Business and Professions Code
34 is amended to read:
begin delete(a)end deletebegin delete end deleteThe commissioner may prescribe by regulation the
36information which shall be contained in contracts or other
37agreements by a real estate broker, or a real estatebegin delete salesman,end delete
38begin insert salesperson,end insert to assist another or others in filing an application for
39the purchase or lease of, or in locating or entering upon, lands
40owned by thebegin delete State or Federal Government,end deletebegin insert
state or federal
P38 1government,end insert including, but not limited to, information with regard
2to the services agreed to be performed and information with regard
3to the hazards which may prevent the person to be assisted in filing
4an application with thebegin delete State or Federal
Governmentend delete
5federal governmentend insert ever receiving any state or federal land under
6the application.
7(b) This section shall repeal on July 1, 2018.
end deleteSection 10144 is added to the Business and
9Professions Code, to read:
(a) The commissioner may prescribe by regulation the
11information which shall be contained in contracts or other
12agreements by a real estate broker, or a real estate salesperson, to
13assist another or others in filing an application for the purchase or
14lease of, or in locating or entering upon, lands owned by the state
15or federal government, including, but not limited to, information
16with regard to the services agreed to be performed and information
17with regard to the hazards which may prevent the person to be
18assisted in filing an application with the state or federal government
19ever receiving any state or federal land under the application.
20(b) This section shall become operative on July 1, 2018.
Section 10158 of the Business and Professions Code
22 is amended to read:
(a) When a real estate license is issued to a corporation,
24if it desires any of its officers other than the officer designated by
25it pursuant to Section 10211, to act under its license as a real estate
26broker, it shall procure an additional license to so employ each of
27such additional officers.
28(b) This section shall repeal on July 1, 2018.
Section 10158 is added to the Business and
30Professions Code, to read:
(a) When a real estate license is issued to a corporation,
32if it desires any of its officers other than the officer designated by
33it pursuant to Section 10211, to act under its license as a real estate
34broker, it shall procure an additional license to retain each of such
35additional officers. In the event of death or incapacity of a sole
36designated broker-officer, a corporation may operate continuously
37under its existing license if notice of the event is filed with the
38bureau before midnight of the 10th day after the event.
39(b) This section shall become operative on July 1, 2018.
Section 10159 of the Business and Professions Code
2 is amended to read:
(a) Each officer of a corporation through whom it is
4licensed to act as a real estate broker is, while so employed under
5such license, a licensed real estate broker, but licensed only to act
6as such for and on behalf of the corporation as an officer.
7(b) This section shall repeal on July 1, 2018.
Section 10159 is added to the Business and
9Professions Code, to read:
Each officer of a corporation through whom it is
11licensed to act as a real estate broker need not be a licensed real
12estate broker, but if not, is licensed only to act as such for and on
13behalf of the corporation as an officer. This does not preclude a
14designated corporate officer who has a separate individual license
15from conducting licensed activity for another entity if the entity
16for which he or she acts is clearly disclosed and apparent to any
17member of the public using his or her services outside the
18corporation.
19When a corporation wishes to act as a real estate broker, the
20corporation shall be licensed by the bureau through qualified broker
21officers, who have either passed the broker license examination
22and are now qualified to obtain a broker license, or who are
23currently
licensed as real estate brokers. An officer of a corporation
24through whom it is licensed to act need not maintain an individual
25broker’s license, but is otherwise subject to all duties and
26responsibilities of a licensed broker.
27This section shall become operative on July 1, 2018.
Section 10159.6 of the Business and Professions
29Code is amended to read:
All of the following apply to use of a team name, as
31defined in paragraph (5) of subdivision (a) of Section 10159.7:
32(a) Notwithstanding subdivision (b) of Section 10140.6,
33advertising and solicitation materials that contain a team name,
34including print or electronic media and “for sale” signage, shall
35include, and display in a conspicuous and prominent manner, the
36team name and the name and license number of at least one of the
37licensed members of the team.
38(b) The responsible broker’s identity, as defined in paragraph
39(1) of subdivision (a) of Section 10159.7, shall be displayed as
P40 1prominently and conspicuously as the team name in all advertising
2and solicitation materials.
3(c) The advertising and solicitation materials shall not contain
4terms that imply the existence of a real estate entity independent
5of the responsible broker.
6(d) Notwithstanding Section 10185, a violation of this section
7is not a misdemeanor.
8(e) This section shall repeal on July 1, 2018.
Section 10159.6 is added to the Business and
10Professions Code, to read:
All of the following apply to use of a team name, as
12defined in paragraph (3) of subdivision (a) of Section 10159.7:
13(a) Notwithstanding subdivision (b) of Section 10140.6,
14advertising and solicitation materials that contain a team name,
15including print or electronic media and “for sale” signage, shall
16include, and display in a conspicuous and prominent manner, the
17team name and the name and license number of at least one of the
18licensed members of the team.
19(b) The responsible broker’s identity shall be displayed as
20prominently and conspicuously as the team name in all advertising
21and solicitation materials.
22(c) The advertising and
solicitation materials shall not contain
23terms that imply the existence of a real estate entity independent
24of the responsible broker.
25(d) Notwithstanding Section 10185, a violation of this section
26is not a misdemeanor.
27(e) This section shall become operative on July 1, 2018.
Section 10159.7 of the Business and Professions
29Code is amended to read:
(a) For the purposes of this article, the following
31definitions shall apply:
32(1) “Responsible broker’s identity” means a name and the
33associated license identification number under which the
34responsible broker is currently licensed by the bureau and conducts
35business in general or is a substantial division of the real estate
36firm. Responsible broker’s identity does not include a fictitious
37business name obtained pursuant to paragraph (2) of subdivision
38(a) of Section 10159.5 or the use of a team name pursuant to
39Section 10159.6.
P41 1(2) “Fictitious business name” means a professional identity or
2brand name under which activity requiring a real estate license is
3conducted and the use of which is
subject to approval by the bureau
4pursuant to Section 10159.5.
5(3) “Ownership of a fictitious business name” means the right
6to use, renew, and control the use of a fictitious business name
7obtained in accordance with Section 10159.5.
8(4) “Responsible broker” means the broker responsible for the
9exercise of control and supervision of salespersons under Section
1010159.2, or a licensee subject to discipline under subdivision (h)
11of Section 10177 for failure to supervise activity requiring a real
12estate license. The supervision of a salesperson required under this
13part or any other law is limited to regulatory compliance and
14consumer protection.
15(5) “Team name” means a professional identity or brand name
16used by a salesperson, and one or more other real estate licensees,
17for the provision of real estate licensed
services. Notwithstanding
18any other law, the use of a team name does not require that a
19separate license be issued for that name pursuant to Section
2010159.5. A team name does not constitute a fictitious business
21name for purposes of this part or any other law or for purposes of
22filing a fictitious business name statement with an application as
23required by subdivision (a) of Section 10159.5 if all of the
24following apply:
25(A) The name is used by two or more real estate licensees who
26work together to provide licensed real estate services, or who
27represent themselves to the public as being a part of a team, group,
28or association to provide those services.
29(B) The name includes the surname of at least one of the licensee
30members of the team, group, or association in conjunction with
31the term “associates,” “group,” or “team.”
32(C) The name does not include any term or terms, such as “real
33estate broker,” “real estate brokerage,” “broker,” or “brokerage”
34or any other term that would lead a member of the public to believe
35that the team is offering real estate brokerage services, that imply
36or suggest the existence of a real estate entity independent of a
37responsible broker.
38(b) Nothing in this section changes a real estate broker’s duties
39under this division to supervise a salesperson.
40(c) This section shall repeal on July 1, 2018.
Section 10159.7 is added to the Business and
2Professions Code, to read:
(a) For the purposes of this article, the following
4definitions shall apply:
5(1) “Fictitious business name” means a professional identity or
6brand name under which activity requiring a real estate license is
7conducted and the use of which is subject to approval by the bureau
8pursuant to Section 10159.5.
9(2) “Ownership of a fictitious business name” means the right
10to use, renew, and control the use of a fictitious business name
11obtained in accordance with Section 10159.5.
12(3) “Team name” means a professional identity or brand name
13used by a salesperson, and one or more other real estate licensees,
14for the
provision of real estate licensed services. Notwithstanding
15any other law, the use of a team name does not require that a
16separate license be issued for that name pursuant to Section
1710159.5. A team name does not constitute a fictitious business
18name for purposes of this part or any other law or for purposes of
19filing a fictitious business name statement with an application as
20required by subdivision (a) of Section 10159.5 if all of the
21following apply:
22(A) The name is used by two or more real estate licensees who
23work together to provide licensed real estate services, or who
24represent themselves to the public as being a part of a team, group,
25or association to provide those services.
26(B) The name includes the surname of at least one of the licensee
27members of the team, group, or association in conjunction with
28the term “associates,” “group,” or “team.”
29(C) The name does not include any term or terms, such as “real
30estate broker,” “real estate brokerage,” “broker,” or “brokerage”
31or any other term that would lead a member of the public to believe
32that the team is offering real estate brokerage services, that imply
33or suggest the existence of a real estate entity independent of a
34responsible broker.
35(b) Nothing in this section changes a real estate broker’s duties
36under this division to supervise a salesperson.
37(c) This section shall become operative on July 1, 2018.
Section 10160 of the Business and Professions Code
39 is amended to read:
(a) The real estate salesman’s license shall remain in
2the possession of the licensed real estate broker employer until
3canceled or until the salesman leaves the employ of the broker,
4and the broker shall make his license and the licenses of his
5salesman available for inspection by the commissioner or his
6designated representative.
7(b) This section shall repeal on July 1, 2017.
Section 10161.5 of the Business and Professions Code
10 is amended to read:
begin delete(a)end deletebegin delete end deleteWhen the holder of a real estate broker’s or
12begin delete salesman’send deletebegin insert salesperson’send insert license is required to relinquish hisbegin insert or
13herend insert license to assume an office in local, state, or federal
14government, hebegin insert or sheend insert may have it reinstated at any time
within
15six months of termination of hisbegin insert or herend insert service in office upon
16payment of the appropriate renewal fee, and compliance with the
17provisions of Article 2.5 (commencing with Section 10170) of this
18chapter, if the relinquished license was issued four or more years
19prior to hisbegin insert or herend insert application for reinstatement.
20(b) This section shall repeal on July 1, 2018.
end deleteSection 10161.5 is added to the Business and
22Professions Code, to read:
(a) When the holder of a real estate broker’s or
24salesperson’s license is required to relinquish his license to assume
25an office in local, state, or federal government, he may have it
26reinstated at any time within six months of termination of his
27service in office upon payment of the appropriate renewal fee, and
28compliance with the provisions of Article 2.5 (commencing with
29Section 10170) of this chapter, if the relinquished license was
30issued four or more years prior to his application for reinstatement.
31(b) This section shall become operative on July 1, 2018.
Section 10161.8 of the Business and Professions Code
34 is amended to read:
(a) Whenever a real estatebegin delete salesmanend deletebegin insert salespersonend insert
36 enters the employ of a real estate broker, the broker shall
37immediately notify the commissioner thereof in writing.
38(b) Whenever employment of a real estatebegin delete salesmanend deletebegin insert salespersonend insert
39 is terminated, the broker shall immediately notify the commissioner
40thereof in writing.
P44 1(c) Whenever a licensee acquires a business address different
2from the address shown on hisbegin insert or herend insert license hebegin insert or sheend insert shall mark
3out the former address on the face of the license and type or write
4the new main office address in ink on the reverse side, and date
5and initial same.
6(d) Whenever a real estatebegin delete salesmanend deletebegin insert salespersonend insert enters the
7employ of a new real estate broker hebegin insert
or sheend insert shall mark out the
8name of hisbegin insert or herend insert former broker on the face of the license and
9type or write the name of the new employing broker in ink on the
10reverse side, and date and initial same.
11(e) This section shall repeal on July 1, 2018.
end deleteSection 10161.8 is added to the Business and
13Professions Code, to read:
(a) A broker and a real estate licensee shall
15immediately notify the commissioner in a manner designated by
16the commissioner whenever any of the following occur:
17(1) A real estate licensee affiliates as an independent contractor
18with or is otherwise retained by a real estate broker to conduct
19licensed activities.
20(2) A real estate licensee’s affiliation with a broker is terminated.
21(3) A real estate licensee affiliated with or retained by a broker
22acquires a business address different from the address shown on
23the records maintained by the commissioner.
24(4) A real estate licensee affiliates as an independent contractor,
25or is otherwise retained by, a new real estate broker to conduct
26licensed activities.
27(b) This section shall become operative on July 1, 2018.
Section 10164 of the Business and Professions Code
29 is amended to read:
(a) An employing broker or corporate designated broker
31officer may appoint a licensee as a manager of a branch office or
32division of the employing broker’s or employing corporate
33designated broker officer’s real estate business and delegate to the
34appointed manager the responsibility to oversee day-to-day
35operations, supervise the licensed activities of licensees, and
36supervise clerical staff employed in the branch office or division.
37(b) Notwithstanding subdivision (a), nothing in this section shall
38be construed to limit the responsibilities of an employing broker
39or a corporate designated broker officer pursuant to subdivision
40(h) of Section 10177. A licensee accepting appointment as a
P45 1manager shall be subject to disciplinary action pursuant to Section
210165
for failure to properly supervise licensed activity pursuant
3to subdivision (a).
4(c) Appointment of a manager shall only be made by means of
5a written contract in which the manager accepts the delegated
6responsibility. The appointing employing broker or corporate
7designated broker officer shall retain a copy of the contract and
8send a notice to the department, in a form approved by the
9commissioner, identifying the appointed manager and the branch
10office or division the manager is appointed to supervise.
11(d) A licensee shall not be appointed as a manager if any of the
12following apply:
13(1) The licensee holds a restricted license.
14(2) The licensee is or has been subject to an order of debarment.
15(3) The licensee is a salesperson with less than two years of
16full-time real estate experience within five years preceding the
17appointment.
18(e) Whenever an appointment of a branch manager is terminated
19or changed, the employing broker or corporate designated broker
20officer shall immediately notify the commissioner thereof in
21writing.
22(f) This section shall repeal on July, 1, 2018.
Section 10164 is added to the Business and
24Professions Code, to read:
(a) A responsible broker or corporate designated broker
26officer may appoint a licensee as a manager of a branch office or
27division of the broker’s real estate business and delegate to the
28appointed manager the responsibility to oversee day-to-day
29operations, supervise the licensed activities of licensees, and
30supervise clerical staff employed in the branch office or division.
31(b) Notwithstanding subdivision (a), nothing in this section shall
32be construed to limit the responsibilities of a responsible broker
33or a designated broker corporate officer pursuant to subdivision
34(h) of Section 10177. A licensee accepting appointment as a
35manager shall be subject to disciplinary action pursuant to Section
3610165 for failure to properly supervise
licensed activity pursuant
37to subdivision (a).
38(c) Appointment of a manager shall only be made by means of
39a written contract in which the manager accepts the delegated
40responsibility. The appointing broker shall retain a copy of the
P46 1contract and send a notice to the department, in a form approved
2by the commissioner, identifying the appointed manager and the
3branch office or division the manager is appointed to supervise.
4(d) A licensee shall not be appointed as a manager if any of the
5following apply:
6(1) The licensee holds a restricted license.
7(2) The licensee is or has been subject to an order of debarment.
8(3) The licensee is a salesperson with less than two years of
9full-time real
estate experience within five years preceding the
10appointment.
11(e) Whenever an appointment of a branch manager is terminated
12or changed, the appointing broker shall immediately notify the
13commissioner thereof in writing.
14(f) This section shall become operative on July 1, 2018.
Section 10166.03 of the Business and Professions
16Code is amended to read:
(a) A loan processor or underwriter who does not
18represent to the public, through advertising or other means of
19communicating or providing information, including the use of
20business cards, stationery, brochures, signs, rate lists, or other
21promotional items, that the individual can or will perform any of
22the activities of a mortgage loan originator shall not be required
23to obtain a license endorsement as a mortgage loan originator.
24(b) An individual engaging solely in loan processor or
25underwriter activities shall not represent to the public, through
26advertising or other means of communicating or providing
27information including the use of business cards, stationery,
28brochures, signs, rate lists, or other promotional items, that the
29individual can or will
perform any of the activities of a mortgage
30loan originator.
31(c) An independent contractor who is employed by a mortgage
32loan originator may not engage in the activities of a loan processor
33or underwriter for a residential mortgage loan unless the
34independent contractor loan processor or underwriter obtains and
35maintains an endorsement as a mortgage loan originator under this
36article. Each independent contractor loan processor or underwriter
37who obtains and maintains an endorsement as a mortgage loan
38originator under this article shall have and maintain a valid unique
39identifier issued by the Nationwide Mortgage Licensing System
40and Registry.
P47 1(d) This section shall repeal on July 1, 2018.
Section 10166.03 is added to the Business and
3Professions Code, to read:
(a) A loan processor or underwriter who does not
5represent to the public, through advertising or other means of
6communicating or providing information, including the use of
7business cards, stationery, brochures, signs, rate lists, or other
8promotional items, that the individual can or will perform any of
9the activities of a mortgage loan originator shall not be required
10to obtain a license endorsement as a mortgage loan originator.
11(b) An individual engaging solely in loan processor or
12underwriter activities shall not represent to the public, through
13advertising or other means of communicating or providing
14information including the use of business cards, stationery,
15brochures, signs, rate lists, or other promotional items, that the
16
individual can or will perform any of the activities of a mortgage
17loan originator.
18(c) An independent contractor who is retained by a mortgage
19loan originator may not engage in the activities of a loan processor
20or underwriter for a residential mortgage loan unless the
21independent contractor loan processor or underwriter obtains and
22maintains an endorsement as a mortgage loan originator under this
23article. Each independent contractor loan processor or underwriter
24who obtains and maintains an endorsement as a mortgage loan
25originator under this article shall have and maintain a valid unique
26identifier issued by the Nationwide Mortgage Licensing System
27and Registry.
28(d) This section shall become operative on July 1, 2018.
Section 10176 of the Business and Professions Code
30 is amended to read:
(a) The commissioner may, upon his or her own
32motion, and shall, upon the verified complaint in writing of any
33person, investigate the actions of any person engaged in the
34business or acting in the capacity of a real estate licensee within
35this state, and he or she may temporarily suspend or permanently
36revoke a real estate license at any time where the licensee, while
37a real estate licensee, in performing or attempting to perform any
38of the acts within the scope of this chapter has been guilty of any
39of the following:
40(1) Making any substantial misrepresentation.
P48 1(2) Making any false promises of a character likely to influence,
2persuade, or induce.
3(3) A continued and flagrant course
of misrepresentation or
4making of false promises through real estate agents or salespersons.
5(4) Acting for more than one party in a transaction without the
6knowledge or consent of all parties thereto.
7(5) Commingling with his or her own money or property the
8money or other property of others which is received and held by
9him or
her.
10(6) Claiming, demanding, or receiving a fee, compensation, or
11commission under any exclusive agreement authorizing or
12employing a licensee to perform any acts set forth in Section 10131
13for compensation or commission where the agreement does not
14contain a definite, specified date of final and complete termination.
15(7) The
claiming or taking by a licensee of any secret or
16undisclosed amount of compensation, commission, or profit or the
17failure of a licensee to reveal to the employer of the licensee the
18full amount of the licensee’s compensation, commission, or profit
19under any agreement authorizing or employing the licensee to do
20any acts for which a license is required under this chapter for
21compensation or commission prior to or coincident with the signing
22of an agreement evidencing the meeting of the minds of the
23contracting parties, regardless of the form of the agreement,
24whether evidenced by documents in an escrow or by any other or
25different procedure.
26(8) The use by a licensee of
any provision allowing the licensee
27an option to purchase in an agreement authorizing or employing
28the licensee to sell, buy, or exchange real estate or a business
29opportunity for compensation or commission, except when the
30licensee prior to or coincident with election to exercise the option
31to purchase reveals in writing to the employer the full amount of
32the licensee’s profit and obtains the written consent of the employer
33approving the amount of the profit.
34(9) Any other conduct, whether of the same or a different
35character than specified in this section, which constitutes fraud or
36dishonest dealing.
37(10) Obtaining the signature of a prospective purchaser to an
38agreement which provides that the prospective purchaser shall
39either transact the purchasing, leasing, renting, or exchanging of
40a business opportunity property through the broker obtaining the
P49 1signature, or pay a compensation to the broker if the property is
2purchased, leased, rented, or exchanged without the broker first
3having obtained the written authorization of the owner of the
4property concerned to offer the property for sale, lease, exchange,
5or rent.
6(11) Failing to disburse funds in accordance with a commitment
7to make a mortgage loan that is accepted by the applicant when
8the real estate broker represents to the applicant that the broker is
9either of the following:
10(A) The lender.
11(B) Authorized to issue the commitment on behalf of the lender
12or lenders in the
mortgage loan transaction.
13(12) Intentionally delaying the closing of a mortgage loan for
14the sole purpose of increasing interest, costs, fees, or charges
15payable by the borrower.
16(13) Violating any section, division, or article of law which
17provides that a violation of that section, division, or article of law
18by a licensed person
is a violation of that person’s licensing law,
19if it occurs within the scope of that person’s duties as a licensee.
20(b) This section shall repeal on July 1, 2018.
Section 10176 is added to the Business and
22Professions Code, to read:
(a) The commissioner may, upon his or her own
24motion, and shall, upon the verified complaint in writing of any
25person, investigate the actions of any person engaged in the
26business or acting in the capacity of a real estate licensee within
27this state, and he or she may temporarily suspend or permanently
28revoke a real estate license at any time where the licensee, while
29a real estate licensee, in performing or attempting to perform any
30of the acts within the scope of this chapter has been guilty of any
31of the following:
32(1) Making any substantial misrepresentation.
33(2) Making any false promises of a character likely to influence,
34persuade, or induce.
35(3) A continued and flagrant course of misrepresentation or
36making of false promises through licensees.
37(4) Acting for more than one party in a transaction without the
38knowledge or consent of all parties thereto.
P50 1(5) Commingling with his or her own money or property the
2money or other property of others which is received and held by
3him or her.
4(6) Claiming, demanding, or receiving a fee, compensation, or
5commission under any exclusive agreement authorizing or retaining
6a licensee to perform any acts set forth in Section 10131 for
7compensation or commission where the agreement does not contain
8a definite, specified date of final and complete termination.
9(7) The claiming or taking by a
licensee of any secret or
10undisclosed amount of compensation, commission, or profit or the
11failure of a licensee to reveal to the principal retaining the licensee
12the full amount of the licensee’s compensation, commission, or
13profit under any agreement authorizing or retaining the licensee
14to do any acts for which a license is required under this chapter
15for compensation or commission prior to or coincident with the
16signing of an agreement evidencing the meeting of the minds of
17the contracting parties, regardless of the form of the agreement,
18whether evidenced by documents in an escrow or by any other or
19different procedure.
20(8) The use by a licensee of any provision allowing the licensee
21an option to purchase in an agreement authorizing or retaining the
22licensee to sell, buy, or exchange real estate or a business
23opportunity for compensation or commission, except when the
24licensee prior to or coincident with election to exercise the option
25to
purchase reveals in writing to the responsible broker the full
26amount of the licensee’s profit and obtains the written consent of
27the responsible broker approving the amount of the profit.
28(9) Any other conduct, whether of the same or of a different
29character than specified in this section, which constitutes fraud or
30dishonest dealing.
31(10) Obtaining the signature of a prospective purchaser to an
32agreement which provides that the prospective purchaser shall
33either transact the purchasing, leasing, renting, or exchanging of
34a business opportunity property through the broker obtaining the
35signature or pay a compensation to the broker if the property is
36purchased, leased, rented, or exchanged without the broker first
37having obtained the written authorization of the owner of the
38property concerned to offer the property for sale, lease, exchange,
39or rent.
P51 1(11) Failing to disburse funds in accordance with a commitment
2to make a mortgage loan that is accepted by the applicant when
3the real estate broker represents to the applicant that the broker is
4either of the following:
5(A) The lender.
6(B) Authorized to issue the commitment on behalf of the lender
7or lenders in the mortgage loan transaction.
8(12) Intentionally delaying the closing of a mortgage loan for
9the sole purpose of increasing interest, costs, fees, or charges
10payable by the borrower.
11(13) Violating any section, division, or article of law which
12provides that a violation of that section, division, or article of law
13by a licensed person is a violation of that person’s licensing law
14if
it occurs within the scope of that person’s duties as a licensee.
15(b) This section shall become operative on July 1, 2018.
Section 10177 of the Business and Professions Code
17 is amended to read:
The commissioner may suspend or revoke the license
19of a real estate licensee, delay the renewal of a license of a real
20estate licensee, or deny the issuance of a license to an applicant,
21who has done any of the following, or may suspend or revoke the
22license of a corporation, delay the renewal of a license of a
23corporation, or deny the issuance of a license to a corporation, if
24an officer, director, or person owning or controlling 10 percent or
25more of the corporation’s stock has done any of the following:
26(a) Procured, or attempted to procure, a real estate license or
27license renewal, for himself or herself or a salesperson, by fraud,
28misrepresentation, or deceit, or by making a material misstatement
29of fact in an application for a real estate license, license renewal,
30or
reinstatement.
31(b) Entered a plea of guilty or nolo contendere to, or been found
32guilty of, or been convicted of, a felony, or a crime substantially
33related to the qualifications, functions, or duties of a real estate
34licensee, and the time for appeal has elapsed or the judgment of
35conviction has been affirmed on appeal, irrespective of an order
36granting probation following that conviction, suspending the
37imposition of sentence, or of a subsequent order under Section
381203.4 of the Penal Code allowing that licensee to withdraw his
39or her plea of guilty and to enter a plea of not guilty, or dismissing
40the accusation or information.
P52 1(c) Knowingly authorized, directed, connived at, or aided in the
2publication, advertisement, distribution, or circulation of a material
3false statement or representation concerning his or her designation
4or certification of special education, credential,
trade organization
5membership, or business, or concerning a business opportunity or
6a land or subdivision, as defined in Chapter 1 (commencing with
7Section 11000) of Part 2, offered for sale.
8(d) Willfully disregarded or violated the Real Estate Law (Part
91 (commencing with Section 10000)) or Chapter 1 (commencing
10with Section 11000) of Part 2 or the rules and regulations of the
11commissioner for the administration and enforcement of the Real
12Estate Law and Chapter 1 (commencing with Section 11000) of
13Part 2.
14(e) Willfully used the term “realtor” or a trade name or insignia
15of membership in a real estate organization of which the licensee
16is not a member.
17(f) Acted or conducted himself or herself in a manner that would
18have warranted the denial of his or her application for a real estate
19license, or either had a
license denied or had a license issued by
20another agency of this state, another state, or the federal
21government revoked or suspended for acts that, if done by a real
22estate licensee, would be grounds for the suspension or revocation
23of a California real estate license, if the action of denial, revocation,
24or suspension by the other agency or entity was taken only after
25giving the licensee or applicant fair notice of the charges, an
26opportunity for a hearing, and other due process protections
27comparable to the Administrative Procedure Act (Chapter 3.5
28(commencing with Section 11340), Chapter 4 (commencing with
29Section 11370), and Chapter 5 (commencing with Section 11500)
30of Part 1 of Division 3 of Title 2 of the Government Code), and
31only upon an express finding of a violation of law by the agency
32or entity.
33(g) Demonstrated negligence or incompetence in performing
34an act for which he or she is required to hold a license.
35(h) As a broker licensee, failed to exercise reasonable
36supervision over the activities of his or her salespersons, or, as the
37officer designated by a corporate broker licensee, failed to exercise
38reasonable supervision and control of the activities of the
39corporation for which a real estate license is required.
P53 1(i) Used his or her employment by a governmental agency in a
2capacity giving access to records, other than public records, in a
3manner that violates the confidential nature of the records.
4(j) Engaged in any other conduct, whether of the same or a
5different character than specified in this section, that constitutes
6fraud or dishonest dealing.
7(k) Violated any of the terms, conditions, restrictions, and
8limitations contained in an order granting a
restricted license.
9(l) (1) Solicited or induced the sale, lease, or listing for sale or
10lease of residential property on the ground, wholly or in part, of
11loss of value, increase in crime, or decline of the quality of the
12schools due to the present or prospective entry into the
13neighborhood of a person or persons having a characteristic listed
14in subdivision (a) or (d) of Section 12955 of the Government Code,
15as those characteristics are defined in Sections 12926 and 12926.1,
16subdivision (m) and paragraph (1) of subdivision (p) of Section
1712955, and Section 12955.2 of the Government Code.
18(2) Notwithstanding paragraph (1), with respect to familial
19status, paragraph (1) shall not be construed to apply to housing for
20older persons, as defined in Section 12955.9 of the Government
21Code. With respect to familial status, nothing in paragraph (1)
22shall be construed
to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11,
23and 799.5 of the Civil Code, relating to housing for senior citizens.
24Subdivision (d) of Section 51 and Section 4760 of the Civil Code
25and subdivisions (n), (o), and (p) of Section 12955 of the
26Government Code shall apply to paragraph (1).
27(m) Violated the Franchise Investment Law (Division 5
28(commencing with Section 31000) of Title 4 of the Corporations
29Code) or regulations of the Commissioner of Corporations
30pertaining thereto.
31(n) Violated the Corporate Securities Law of 1968 (Division 1
32(commencing with Section 25000) of Title 4 of the Corporations
33Code) or the regulations of the Commissioner of Corporations
34pertaining thereto.
35(o) Failed to disclose to the buyer of real property, in a
36transaction in which the licensee is an agent for the buyer, the
37nature and
extent of a licensee’s direct or indirect ownership
38interest in that real property. The direct or indirect ownership
39interest in the property by a person related to the licensee by blood
40or marriage, by an entity in which the licensee has an ownership
P54 1interest, or by any other person with whom the licensee has a
2special relationship shall be disclosed to the buyer.
3(p) Violated Article 6 (commencing with Section 10237).
4(q) Violated or failed to comply with Chapter 2 (commencing
5with Section 2920) of Title 14 of Part 4 of Division 3 of the Civil
6Code, related to mortgages.
7If a real estate broker that is a corporation has not done any of
8the foregoing acts, either directly or through its employees, agents,
9officers, directors, or persons owning or controlling 10 percent or
10more of the corporation’s stock, the commissioner may not deny
11the
issuance or delay the renewal of a real estate license to, or
12suspend or revoke the real estate license of, the corporation,
13provided that any offending officer, director, or stockholder, who
14has done any of the foregoing acts individually and not on behalf
15of the corporation, has been completely disassociated from any
16affiliation or ownership in the corporation. A decision by the
17commissioner to delay the renewal of a real estate license shall
18toll the expiration of that license until the results of any pending
19disciplinary actions against that licensee are final, or until the
20licensee voluntarily surrenders his, her, or its license, whichever
21is earlier.
22This section shall repeal on July 1, 2018.
Section 10177 is added to the Business and
24Professions Code, to read:
The commissioner may suspend or revoke the license
26of a real estate licensee, delay the renewal of a license of a real
27estate licensee, or deny the issuance of a license to an applicant,
28who has done any of the following, or may suspend or revoke the
29license of a corporation, delay the renewal of a license of a
30corporation, or deny the issuance of a license to a corporation, if
31an officer, director, or person owning or controlling 10 percent or
32more of the corporation’s stock has done any of the following:
33(a) Procured, or attempted to procure, a real estate license or
34license renewal, for himself or herself or a salesperson, by fraud,
35misrepresentation, or deceit or by making a material misstatement
36of fact in an application for a real estate license, license
renewal,
37or reinstatement.
38(b) Entered a plea of guilty or no contest to, or been found guilty
39of, or been convicted of, a felony, or a crime substantially related
40to the qualifications, functions, or duties of a real estate licensee,
P55 1and the time for appeal has elapsed or the judgment of conviction
2has been affirmed on appeal, irrespective of an order granting
3probation following that conviction, suspending the imposition of
4sentence, or of a subsequent order under Section 1203.4 of the
5Penal Code allowing that licensee to withdraw his or her plea of
6guilty and to enter a plea of not guilty, or dismissing the accusation
7or information.
8(c) Knowingly authorized, directed, connived at, or aided in the
9publication, advertisement, distribution, or circulation of a material
10false statement or representation concerning his or her designation
11or certification of special education,
credential, trade organization
12membership, or business or concerning a business opportunity or
13a land or subdivision, as defined in Chapter 1 (commencing with
14Section 11000) of Part 2, offered for sale.
15(d) Willfully disregarded or violated the Real Estate Law (Part
161 (commencing with Section 10000)) or Chapter 1 (commencing
17with Section 11000) of Part 2 or the rules and regulations of the
18commissioner for the administration and enforcement of the Real
19Estate Law and Chapter 1 (commencing with Section 11000) of
20Part 2.
21(e) Willfully used the term “realtor” or a trade name or insignia
22of membership in a real estate organization of which the licensee
23is not a member.
24(f) Acted or conducted himself or herself in a manner that would
25have warranted the denial of his or her application for a real estate
26license or either
had a license denied or had a license issued by
27another agency of this state, another state, or the federal
28government revoked, surrendered, or suspended for acts that, if
29done by a real estate licensee, would be grounds for the suspension
30or revocation of a California real estate license, if the action of
31denial, revocation, surrender, or suspension by the other agency
32or entity was taken only after giving the licensee or applicant fair
33notice of the charges, an opportunity for a hearing, and other due
34process protections comparable to the Administrative Procedure
35Act (Chapter 3.5 (commencing with Section 11340), Chapter 4
36(commencing with Section 11370), and Chapter 5 (commencing
37with Section 11500) of Part 1 of Division 3 of Title 2 of the
38Government Code) and only upon an express finding of a violation
39of law by the agency or entity.
P56 1(g) Demonstrated negligence or incompetence in performing
2an act for which he or she is required to hold a
license.
3(h) As a broker licensee, failed to exercise reasonable
4supervision over the activities of his or her salespersons, or, as the
5officer designated by a corporate broker licensee, failed to exercise
6reasonable supervision and control of the activities of the
7corporation for which a real estate license is required.
8(i) Used his or her employment by a governmental agency in a
9capacity giving access to records, other than public records, in a
10manner that violates the confidential nature of the records.
11(j) Engaged in any other conduct, whether of the same or of a
12different character than specified in this section, that constitutes
13fraud or dishonest dealing.
14(k) Violated any of the terms, conditions, restrictions, and
15limitations contained in an
order granting a restricted license.
16(l) (1) Solicited or induced the sale, lease, or listing for sale or
17lease of residential property on the grounds, wholly or in part, of
18loss of value, increase in crime, or decline of the quality of the
19schools due to the present or prospective entry into the
20neighborhood of a person or persons having a characteristic listed
21in subdivision (a) or (d) of Section 12955 of the Government Code,
22as those characteristics are defined in Sections 12926 and 12926.1
23of, subdivision (m) and paragraph (1) of subdivision (p) of Section
2412955 of, and Section 12955.2 of, the Government Code.
25(2) Notwithstanding paragraph (1), with respect to familial
26status, paragraph (1) shall not be construed to apply to housing for
27older persons, as defined in Section 12955.9 of the Government
28Code. With respect to familial status, nothing in
paragraph (1)
29shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11,
30and 799.5 of the Civil Code, relating to housing for senior citizens.
31Subdivision (d) of Section 51 and Section 4760 of the Civil Code
32and subdivisions (n), (o), and (p) of Section 12955 of the
33Government Code shall apply to paragraph (1).
34(m) Violated the Franchise Investment Law (Division 5
35(commencing with Section 31000) of Title 4 of the Corporations
36Code) or regulations of the Commissioner of Corporations
37pertaining thereto.
38(n) Violated the Corporate Securities Law of 1968 (Division 1
39(commencing with Section 25000) of Title 4 of the Corporations
P57 1Code) or the regulations of the Commissioner of Corporations
2pertaining thereto.
3(o) Failed to disclose to the buyer of real property, in a
4transaction in which the licensee is an agent
for the buyer, the
5nature and extent of a licensee’s direct or indirect ownership
6interest in that real property. The direct or indirect ownership
7interest in the property by a person related to the licensee by blood
8or marriage, by an entity in which the licensee has an ownership
9interest, or by any other person with whom the licensee has a
10special relationship shall be disclosed to the buyer.
11(p) Violated Article 6 (commencing with Section 10237).
12(q) Violated or failed to comply with Chapter 2 (commencing
13with Section 2920) of Title 14 of Part 4 of Division 3 of the Civil
14Code, relating to mortgages.
15(r) Failure to surrender a license that was issued in error or by
16mistake.
17If a real estate broker that is a corporation has not done any of
18the foregoing acts, either
directly or through its employees, agents,
19officers, directors, or persons owning or controlling 10 percent or
20more of the corporation’s stock, the commissioner may not deny
21the issuance or delay the renewal of a real estate license to, or
22suspend or revoke the real estate license of, the corporation,
23provided that any offending officer, director, or stockholder, who
24has done any of the foregoing acts individually and not on behalf
25of the corporation, has been completely disassociated from any
26affiliation or ownership in the corporation. A decision by the
27commissioner to delay the renewal of a real estate license shall
28toll the expiration of that license until the results of any pending
29disciplinary actions against that licensee are final or until the
30licensee voluntarily surrenders his, her, or its license, whichever
31is earlier.
32This section shall become operative on July 1, 2018.
Section 10178 of the Business and Professions Code
35 is amended to read:
begin delete(a)end deletebegin delete end deleteWhen any real estatebegin delete salesmanend deletebegin insert salespersonend insert is
37discharged by hisbegin insert or herend insert employer for a violation of any of the
38provisions of this article prescribing a ground for disciplinary
39action, a certified written statement of the facts with reference
40thereto shall be filed forthwith with the commissioner by the
P58 1employer and if the employer fails
to notify the commissioner as
2required by this section, the commissioner may temporarily
3suspend or permanently revoke the real estate license of the
4employer, in accordance with the provisions of this part relating
5to hearings.
6(b) This section shall repeal on July 1, 2018.
end deleteSection 10178 is added to the Business and
8Professions Code, to read:
(a) When any real estate salesperson is discharged by
10his employer for a violation of any of the provisions of this article
11prescribing a ground for disciplinary action, a certified written
12statement of the facts with reference thereto shall be filed forthwith
13with the commissioner by the employer, and if the employer fails
14to notify the commissioner as required by this section, the
15commissioner may temporarily suspend or permanently revoke
16the real estate license of the employer, in accordance with the
17provisions of this part relating to hearings.
18(b) This section shall become operative on July 1, 2018.
Section 10179 of the Business and Professions Code
21 is amended to read:
begin delete(a)end deletebegin delete end deleteNo violation of any of the provisions of this part
23relating to real estate or of Chapter 1 of Part 2 by any real estate
24begin delete salesmanend deletebegin insert salespersonend insert or employee of any licensed real estate broker
25shall cause the revocation or suspension of the license of the
26employer of thebegin delete salesmanend deletebegin insert
salespersonend insert or employee unless it
27appears upon a hearing by the commissioner that the employer
28had guilty knowledge of such violation.
29(b) This section shall repeal on July 1, 2018.
end deleteSection 10179 is added to the Business and
31Professions Code, to read:
(a) No violation of any of the provisions of this part
33relating to real estate or of Chapter 1 of Part 2 of this division by
34any real estate salesperson or employee of any licensed real estate
35broker shall cause the revocation or suspension of the license of
36the employer of the salesperson or employee unless it appears upon
37a hearing by the commissioner that the employer had guilty
38knowledge of the violation.
39(b) This section shall become operative on July 1, 2018.
Section 10186.2 of the Business and Professions Code
3 is amended to read:
(a) (1) A licensee shall report any of the following
5to thebegin delete department:end deletebegin insert bureau:end insert
6(A) The bringing of an indictment or information charging a
7felony against the licensee.
8(B) The conviction of the licensee, including any verdict of
9guilty, or plea of guilty or no contest, of any felony or
10misdemeanor.
11(C) Any disciplinary action taken by another licensing entity
12or authority of this state or of another state or an agency of the
13
federal government.
14(2) The report required by this subdivision shall be made in
15writing within 30 days of the date of the bringing of the indictment
16or the charging of a felony, the conviction, or the disciplinary
17action.
18(b) Failure to make a report required by this section shall
19constitute a cause for discipline.
20(c) This section shall repeal on July 1, 2018.
end deleteSection 10186.2 is added to the Business and
22Professions Code, to read:
(a) (1) A licensee shall report any of the following
24to the bureau:
25(A) The bringing of a criminal complaint, information, or
26indictment charging a felony against the licensee.
27(B) The conviction of the licensee, including any verdict of
28guilty, or plea of guilty or no contest, of any felony or
29misdemeanor.
30(C) Any disciplinary action taken by another licensing entity
31or authority of this state or of another state or an agency of the
32federal government.
33(2) The report required by this subdivision shall be made in
34writing within
30 days of the date of the bringing of the indictment
35or the charging of a felony, the conviction, or the disciplinary
36action.
37(b) Failure to make a report required by this section shall
38constitute a cause for discipline.
39(c) This section shall become operative on July 1, 2018.
Section 10232.3 of the Business and Professions
2Code is amended to read:
(a) Any transaction that involves the sale of or offer
4to sell a note secured directly by an interest in one or more parcels
5of real property or the sale of an undivided interest in a note secured
6directly by one or more parcels of real property shall adhere to all
7of the following:
8(1) Except as provided in paragraph (2), the aggregate principal
9amount of the note or interest sold, together with the unpaid
10principal amount of any encumbrances upon the real property
11senior thereto, shall not exceed the following percentages of the
12current market value of each parcel of the real property, as
13determined in writing by the broker or appraiser pursuant to Section
1410232.6, plus the amount for which the payment of principal and
15interest in excess of the percentage of
current market value is
16insured for the benefit of the holders of the note or interest by an
17insurer admitted to do business in this state by the Insurance
18Commissioner:
|
(A) |
Single-family residence, owner occupied |
80% |
|
(B) |
Single-family residence, not owner occupied |
75% |
|
(C) |
Commercial properties and income-producing properties not | |
|
described in (B) or (E) |
65% |
|
|
(D) |
Single-family residentially zoned lot or parcel that has installed offsite improvements including drainage, curbs, gutters, sidewalks, paved roads, and utilities as mandated by the political subdivision having jurisdiction over the lot or parcel |
65% |
|
(E) |
Land that produces income from crops, timber, or minerals |
60% |
|
(F) |
Land that is not income producing but has been zoned for (and if required, approved for subdivision as) commercial or residential development |
50% |
|
(G) |
Other real property |
35% |
34(2) The percentage amounts specified in paragraph (1) may be
35exceeded when and to the extent that the broker determines that
36the encumbrance of the property in excess of these percentages is
37reasonable and prudent considering all relevant factors pertaining
38to the real property. However, in no event shall the aggregate
39principal amount of the note or interest sold, together with the
40unpaid principal amount of any encumbrances upon the property
P61 1senior thereto, exceed 80 percent of the current fair market value
2of improved real property or 50 percent of the current fair market
3value of unimproved real property, except in the case of a
4single-family zoned lot or parcel as defined in paragraph (1), which
5shall not exceed 65 percent of the current fair market value of that
6lot or parcel, plus the amount insured as specified in paragraph
7(1). A written statement shall be prepared by the broker that sets
8forth the material considerations and facts that
the broker relies
9upon for his or her determination, which shall be retained as a part
10of the broker’s record of the transaction. Either a copy of the
11statement or the information contained therein shall be included
12in the disclosures required pursuant to Section 10232.5.
13(3) A copy of the appraisal or the broker’s evaluation, for each
14parcel of real property securing the note or interest, shall be
15delivered to the purchaser. The broker shall advise the purchaser
16of his or her right to receive a copy. For purposes of this paragraph,
17“appraisal” means a written estimate of value based upon the
18assembling, analyzing, and reconciling of facts and value indicators
19for the real property in question. A broker shall not purport to make
20an appraisal unless the person so employed is qualified on the basis
21of special training, preparation, or experience.
22(4) For construction or
rehabilitation loans, where the amount
23withheld for construction or rehabilitation at the start of the project
24exceeds one hundred thousand dollars ($100,000), the term “current
25market value” may be deemed to be the value of the completed
26project if all of the following safeguards are met:
27(A) An independent neutral third-party escrow holder is used
28for all deposits and disbursements relating to the construction or
29rehabilitation of the secured property.
30(B) The loan is fully funded, with the entire loan amount to be
31deposited in escrow prior to recording of the deed or deeds of trust.
32(C) A comprehensive, detailed draw schedule is used to ensure
33proper and timely disbursements to allow for completion of the
34project.
35(D) The disbursement draws from the
escrow account are based
36on verification from an independent qualified person who certifies
37that the work completed to date meets the related codes and
38standards and that the draws were made in accordance with the
39construction contract and draw schedule. For purposes of this
40subparagraph, “independent qualified person” means a person who
P62 1is not an employee, agent, or affiliate of the broker and who is a
2licensed architect, general contractor, structural engineer, or active
3local government building inspector acting in his or her official
4capacity.
5(E) An appraisal is completed by a qualified and licensed
6appraiser in accordance with the Uniform Standards of Professional
7Appraisal Practice (USPAP).
8(F) The documentation includes a detailed description of the
9actions that may be taken in the event of a failure to complete the
10project, whether that failure is due to default,
insufficiency of
11funds, or other causes.
12(G) The entire amount of the loan does not exceed two million
13five hundred thousand dollars ($2,500,000).
14(5) For construction or rehabilitation loans, where the amount
15withheld for construction or rehabilitation at the start of the project
16is one hundred thousand dollars ($100,000) or less, the term
17“current market value” may be deemed to be the value of the
18completed project if all of the following safeguards are met:
19(A) The loan is fully funded, with the entire loan amount to be
20deposited in escrow prior to recording of the deed or deeds of trust.
21(B) A comprehensive, detailed draw schedule is used to ensure
22proper and timely disbursements to allow for completion of the
23project.
24(C) An appraisal is completed by a qualified and licensed
25appraiser in accordance with the Uniform Standards of Professional
26Appraisal Practice (USPAP).
27(D) The documentation includes a detailed description of the
28actions that may be taken in the event of a failure to complete the
29project, whether that failure is due to default, insufficiency of
30funds, or other causes.
31(E) The entire amount of the loan does not exceed two million
32five hundred thousand dollars ($2,500,000).
33(6) If a note or an interest will be secured by more than one
34parcel of real property, for the purpose of determining the
35maximum amount of the note or interest, each security property
36shall be assigned a portion of the note or interest that shall not
37exceed the percentage of current
market value determined by, and
38in accordance with, the provisions of paragraphs (1) and (2).
39(b) The note or interest shall not be sold, unless the purchaser
40meets one or both of the qualifications of income or net worth set
P63 1forth below and signs a statement, which shall be retained by the
2broker for four years, conforming to the following:
|
“Transaction Identifier: |
|||
|
Name of Purchaser: |
Date: |
||
|
Check either one of the following, if true: |
|||
|
( ) My investment in the transaction does not exceed 10% of my net worth, |
|||
|
exclusive of home, furnishings, and automobiles. |
|||
|
( ) My investment in the transaction does not exceed 10% of my adjusted |
|||
|
gross income for federal income tax purposes for my last tax year or, |
|||
|
in the alternative, as estimated for the current year. |
|||
|
|
|||
|
Signature” |
|||
15(c) This section shall repeal on July 1, 2018.
Section 10232.3 is added to the Business and
17Professions Code, to read:
(a) Any transaction that involves the sale of or offer
19to sell a note secured directly by an interest in one or more parcels
20of real property or the sale of an undivided interest in a note secured
21directly by one or more parcels of real property shall adhere to all
22of the following:
23(1) Except as provided in paragraph (2), the aggregate principal
24amount of the note or interest sold, together with the unpaid
25principal amount of any encumbrances upon the real property
26senior thereto, shall not exceed the following percentages of the
27current market value of each parcel of the real property, as
28determined in writing by the broker or appraiser pursuant to Section
2910232.6, plus the amount for which the payment of principal and
30interest in excess
of the percentage of current market value is
31insured for the benefit of the holders of the note or interest by an
32insurer admitted to do business in this state by the Insurance
33Commissioner:
|
(A) |
Single-family residence, owner occupied |
80% |
|
(B) |
Single-family residence, not owner occupied |
75% |
|
(C) |
Commercial properties and income-producing properties not | |
|
described in (B) or (E) |
65% |
|
|
(D) |
Single-family residentially zoned lot or parcel that has installed offsite improvements, including drainage, curbs, gutters, sidewalks, paved roads, and utilities as mandated by the political subdivision having jurisdiction over the lot or parcel |
65% |
|
(E) |
Land that produces income from crops, timber, or minerals |
60% |
|
(F) |
Land that is not income producing but has been zoned for (and, if required, approved for subdivision as) commercial or residential development |
50% |
|
(G) |
Other real property |
35% |
9(2) The percentage amounts specified in paragraph (1) may be
10exceeded when and to the extent that the broker determines that
11the encumbrance of the property in excess of these percentages is
12reasonable and prudent considering all relevant factors pertaining
13to the real property. However, in no event shall the aggregate
14principal amount of the note or interest sold, together with the
15unpaid principal amount of any encumbrances upon the property
16senior thereto, exceed 80 percent of the current fair market value
17of improved real property or 50 percent of the current fair market
18value of unimproved real property, except in the case of a
19single-family zoned lot or parcel as defined in paragraph (1), which
20shall not exceed 65 percent of the current fair market value of that
21lot or parcel, plus the amount insured as specified in paragraph
22(1). A written statement shall be prepared by the broker that sets
23forth the material considerations and facts that
the broker relies
24upon for his or her determination, which shall be retained as part
25of the broker’s record of the transaction. Either a copy of the
26statement or the information contained therein shall be included
27in the disclosures required pursuant to Section 10232.5.
28(3) A copy of the appraisal or the broker’s evaluation, for each
29parcel of real property securing the note or interest, shall be
30delivered to the purchaser. The broker shall advise the purchaser
31of his or her right to receive a copy. For purposes of this paragraph,
32“appraisal” means a written estimate of value based upon the
33assembling, analyzing, and reconciling of facts and value indicators
34for the real property in question. A broker shall not purport to make
35an appraisal unless he or she is qualified on the basis of special
36training, preparation, or experience.
37(4) For construction or rehabilitation loans, where
the amount
38withheld for construction or rehabilitation at the start of the project
39exceeds one hundred thousand dollars ($100,000), the term “current
P65 1market value” may be deemed to be the value of the completed
2project if all of the following safeguards are met:
3(A) An independent neutral third-party escrow holder is used
4for all deposits and disbursements relating to the construction or
5rehabilitation of the secured property.
6(B) The loan is fully funded, with the entire loan amount to be
7deposited in escrow prior to the recording of the deed or deeds of
8trust.
9(C) A comprehensive, detailed draw schedule is used to ensure
10proper and timely disbursements to allow for completion of the
11project.
12(D) The disbursement draws from the escrow account are based
13
on verification from an independent qualified person who certifies
14that the work completed to date meets the related codes and
15standards and that the draws were made in accordance with the
16construction contract and draw schedule. For purposes of this
17subparagraph, “independent qualified person” means a person who
18is not an employee, agent, or affiliate of the broker and who is a
19licensed architect, general contractor, structural engineer, or active
20local government building inspector acting in his or her official
21capacity.
22(E) An appraisal is completed by a qualified and licensed
23appraiser in accordance with the Uniform Standards of Professional
24Appraisal Practice (USPAP).
25(F) The documentation includes a detailed description of the
26actions that may be taken in the event of a failure to complete the
27project, whether that failure is due to default, insufficiency of
28funds, or other
causes.
29(G) The entire amount of the loan does not exceed two million
30five hundred thousand dollars ($2,500,000).
31(5) For construction or rehabilitation loans, where the amount
32withheld for construction or rehabilitation at the start of the project
33is one hundred thousand dollars ($100,000) or less, the term
34“current market value” may be deemed to be the value of the
35completed project if all of the following safeguards are met:
36(A) The loan is fully funded, with the entire loan amount to be
37deposited in escrow prior to the recording of the deed or deeds of
38trust.
P66 1(B) A comprehensive, detailed draw schedule is used to ensure
2proper and timely disbursements to allow for completion of the
3project.
4(C) An appraisal is completed by a qualified and licensed
5appraiser in accordance with the Uniform Standards of Professional
6Appraisal Practice (USPAP).
7(D) The documentation includes a detailed description of the
8actions that may be taken in the event of a failure to complete the
9project, whether that failure is due to default, insufficiency of
10funds, or other causes.
11(E) The entire amount of the loan does not exceed two million
12five hundred thousand dollars ($2,500,000).
13(6) If a note or an interest will be secured by more than one
14parcel of real property, for the purpose of determining the
15maximum amount of the note or interest, each security property
16shall be assigned a portion of the note or interest that shall not
17exceed the percentage of current market value determined by, and
18in accordance with,
the provisions of paragraphs (1) and (2).
19(b) The note or interest shall not be sold, unless the purchaser
20meets one or both of the qualifications of income or net worth set
21forth below and signs a statement, which shall be retained by the
22broker for four years, conforming to the following:
|
“Transaction Identifier: |
|||
|
Name of Purchaser: |
Date: |
||
|
Check either one of the following, if true: |
|||
|
( ) My investment in the transaction does not exceed 10% of my net worth, |
|||
|
exclusive of home, furnishings, and automobiles. |
|||
|
( ) My investment in the transaction does not exceed 10% of my adjusted |
|||
|
gross income for federal income tax purposes for my last tax year or, |
|||
|
in the alternative, as estimated for the current year. |
|||
|
|
|||
|
Signature” |
|||
35(c) This section shall become operative on July 1, 2018.
Section 10238 of the Business and Professions Code
37 is amended to read:
(a) A notice in the following form and containing the
39following information shall be filed with the commissioner within
P67 130 days after the first transaction and within 30 days of any material
2change in the information required in the notice:
|
TO: |
Real Estate Commissioner |
|||
|
This notice is filed pursuant to Sections 10237 and 10238 of the Business and Professions Code. |
||||
|
( ) Original Notice ( ) Amended Notice |
||||
|
1. |
Name of Broker conducting transaction under Section 10237: |
|||
|
|
||||
|
2. |
Broker license identification number: |
|||
|
3. |
List the month the fiscal year ends: |
|||
|
4. |
Broker’s telephone number: |
|||
|
5. |
Firm name (if different from “1”): |
|||
|
|
||||
|
6. |
Street address (main location): |
|||
|
|
||||
|
7. |
Mailing address (if different from “6”): |
|||
|
|
||||
|
8. |
Servicing agent: Identify by name, address, and telephone number the person or entity who will act as the servicing agent in transactions pursuant to Section 10237 (including the undersigned Broker if that is the case): |
|||
|
|
||||
|
|
||||
|
9. |
Total number of multilender notes arranged: |
|||
|
|
||||
|
10. |
Total number of interests sold to investors on the multilender’s notes: ______ |
|||
|
11. |
Inspection of trust account (before answering this question, review the provisions of paragraph (3) of subdivision (k) of Section 10238). |
|||
|
CHECK ONLY ONE OF THE FOLLOWING: |
||||
|
( ) |
The undersigned Broker is (or expects to be) required to file reports of inspection of its trust account(s) with the Real Estate Commissioner pursuant to paragraph (3) of subdivision (k) of Section 10238. |
|||
|
Amount of Multilender Payments Collected Last Fiscal Quarter: |
||||
|
Total Number of Investors Due Payments Last Fiscal Quarter: |
||||
|
( ) |
The undersigned Broker is NOT (or does NOT expect to be) required to file reports of inspection of its trust account(s) with the Real Estate Commissioner pursuant to paragraph (3) of subdivision (k) of Section 10238. |
|||
|
12. |
Signature. The contents of this notice are true and correct. |
|||
|
|
|
|||
|
Date |
Type Name of Broker |
|||
|
|
||||
|
Signature of Broker or of Designated Officer of |
||||
|
|
||||
|
Type Name of Person(s) Signing This Notice |
||||
25NOTE: AN AMENDED NOTICE MUST BE FILED BY THE
26BROKER WITHIN 30 DAYS OF
ANY MATERIAL CHANGE
27IN THE INFORMATION REQUIRED TO BE SET FORTH
28HEREIN.
29
30(b) A broker or person who becomes the servicing agent for
31notes or interests sold pursuant to this article, upon which payments
32due during any period of three consecutive months in the aggregate
33exceed one hundred twenty-five thousand dollars ($125,000) or
34the number of persons entitled to the payments exceeds 120, shall
35file the notice required by subdivision (a) with the commissioner
36within 30 days after becoming the servicing agent.
37(c) All advertising employed for transactions under this article
38shall show the name of the broker and comply with Section 10235
39of this code and Sections 260.302 and 2848 of Title 10 of the
P69 1California Code of Regulations. Brokers and their agents are
2cautioned that a reference to a prospective investor that a
3transaction is conducted
under this article may be deemed
4misleading or deceptive if this representation may reasonably be
5construed by the investor as an implication of merit or approval
6of the transaction.
7(d) Each parcel of real property directly securing the notes or
8interests shall be located in this state, the note or notes shall not
9by their terms be subject to subordination to any subsequently
10created deed of trust upon the real property, and the note or notes
11shall not be promotional notes secured by liens on separate parcels
12of real property in one subdivision or in contiguous subdivisions.
13For purposes of this subdivision, a promotional note means a
14promissory note secured by a trust deed, executed on unimproved
15real property or executed after construction of an improvement of
16the property but before the first purchase of the property as so
17improved, or executed as a means of financing the first purchase
18of the property as so improved, that is subordinate,
or by its terms
19may become subordinate, to any other trust deed on the property.
20However, the term “promotional note” does not include either of
21the following:
22(1) A note that was executed in excess of three years prior to
23being offered for sale.
24(2) A note secured by a first trust deed on real property in a
25subdivision that evidences a bona fide loan made in connection
26with the financing of the usual cost of the development in a
27residential, commercial, or industrial building or buildings on the
28property under a written agreement providing for the disbursement
29of the loan funds as costs are incurred or in relation to the progress
30of the work and providing for title insurance insuring the priority
31of the security as against mechanic’s and materialmen’s liens or
32for the final disbursement of at least 10 percent of the loan funds
33after the expiration of the period for the filing of
mechanic’s and
34materialmen’s liens.
35(e) The notes or interests shall be sold by or through a real estate
36broker, as principal or agent. At the time the notes or interests are
37originally sold or assigned, neither the broker nor an affiliate of
38the broker shall have an interest as owner, lessor, or developer of
39the property securing the loan, or any contractual right to acquire,
40lease, or develop the property securing the loan. This provision
P70 1does not prohibit a broker from conducting the following
2transactions if, in either case, the disclosure statement furnished
3by the broker pursuant to subdivision (l) discloses the interest of
4the broker or affiliate in the transaction and the circumstances
5under which the broker or affiliate acquired the interest:
6(1) A transaction in which the broker or an affiliate of the broker
7is acquiring the property pursuant to a foreclosure
under, or sale
8pursuant to, a deed of trust securing a note for which the broker is
9the servicing agent or that the broker sold to the holder or holders.
10(2) A transaction in which the broker or an affiliate of the broker
11is reselling from inventory property acquired by the broker pursuant
12to a foreclosure under, or sale pursuant to, a deed of trust securing
13a note for which the broker is the servicing agent or that the broker
14sold to the holder or holders.
15(f) (1) The notes or interests shall not be sold to more than 10
16persons, each of whom meets one or both of the qualifications of
17income or net worth set forth below and signs a statement, which
18shall be retained by the broker for four years, conforming to the
19following:
|
Transaction Identifier: |
|
|
Name of Purchaser: Date: ______ |
|
|
Check either one of the following, if true: |
|
|
( ) |
My investment in the transaction does not exceed 10% of my net worth, exclusive of home, furnishings, and automobiles. |
|
( ) |
My investment in the transaction does not exceed 10% of my adjusted gross income for federal income tax purposes for my last tax year or, in the alternative, as estimated for the current year. |
|
|
|
33(2) The number of offerees shall not be considered for the
34purposes of this section.
35(3) Spouses and their dependents, and an individual and his or
36her dependents, shall be counted as one person.
37(4) A retirement plan, trust, business trust, corporation, or other
38entity that is
wholly owned by an individual and the individual’s
39spouse or the individual’s dependents, or any combination thereof,
40shall not be counted separately from the individual, but the
P71 1investments of these entities shall be aggregated with those of the
2individual for the purposes of the statement required by paragraph
3(1). If the investments of any entities are required to be aggregated
4under this subdivision, the adjusted gross income or net worth of
5these entities may also be aggregated with the net worth, income,
6or both, of the individual.
7(5) The “institutional investors” enumerated in subdivision (i)
8of Section 25102 or subdivision (c) of Section 25104 of the
9Corporations Code, or in a rule adopted pursuant thereto, shall not
10be counted.
11(6) A partnership, limited liability company, corporation, or
12other organization that was not specifically formed for the purpose
13of purchasing
the security offered in reliance upon this exemption
14from securities qualification is counted as one person.
15(g) The notes or interests of the purchasers shall be identical in
16their underlying terms, including the right to direct or require
17foreclosure, rights to and rate of interest, and other incidents of
18being a lender, and the sale to each purchaser pursuant to this
19section shall be upon the same terms, subject to adjustment for the
20face or principal amount or percentage interest purchased and for
21interest earned or accrued. This subdivision does not preclude
22different selling prices for interests to the extent that these
23differences are reasonably related to changes in the market value
24of the loan occurring between the sales of these interests. The
25interest of each purchaser shall be recorded pursuant to
26subdivisions (a) to (c), inclusive, of Section 10234.
27(h) (1) Except as provided in paragraph (2), the aggregate
28principal amount of the notes or interests sold, together with the
29unpaid principal amount of any encumbrances upon the real
30property senior thereto, shall not exceed the following percentages
31of the current market value of each parcel of the real property, as
32determined in writing by the broker or appraiser pursuant to Section
3310232.6, plus the amount for which the payment of principal and
34interest in excess of the percentage of current market value is
35insured for the benefit of the holders of the notes or interests by
36an insurer admitted to do business in this state by the Insurance
37Commissioner:
|
(A) |
Single-family residence, owner occupied |
80% |
|
(B) |
Single-family residence, not owner occupied |
75% |
|
(C) |
Commercial properties and income-producing properties not described in (B) or (E) |
65% |
|
(D) |
Single-family residentially zoned lot or parcel that has installed offsite improvements including drainage, curbs, gutters, sidewalks, paved roads, and utilities as mandated by the political subdivision having jurisdiction over the lot or parcel |
65% |
|
(E) |
Land that produces income from crops, timber, or minerals |
60% |
|
(F) |
Land that is not income producing but has been zoned for (and if required, approved for subdivision as) commercial or residential development |
50% |
|
(G) |
Other real property |
35% |
13(2) The percentage amounts specified in paragraph (1) may be
14exceeded when and to the extent that the broker determines that
15the encumbrance of the property in excess of these percentages is
16reasonable and prudent considering all relevant factors pertaining
17to the real property. However, in no event shall the aggregate
18principal amount of the notes or interests sold, together with the
19unpaid principal amount of any encumbrances upon the property
20senior thereto, exceed 80 percent of the current fair market value
21of improved real property or 50 percent of the current fair market
22value of unimproved real property, except in the case of a
23single-family zoned lot or parcel as defined in paragraph (1), which
24shall not exceed 65 percent of the current fair market value of that
25lot or parcel, plus the amount insured as specified in paragraph
26(1). A written statement shall be prepared by the broker
that sets
27forth the material considerations and facts that the broker relies
28upon for his or her determination, which shall be retained as a part
29of the broker’s record of the transaction. Either a copy of the
30statement or the information contained therein shall be included
31in the disclosures required pursuant to subdivision (l).
32(3) A copy of the appraisal or the broker’s evaluation, for each
33parcel of real property securing the notes or interests, shall be
34delivered to each purchaser. The broker shall advise purchasers
35of their right to receive a copy. For purposes of this paragraph,
36“appraisal” means a written estimate of value based upon the
37assembling, analyzing, and reconciling of facts and value indicators
38for the real property in question. A broker shall not purport to make
39an appraisal unless the person so employed is qualified on the basis
40of special training, preparation, or experience.
P73 1(4) For construction or rehabilitation loans, the term “current
2market value” may be deemed to be the value of the completed
3project if the following safeguards are met:
4(A) An independent neutral third-party escrow holder is used
5for all deposits and disbursements.
6(B) The loan is fully funded, with the entire loan amount to be
7deposited in escrow prior to recording of the deed or deeds of trust.
8(C) A comprehensive, detailed draw schedule is used to ensure
9proper and timely disbursements to allow for completion of the
10project.
11(D) The disbursement draws from the escrow account are based
12on verification from an independent qualified person who certifies
13that the work completed to date meets the
related codes and
14standards and that the draws were made in accordance with the
15construction contract and draw schedule. For purposes of this
16subparagraph, “independent qualified person” means a person who
17is not an employee, agent, or affiliate of the broker and who is a
18licensed architect, general contractor, structural engineer, or active
19local government building inspector acting in his or her official
20capacity.
21(E) An appraisal is completed by a qualified and licensed
22appraiser in accordance with the Uniform Standards of Professional
23Appraisal Practice (USPAP).
24(F) In addition to the transaction documentation required by
25subdivision (i), the documentation shall include a detailed
26description of actions that may be taken in the event of a failure
27to complete the project, whether that failure is due to default,
28insufficiency of funds, or other causes.
29(G) The entire amount of the loan does not exceed two million
30five hundred thousand dollars ($2,500,000).
31(5) If a note or an interest will be secured by more than one
32parcel of real property, for the purpose of determining the
33maximum amount of the note or interest, each security property
34shall be assigned a portion of the note or interest that shall not
35exceed the percentage of current market value determined by, and
36in accordance with, the provisions of paragraphs (1) and (2).
37(i) The documentation of the transaction shall require that (1)
38a default upon any note or interest is a default upon all notes or
39interests and (2) the holders of more than 50 percent of the recorded
40beneficial interests of the notes or interests may govern the actions
P74 1to be taken on behalf of all holders in accordance with Section
22941.9 of
the Civil Code in the event of default or foreclosure for
3matters that require direction or approval of the holders, including
4designation of the broker, servicing agent, or other person acting
5on their behalf, and the sale, encumbrance, or lease of real property
6owned by the holders resulting from foreclosure or receipt of a
7deed in lieu of foreclosure. The terms called for by this subdivision
8may be included in the deed of trust, in the assignment of interests,
9or in any other documentation as is necessary or appropriate to
10make them binding on the parties.
11(j) (1) The broker shall not accept any purchase or loan funds
12or other consideration from a prospective lender or purchaser, or
13directly or indirectly cause the funds or other consideration to be
14deposited in an escrow or trust account, except as to a specific loan
15or note secured by a deed of trust that the broker owns, is
16authorized to negotiate, or is
unconditionally obligated to buy.
17(2) All funds received by the broker from the purchasers or
18lenders shall be handled in accordance with Section 10145 for
19disbursement to the persons thereto entitled upon recordation of
20the interests of the purchasers or lenders in the note and deed of
21trust. No provision of this article shall be construed as modifying
22or superseding applicable law regulating the escrow holder in any
23transaction or the handling of the escrow account.
24(3) The books and records of the broker or servicing agent, or
25both, shall be maintained in a manner that readily identifies
26transactions under this article and the receipt and disbursement of
27funds in connection with these transactions.
28(4) If required by paragraph (3) of subdivision (k), the review
29by the independent certified public accountant shall
include a
30sample of transactions, as reflected in the records of the trust
31account required pursuant to paragraph (1) of subdivision (k), and
32the bank statements and supporting documents. These documents
33shall be reviewed for compliance with this article with respect to
34the handling and distribution of funds. The sample shall be selected
35at random by the accountant from all these transactions and shall
36consist of the following: (A) three sales made or 5 percent of the
37sales made pursuant to this article during the period for which the
38examination is conducted, whichever is greater, and (B) 10
39payments processed or 2 percent of payments processed under this
P75 1article during the period for which the examination is conducted,
2whichever is greater.
3(5) For the purposes of this subdivision, the transaction that
4constitutes a “sale” is the series of transactions by which a series
5of notes of a maker, or the interests in the note of a maker, are sold
6or
issued to their various purchasers under this article, including
7all receipts and disbursements in that process of funds received
8from the purchasers or lenders. The transaction that constitutes a
9“payment,” for the purposes of this subdivision, is the receipt of
10a payment from the person obligated on the note or from some
11other person on behalf of the person so obligated, including the
12broker or servicing agent, and the distribution of that payment to
13the persons entitled thereto. If a payment involves an advance paid
14by the broker or servicing agent as the result of a dishonored check,
15the inspection shall identify the source of funds from which the
16payment was made or, in the alternative, the steps that are
17reasonably necessary to determine that there was not a
18disbursement of trust funds. The accountant shall inspect for
19compliance with the following specific provisions of this section:
20paragraphs (1), (2), and (3) of subdivision (j) and paragraphs (1)
21and (2) of subdivision (k).
22(6) Within 30 days of the close of the period for which the report
23is made, or within any additional time as the commissioner may
24in writing allow in a particular case, the accountant shall forward
25to the broker or servicing agent, as the case may be, and to the
26commissioner, the report of the accountant, stating that the
27inspection was performed in accordance with this section, listing
28the sales and the payments examined, specifying the nature of the
29deficiencies, if any, noted by the accountant with respect to each
30sale or payment, together with any further information as the
31accountant may wish to include, such as corrective steps taken
32with respect to any deficiency so noted, or stating that no
33deficiencies were observed. If the broker meets the threshold
34criteria of Section 10232, the report of the accountant shall be
35submitted as part of the quarterly reports required under Section
3610232.25.
37(k) The notes or interests shall be sold subject to a written
38agreement that obligates a licensed real estate broker, or a person
39exempted from the licensing requirement for real estate brokers
40under this chapter, to act as agent for the purchasers or lenders to
P76 1service the note or notes and deed of trust, including the receipt
2and transmission of payments and the institution of foreclosure
3proceedings in the event of a default. A copy of this servicing
4agreement shall be delivered to each purchaser. The broker shall
5offer to the lenders or purchasers the services of the broker or one
6or more affiliates of the broker, or both, as servicing agent for each
7transaction conducted pursuant to this article. The agreement shall
8require all of the following:
9(1) (A) That payments received on the note or notes be
10deposited immediately to a trust account maintained in
accordance
11with this section and with the provisions for trust accounts of
12licensed real estate brokers contained in Section 10145 and Article
1315 (commencing with Section 2830.1) of Chapter 6 of Title 10 of
14the California Code of Regulations.
15(B) That payments deposited pursuant to subparagraph (A) shall
16not be commingled with the assets of the servicing agent or used
17for any transaction other than the transaction for which the funds
18are received.
19(2) That payments received on the note or notes shall be
20transmitted to the purchasers or lenders pro rata according to their
21respective interests within 25 days after receipt thereof by the
22agent. If the source for the payment is not the maker of the note,
23the agent shall inform the purchasers or lenders in writing of the
24source for payment. A broker or servicing agent who transmits to
25the purchaser or lenders the broker’s or servicing
agent’s own
26funds to cover payments due from the borrower but unpaid as a
27result of a dishonored check may recover the amount of the
28advances from the trust fund when the past due payment is
29received. However, this article does not authorize the broker,
30servicing agent, or any other person to issue, or to engage in any
31practice constituting, any guarantee or to engage in the practice of
32advancing payments on behalf of the borrower.
33(3) If the broker or person who is or becomes the servicing agent
34for notes or interests sold pursuant to this article upon which the
35payments due during any period of three consecutive months in
36the aggregate exceed one hundred twenty-five thousand dollars
37($125,000) or the number of persons entitled to the payments
38exceeds 120, the trust account or accounts of that broker or affiliate
39shall be inspected by an independent certified public accountant
40at no less than three-month intervals during the time the volume
P77 1is
maintained. Within 30 days after the close of the period for
2which the review is made, the report of the accountant shall be
3forwarded as provided in paragraph (6) of subdivision (j). If the
4broker is required to file an annual report pursuant to subdivision
5(o) or pursuant to Section 10232.2, the quarterly report pursuant
6to this subdivision need not be filed for the last quarter of the year
7for which the annual report is made. For the purposes of this
8subdivision, an affiliate of a broker is any person controlled by,
9controlling, or under common control with the broker.
10(4) Unless the servicing agent will receive notice pursuant to
11Section 2924b of the Civil Code, the servicing agent shall file a
12written request for notice of default upon any prior encumbrances
13and promptly notify the purchasers or lenders of any default on
14the prior encumbrances or on the note or notes subject to the
15servicing agreement.
16(5) The servicing agent shall promptly forward copies of the
17following to each purchaser or lender:
18(A) Any notice of trustee sale filed on behalf of the purchasers
19or lenders.
20(B) Any request for reconveyance of the deed of trust received
21on behalf of the purchasers or lenders.
22(l) The broker shall disclose in writing to each purchaser or
23lender the material facts concerning the transaction on a disclosure
24form adopted or approved by the commissioner pursuant to Section
2510232.5, subject to the following:
26(1) The disclosure form shall include a description of the terms
27upon which the note and deed of trust are being sold, including
28the terms of the undivided interests being offered therein,
including
29the following:
30(A) In the case of the sale of an existing note:
31(i) The aggregate sale price of the note.
32(ii) The percent of the premium over or discount from the
33principal balance plus accrued but unpaid interest.
34(iii) The effective rate of return to the purchasers if the note is
35paid according to its terms.
36(iv) The name and address of the escrow holder for the
37transaction.
38(v) A description of, and the estimated amount of, each cost
39payable by the seller in connection with the sale and a description
P78 1of, and the estimated amount of, each cost payable by the
2purchasers in connection with the sale.
3(B) In the case of the origination of a note:
4(i) The name and address of the escrow holder for the
5transaction.
6(ii) The anticipated closing date.
7(iii) A description of, and the estimated amount of, each cost
8payable by the borrower in connection with the loan and a
9description of, and the estimated amount of, each cost payable by
10the lenders in connection with the loan.
11(C) In the case of a transaction involving a note or interest
12secured by more than one parcel of real property, in addition to
13the requirements of subparagraphs (A) and (B):
14(i) The address, description, and estimated fair market value of
15each property
securing the loan.
16(ii) The amount of the available equity in each property securing
17the loan after the loan amount to be apportioned to each property
18is assigned.
19(iii) The loan to value percentage for each property after the
20loan amount to be apportioned to each property is assigned pursuant
21to subdivision (h).
22(2) A copy of the written statement or information contained
23therein, as required by paragraph (2) of subdivision (h), shall be
24included in the disclosure form.
25(3) Any interest of the broker or affiliate in the transaction, as
26described in subdivision (e), shall be included with the disclosure
27form.
28(4) When the particular circumstances of a transaction make
29information not
specified in the disclosure form material or
30essential to keep the information provided in the form from being
31misleading, and the other information is known to the broker, the
32other information shall also be provided by the broker.
33(5) If more than one parcel of real property secures the notes or
34interests, the disclosure form shall also fully disclose any risks to
35investors associated with securing the notes or interests with
36multiple parcels of real property.
37(m) The broker or servicing agent shall furnish any purchaser
38of a note or interest, upon request, with the names and addresses
39of the purchasers of the other notes or interests in the loan.
P79 1(n) No agreement in connection with a transaction covered by
2this article shall grant to the real estate broker, the servicing agent,
3or any affiliate of the broker or
agent the option or election to
4acquire the interests of the purchasers or lenders or to acquire the
5real property securing the interests. This subdivision shall not
6prohibit the broker or affiliate from acquiring the interests, with
7the consent of the purchasers or lenders whose interests are being
8purchased, or the property, with the written consent of the
9purchasers or lenders, if the consent is given at the time of the
10acquisition.
11(o) Each broker who conducts transactions under this article,
12or broker or person who becomes the servicing agent for notes or
13interests sold pursuant to this article, who meets the criteria of
14paragraph (3) of subdivision (k) shall file with the commissioner
15an annual report of a review of its trust account. The report shall
16be prepared and filed in accordance with subdivision (a) of Section
1710232.2 and the rules and procedures thereunder of the
18commissioner. That report shall cover the broker’s transactions
19
under this article and, if the broker also meets the threshold criteria
20set forth in Section 10232, the broker’s transactions subject to that
21section shall be included as well.
22(p) Each broker conducting transactions pursuant to this article,
23or broker or person who becomes the servicing agent for notes or
24interests sold pursuant to this article, who meets the criteria of
25paragraph (3) of subdivision (k) shall file with the commissioner
26a report of the transactions that is prepared in accordance with
27subdivision (c) of Section 10232.2. If the broker also meets the
28threshold criteria of Section 10232, the report shall also include
29the transactions subject to that section. This report shall be
30confidential pursuant to subdivision (f) of Section 10232.2.
31(q) This section shall repeal on July 1, 2018.
Section 10238 is added to the Business and
33Professions Code, to read:
(a) A notice in the following form and containing the
35following information shall be filed with the commissioner within
3630 days after the first transaction and within 30 days of any material
37change in the information required in the notice:
|
TO: |
Real Estate Commissioner |
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|
This notice is filed pursuant to Sections 10237 and 10238 of the Business and Professions Code. |
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( ) Original Notice ( ) Amended Notice |
||||
|
1. |
Name of Responsible Broker conducting transaction under Section 10237: |
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2. |
Broker license identification number: |
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3. |
List the month the fiscal year ends: |
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|
4. |
Broker’s telephone number: |
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5. |
Firm name (if different from “1”): |
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|
6. |
Street address (main location): |
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7. |
Mailing address (if different from “6”): |
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|
8. |
Servicing agent: Identify by name, address, and telephone number the person or entity who will act as the servicing agent in transactions pursuant to Section 10237 (including the undersigned Broker if that is the case): |
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|
9. |
Total number of multilender notes arranged: |
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|
10. |
Total number of interests sold to investors on the multilender’s notes: ______ |
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11. |
Inspection of trust account (before answering this question, review the provisions of paragraph (3) of subdivision (k) of Section 10238). |
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CHECK ONLY ONE OF THE FOLLOWING: |
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|
( ) |
The undersigned Broker is (or expects to be) required to file reports of inspection of its trust account(s) with the Real Estate Commissioner pursuant to paragraph (3) of subdivision (k) of Section 10238. |
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Amount of Multilender Payments Collected Last Fiscal Quarter: |
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|
Total Number of Investors Due Payments Last Fiscal Quarter: |
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|
( ) |
The undersigned Broker is NOT (or does NOT expect to be) required to file reports of inspection of its trust account(s) with the Real Estate Commissioner pursuant to paragraph (3) of subdivision (k) of Section 10238. |
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12. |
Signature. The contents of this notice are true and correct. |
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Date |
Type Name of Broker |
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Signature of Responsible Broker |
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Type Name of Person(s) Signing This Notice |
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21NOTE: AN AMENDED NOTICE MUST BE FILED BY THE
22BROKER WITHIN 30 DAYS OF ANY MATERIAL CHANGE
23IN THE INFORMATION
REQUIRED TO BE SET FORTH
24HEREIN.
25
26(b) A broker or person who becomes the servicing agent for
27notes or interests sold pursuant to this article, upon which payments
28due during any period of three consecutive months in the aggregate
29exceed one hundred twenty-five thousand dollars ($125,000) or
30the number of persons entitled to the payments exceeds 120, shall
31file the notice required by subdivision (a) with the commissioner
32within 30 days after becoming the servicing agent.
33(c) All advertising used for transactions under this article shall
34show the name of the broker and comply with Section 10235 of
35this code and Sections 260.302 and 2848 of Title 10 of the
36California Code of Regulations. Brokers and their agents are
37cautioned that a reference to a prospective investor that a
38transaction is conducted under this article may be deemed
39misleading
or deceptive if this representation may reasonably be
P82 1construed by the investor as an implication of merit or approval
2of the transaction.
3(d) Each parcel of real property directly securing the notes or
4interests shall be located in this state, the note or notes shall not
5by their terms be subject to subordination to any subsequently
6created deed of trust upon the real property, and the note or notes
7shall not be promotional notes secured by liens on separate parcels
8of real property in one subdivision or in contiguous subdivisions.
9For purposes of this subdivision, a promotional note means a
10promissory note secured by a trust deed, executed on unimproved
11real property or executed after construction of an improvement of
12the property but before the first purchase of the property as so
13improved, or executed as a means of financing the first purchase
14of the property as so improved, that is subordinate, or by its terms
15may become subordinate, to
any other trust deed on the property.
16However, the term “promotional note” does not include either of
17the following:
18(1) A note that was executed in excess of three years prior to
19being offered for sale.
20(2) A note secured by a first trust deed on real property in a
21subdivision that evidences a bona fide loan made in connection
22with the financing of the usual cost of the development in a
23residential, commercial, or industrial building or buildings on the
24property under a written agreement providing for the disbursement
25of the loan funds as costs are incurred or in relation to the progress
26of the work and providing for title insurance insuring the priority
27of the security as against mechanic’s and materialmen’s liens or
28for the final disbursement of at least 10 percent of the loan funds
29after the expiration of the period for the filing of mechanic’s and
30materialmen’s liens.
31(e) The notes or interests shall be sold by or through a real estate
32broker, as principal or agent. At the time the notes or interests are
33originally sold or assigned, neither the broker nor an affiliate of
34the broker shall have an interest as owner, lessor, or developer of
35the property securing the loan or any contractual right to acquire,
36lease, or develop the property securing the loan. This provision
37does not prohibit a broker from conducting the following
38transactions if, in either case, the disclosure statement furnished
39by the broker pursuant to subdivision (l) discloses the interest of
P83 1the broker or affiliate in the transaction and the circumstances
2under which the broker or affiliate acquired the interest:
3(1) A transaction in which the broker or an affiliate of the broker
4is acquiring the property pursuant to a foreclosure under, or sale
5pursuant to, a deed of trust
securing a note for which the broker is
6the servicing agent or that the broker sold to the holder or holders.
7(2) A transaction in which the broker or an affiliate of the broker
8is reselling from inventory property acquired by the broker pursuant
9to a foreclosure under, or sale pursuant to, a deed of trust securing
10a note for which the broker is the servicing agent or that the broker
11sold to the holder or holders.
12(f) (1) The notes or interests shall not be sold to more than 10
13persons, each of whom meets one or both of the qualifications of
14income or net worth set forth below and signs a statement, which
15shall be retained by the broker for four years, conforming to the
16following:
|
Transaction Identifier: |
|
|
Name of Purchaser: Date: ______ |
|
|
Check either one of the following, if true: |
|
|
( ) |
My investment in the transaction does not exceed 10% of my net worth, exclusive of home, furnishings, and automobiles. |
|
( ) |
My investment in the transaction does not exceed 10% of my adjusted gross income for federal income tax purposes for my last tax year or, in the alternative, as estimated for the current year. |
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|
30(2) The number of offerees shall not be considered for the
31purposes of this section.
32(3) Spouses and their dependents, and an individual and his or
33her dependents, shall be counted as one person.
34(4) A retirement plan, trust, business trust, corporation, or other
35entity that is wholly owned by an individual and the individual’s
36spouse or the individual’s dependents, or
any combination thereof,
37shall not be counted separately from the individual, but the
38investments of these entities shall be aggregated with those of the
39individual for the purposes of the statement required by paragraph
40(1). If the investments of any entities are required to be aggregated
P84 1under this subdivision, the adjusted gross income or net worth of
2these entities may also be aggregated with the net worth, income,
3or both, of the individual.
4(5) The “institutional investors” enumerated in subdivision (i)
5of Section 25102 or subdivision (c) of Section 25104 of the
6Corporations Code, or in a rule adopted pursuant thereto, shall not
7be counted.
8(6) A partnership, limited liability company, corporation, or
9other organization that was not specifically formed for the purpose
10of purchasing the security offered in reliance upon this exemption
11from securities qualification is counted
as one person.
12(g) The notes or interests of the purchasers shall be identical in
13their underlying terms, including the right to direct or require
14foreclosure, rights to and rate of interest, and other incidents of
15being a lender, and the sale to each purchaser pursuant to this
16section shall be upon the same terms, subject to adjustment for the
17face or principal amount or percentage interest purchased and for
18interest earned or accrued. This subdivision does not preclude
19different selling prices for interests to the extent that these
20differences are reasonably related to changes in the market value
21of the loan occurring between the sales of these interests. The
22interest of each purchaser shall be recorded pursuant to
23subdivisions (a) to (c), inclusive, of Section 10234.
24(h) (1) Except as provided in paragraph (2), the aggregate
25principal amount of the notes
or interests sold, together with the
26unpaid principal amount of any encumbrances upon the real
27property senior thereto, shall not exceed the following percentages
28of the current market value of each parcel of the real property, as
29determined in writing by the broker or appraiser pursuant to Section
3010232.6, plus the amount for which the payment of principal and
31interest in excess of the percentage of current market value is
32insured for the benefit of the holders of the notes or interests by
33an insurer admitted to do business in this state by the Insurance
34Commissioner:
|
(A) |
Single-family residence, owner occupied |
80% |
|
(B) |
Single-family residence, not owner occupied |
75% |
|
(C) |
Commercial properties and income-producing properties not described in (B) or (E) |
65% |
|
(D) |
Single-family residentially zoned lot or parcel that has installed offsite improvements, including drainage, curbs, gutters, sidewalks, paved roads, and utilities as mandated by the political subdivision having jurisdiction over the lot or parcel |
65% |
|
(E) |
Land that produces income from crops, timber, or minerals |
60% |
|
(F) |
Land that is not income producing but has been zoned for (and, if required, approved for subdivision as) commercial or residential development |
50% |
|
(G) |
Other real property |
35% |
11(2) The percentage amounts specified in paragraph (1) may be
12exceeded when and to the extent that the broker determines that
13the encumbrance of the property in excess of these percentages is
14reasonable and prudent considering all relevant factors pertaining
15to the real property. However, in no event shall the aggregate
16principal amount of the notes or interests sold, together with the
17unpaid principal amount of any encumbrances upon the property
18senior thereto, exceed 80 percent of the current fair market value
19of improved real property or 50 percent of the current fair market
20value of unimproved real property, except in the case of a
21single-family zoned lot or parcel as defined in paragraph (1), which
22shall not exceed 65 percent of the current fair market value of that
23lot or parcel, plus the amount insured as specified in paragraph
24(1). A written statement shall be prepared by the broker that sets
25forth the material considerations and facts that
the broker relies
26upon for his or her determination, which shall be retained as part
27of the broker’s record of the transaction. Either a copy of the
28statement or the information contained therein shall be included
29in the disclosures required pursuant to subdivision (l).
30(3) A copy of the appraisal or the broker’s evaluation, for each
31parcel of real property securing the notes or interests, shall be
32delivered to each purchaser. For purposes of this paragraph,
33“appraisal” means a written estimate of value based upon the
34assembling, analyzing, and reconciling of facts and value indicators
35for the real property in question. A broker shall not purport to make
36an appraisal unless he or she is qualified on the basis of special
37training, preparation, or experience.
38(4) For construction or rehabilitation loans, the term “current
39market value” may be deemed to be the value of the completed
40
project if the following safeguards are met:
P86 1(A) An independent neutral third-party escrow holder is used
2for all deposits and disbursements.
3(B) The loan is fully funded, with the entire loan amount to be
4deposited in escrow prior to the recording of the deed or deeds of
5trust.
6(C) A comprehensive, detailed draw schedule is used to ensure
7proper and timely disbursements to allow for completion of the
8project.
9(D) The disbursement draws from the escrow account are based
10on verification from an independent qualified person who certifies
11that the work completed to date meets the related codes and
12standards and that the draws were made in accordance with the
13construction contract and draw schedule. For purposes of this
14subparagraph, “independent qualified
person” means a person who
15is not an employee, agent, or affiliate of the broker and who is a
16licensed architect, general contractor, structural engineer, or active
17local government building inspector acting in his or her official
18capacity.
19(E) An appraisal is completed by a qualified and licensed
20appraiser in accordance with the Uniform Standards of Professional
21Appraisal Practice (USPAP).
22(F) In addition to the transaction documentation required by
23subdivision (i), the documentation shall include a detailed
24description of actions that may be taken in the event of a failure
25to complete the project, whether that failure is due to default,
26insufficiency of funds, or other causes.
27(G) The entire amount of the loan does not exceed two million
28five hundred thousand dollars ($2,500,000).
29(5) If a note or an interest will be secured by more than one
30parcel of real property, for the purpose of determining the
31maximum amount of the note or interest, each security property
32shall be assigned a portion of the note or interest that shall not
33exceed the percentage of current market value determined by, and
34in accordance with, the provisions of paragraphs (1) and (2).
35(i) The documentation of the transaction shall require both of
36the following:
37(1) A default upon any note or interest is a default upon all notes
38or interests.
39(2) The holders of more than 50 percent of the recorded
40beneficial interests of the notes or interests may govern the actions
P87 1to be taken on behalf of all holders in accordance with Section
22941.9 of the Civil Code in the event
of default or foreclosure for
3matters that require direction or approval of the holders, including
4designation of the broker, servicing agent, or other person acting
5on their behalf, and the sale, encumbrance, or lease of real property
6owned by the holders resulting from foreclosure or receipt of a
7deed in lieu of foreclosure. The terms called for by this subdivision
8may be included in the deed of trust, in the assignment of interests,
9or in any other documentation as is necessary or appropriate to
10make them binding on the parties.
11(j) (1) The broker shall not accept any purchase or loan funds
12or other consideration from a prospective lender or purchaser, or
13directly or indirectly cause the funds or other consideration to be
14deposited in an escrow or trust account, except as to a specific loan
15or note secured by a deed of trust that the broker owns, is
16authorized to negotiate, or is unconditionally obligated to buy.
17(2) All funds received by the broker from the purchasers or
18lenders shall be handled in accordance with Section 10145 for
19disbursement to the persons thereto entitled upon recordation of
20the interests of the purchasers or lenders in the note and deed of
21trust. No provision of this article shall be construed as modifying
22or superseding applicable law regulating the escrow holder in any
23transaction or the handling of the escrow account.
24(3) The books and records of the broker or servicing agent, or
25both, shall be maintained in a manner that readily identifies
26transactions under this article and the receipt and disbursement of
27funds in connection with these transactions.
28(4) If required by paragraph (3) of subdivision (k), the review
29by the independent certified public accountant shall include a
30sample of transactions, as
reflected in the records of the trust
31account required pursuant to paragraph (1) of subdivision (k), and
32the bank statements and supporting documents. These documents
33shall be reviewed for compliance with this article with respect to
34the handling and distribution of funds. The sample shall be selected
35at random by the accountant from all these transactions and shall
36consist of both of the following:
37(A) Three sales made or 5 percent of the sales made pursuant
38to this article during the period for which the examination is
39conducted, whichever is greater.
P88 1(B) Ten payments processed or 2 percent of payments processed
2under this article during the period for which the examination is
3conducted, whichever is greater.
4(5) For the purposes of this subdivision, the transaction that
5constitutes a “sale” is the series of
transactions by which a series
6of notes of a maker, or the interests in the note of a maker, are sold
7or issued to their various purchasers under this article, including
8all receipts and disbursements in that process of funds received
9from the purchasers or lenders. The transaction that constitutes a
10“payment,” for the purposes of this subdivision, is the receipt of
11a payment from the person obligated on the note or from some
12other person on behalf of the person so obligated, including the
13broker or servicing agent, and the distribution of that payment to
14the persons entitled thereto. If a payment involves an advance paid
15by the broker or servicing agent as the result of a dishonored check,
16the inspection shall identify the source of funds from which the
17payment was made or, in the alternative, the steps that are
18reasonably necessary to determine that there was not a
19disbursement of trust funds. The accountant shall inspect for
20compliance with the following specific provisions of this section:
21paragraphs
(1), (2), and (3) of this subdivision and paragraphs (1)
22and (2) of subdivision (k).
23(6) Within 30 days of the close of the period for which the report
24is made, or within any additional time as the commissioner may
25in writing allow in a particular case, the accountant shall forward
26to the broker or servicing agent, as the case may be, and to the
27commissioner, the report of the accountant, stating that the
28inspection was performed in accordance with this section, listing
29the sales and the payments examined, specifying the nature of the
30deficiencies, if any, noted by the accountant with respect to each
31sale or payment, together with any further information as the
32accountant may wish to include, such as corrective steps taken
33with respect to any deficiency so noted, or stating that no
34deficiencies were observed. If the broker meets the threshold
35criteria of Section 10232, the report of the accountant shall be
36submitted as part of the quarterly
reports required under Section
3710232.25.
38(k) The notes or interests shall be sold subject to a written
39agreement that obligates a licensed real estate broker, or a person
40exempted from the licensing requirement for real estate brokers
P89 1under this chapter, to act as agent for the purchasers or lenders to
2service the note or notes and deed of trust, including the receipt
3and transmission of payments and the institution of foreclosure
4proceedings in the event of a default. A copy of this servicing
5agreement shall be delivered to each purchaser. The broker shall
6offer to the lenders or purchasers the services of the broker or one
7or more affiliates of the broker, or both, as servicing agent for each
8transaction conducted pursuant to this article. The agreement shall
9require all of the following:
10(1) (A) That payments received on the note or notes be
11deposited
immediately to a trust account maintained in accordance
12with this section and with the provisions for trust accounts of
13licensed real estate brokers contained in Section 10145 and Article
1415 (commencing with Section 2830.1) of Chapter 6 of Title 10 of
15the California Code of Regulations.
16(B) That payments deposited pursuant to subparagraph (A) shall
17not be commingled with the assets of the servicing agent or used
18for any transaction other than the transaction for which the funds
19are received.
20(2) That payments received on the note or notes shall be
21transmitted to the purchasers or lenders pro rata according to their
22respective interests within 25 days after receipt thereof by the
23agent. If the source for the payment is not the maker of the note,
24the agent shall inform the purchasers or lenders in writing of the
25source for payment. A broker or servicing agent who transmits to
26the
purchaser or lenders the broker’s or servicing agent’s own
27funds to cover payments due from the borrower but unpaid as a
28result of a dishonored check may recover the amount of the
29advances from the trust fund when the past due payment is
30received. However, this article does not authorize the broker,
31servicing agent, or any other person to issue, or to engage in any
32practice constituting, any guarantee or to engage in the practice of
33advancing payments on behalf of the borrower.
34(3) If the broker or person who is or becomes the servicing agent
35for notes or interests sold pursuant to this article upon which the
36payments due during any period of three consecutive months in
37the aggregate exceed one hundred twenty-five thousand dollars
38($125,000) or the number of persons entitled to the payments
39exceeds 120, the trust account or accounts of that broker or affiliate
40shall be inspected by an independent certified public accountant
P90 1at no less than
three-month intervals during the time the volume
2is maintained. Within 30 days after the close of the period for
3which the review is made, the report of the accountant shall be
4forwarded as provided in paragraph (6) of subdivision (j). If the
5broker is required to file an annual report pursuant to subdivision
6(o) or pursuant to Section 10232.2, the quarterly report pursuant
7to this subdivision need not be filed for the last quarter of the year
8for which the annual report is made. For the purposes of this
9subdivision, an affiliate of a broker is any person controlled by,
10controlling, or under common control with the broker.
11(4) Unless the servicing agent will receive notice pursuant to
12Section 2924b of the Civil Code, the servicing agent shall file a
13written request for notice of default upon any prior encumbrances
14and promptly notify the purchasers or lenders of any default on
15the prior encumbrances or on the note or notes subject to the
16
servicing agreement.
17(5) The servicing agent shall promptly forward copies of both
18of the following to each purchaser or lender:
19(A) Any notice of trustee sale filed on behalf of the purchasers
20or lenders.
21(B) Any request for reconveyance of the deed of trust received
22on behalf of the purchasers or lenders.
23(l) The broker shall disclose in writing to each purchaser or
24lender the material facts concerning the transaction on a disclosure
25form adopted or approved by the commissioner pursuant to Section
2610232.5, subject to the following:
27(1) The disclosure form shall include a description of the terms
28upon which the note and deed of trust are being sold, including
29the terms of the undivided
interests being offered therein, including
30the following:
31(A) In the case of the sale of an existing note:
32(i) The aggregate sale price of the note.
33(ii) The percent of the premium over or discount from the
34principal balance plus accrued but unpaid interest.
35(iii) The effective rate of return to the purchasers if the note is
36paid according to its terms.
37(iv) The name and address of the escrow holder for the
38transaction.
39(v) A description of, and the estimated amount of, each cost
40payable by the seller in connection with the sale and a description
P91 1of, and the estimated amount of, each cost payable by the
2purchasers in
connection with the sale.
3(B) In the case of the origination of a note:
4(i) The name and address of the escrow holder for the
5transaction.
6(ii) The anticipated closing date.
7(iii) A description of, and the estimated amount of, each cost
8payable by the borrower in connection with the loan and a
9description of, and the estimated amount of, each cost payable by
10the lenders in connection with the loan.
11(C) In the case of a transaction involving a note or interest
12secured by more than one parcel of real property, in addition to
13the requirements of subparagraphs (A) and (B):
14(i) The address, description, and estimated fair market
value of
15each property securing the loan.
16(ii) The amount of the available equity in each property securing
17the loan after the loan amount to be apportioned to each property
18is assigned.
19(iii) The loan to value percentage for each property after the
20loan amount to be apportioned to each property is assigned pursuant
21to subdivision (h).
22(2) A copy of the written statement or information contained
23therein, as required by paragraph (2) of subdivision (h), shall be
24included in the disclosure form.
25(3) Any interest of the broker or affiliate in the transaction, as
26described in subdivision (e), shall be included with the disclosure
27form.
28(4) When the particular circumstances of a transaction
make
29information not specified in the disclosure form material or
30essential to keep the information provided in the form from being
31misleading, and the other information is known to the broker, the
32other information shall also be provided by the broker.
33(5) If more than one parcel of real property secures the notes or
34interests, the disclosure form shall also fully disclose any risks to
35investors associated with securing the notes or interests with
36multiple parcels of real property.
37(m) The broker or servicing agent shall furnish any purchaser
38of a note or interest, upon request, with the names and addresses
39of the purchasers of the other notes or interests in the loan.
P92 1(n) No agreement in connection with a transaction covered by
2this article shall grant to the real estate broker, the servicing agent,
3or any
affiliate of the broker or agent the option or election to
4acquire the interests of the purchasers or lenders or to acquire the
5real property securing the interests. This subdivision shall not
6prohibit the broker or affiliate from acquiring the interests, with
7the consent of the purchasers or lenders whose interests are being
8purchased, or the property, with the written consent of the
9purchasers or lenders if the consent is given at the time of the
10acquisition.
11(o) Each broker who conducts transactions under this article,
12or broker or person who becomes the servicing agent for notes or
13interests sold pursuant to this article, who meets the criteria of
14paragraph (3) of subdivision (k), shall file with the commissioner
15an annual report of a review of its trust account. The report shall
16be prepared and filed in accordance with subdivision (a) of Section
1710232.2 and the rules and procedures thereunder of the
18commissioner. That report shall cover
the broker’s transactions
19under this article and, if the broker also meets the threshold criteria
20set forth in Section 10232, the broker’s transactions subject to that
21section shall be included as well.
22(p) Each broker conducting transactions pursuant to this article,
23or broker or person who becomes the servicing agent for notes or
24interests sold pursuant to this article, who meets the criteria of
25paragraph (3) of subdivision (k), shall file with the commissioner
26a report of the transactions that is prepared in accordance with
27subdivision (c) of Section 10232.2. If the broker also meets the
28threshold criteria of Section 10232, the report shall also include
29the transactions subject to that section. This report shall be
30confidential pursuant to subdivision (f) of Section 10232.2.
31(q) This section shall become operative on July 1, 2018.
Section 10243 of the Business and Professions Code
33 is amended to read:
If the loan is not consummated due to the failure of the
35borrower to disclose the outstanding liens of record or the correct
36current vested title which is material to the loan upon the real
37property as provided by subdivision (c) of Section 10241, the
38borrower shall be liable for the costs and expenses provided in
39subdivision (a) of Section 10241 which have been paid or incurred,
40and shall be liable for the payment of one-half of the charges
P93 1provided in subdivision (b) of Section 10241. An exclusive
2agreement authorizing or employing a licensee to negotiate a loan
3secured directly or collaterally by a lien on real property shall be
4limited to a term of not more than 45 days.
5If the loan is not consummated and the broker is entitled to any
6charges, costs or expenses
authorized by this article, he or she may
7not record a lien or encumbrance against the borrower’s property
8except subsequent to the filing of a legal action pursuant to the
9Code of Civil Procedure to recover said charges, costs or expenses.
10However, nothing contained herein shall prohibit a broker from
11recording a lien pursuant to a voluntary lien agreement in
12conjunction with a stipulation to dismiss an actual or proposed
13complaint for damages entitling the broker to such charges, costs
14or expenses after written notice to the borrower that the broker
15proposes or has initiated a complaint for damages pursuant to the
16Code of Civil Procedure.
17This section shall repeal on July 1, 2018.
Section 10243 is added to the Business and
19Professions Code, to read:
If the loan is not consummated due to the failure of the
21borrower to disclose the outstanding liens of record or the correct
22current vested title which is material to the loan upon the real
23property as provided by subdivision (c) of Section 10241, the
24borrower shall be liable for the costs and expenses provided in
25subdivision (a) of Section 10241 that have been paid or incurred
26and shall be liable for the payment of one-half of the charges
27provided in subdivision (b) of Section 10241. An exclusive
28agreement authorizing or retaining a licensee to negotiate a loan
29secured directly or collaterally by a lien on real property shall be
30limited to a term of not more than 45 days.
31If the loan is not consummated and the broker is entitled to any
32charges, costs, or expenses authorized by this
article, he or she
33may not record a lien or encumbrance against the borrower’s
34property except subsequent to the filing of a legal action pursuant
35to the Code of Civil Procedure to recover said charges, costs, or
36expenses. However, nothing contained herein shall prohibit a
37broker from recording a lien pursuant to a voluntary lien agreement
38in conjunction with a stipulation to dismiss an actual or proposed
39complaint for damages entitling the broker to such charges, costs,
40or expenses after written notice to the borrower that the broker
P94 1proposes or has initiated a complaint for damages pursuant to the
2Code of Civil Procedure.
3This section shall become operative on July 1, 2018.
Section 10509 of the Business and Professions Code
5 is amended to read:
(a) It is unlawful for a mineral, oil, and gas broker or
7a real estate broker to employ or compensate, directly or indirectly,
8any person who is not a mineral, oil, and gas broker or a licensed
9real estate salesperson in the employ of the real estate broker for
10performing any acts for which a mineral, oil, and gas broker license
11is required.
12(b) It is a misdemeanor, punishable by a fine of not exceeding
13one hundred dollars ($100) for each offense, for any person,
14whether obligor, escrow holder or otherwise, to pay or deliver
15compensation to a person for performing any acts for which a
16mineral, oil, and gas broker license is required unless that person
17is known by the payer to be or has presented evidence to the payer
18that
he or she was a licensed mineral, oil, and gas broker at the
19time the compensation was earned.
20(c) This section shall repeal on July 1, 2018.
Section 10509 is added to the Business and
22Professions Code, to read:
(a) It is unlawful for a mineral, oil, and gas broker or
24a real estate broker to compensate, directly or indirectly, any person
25who is not a mineral, oil, and gas broker or a licensed real estate
26salesperson retained by the real estate broker for performing any
27acts for which a mineral, oil, and gas broker license is required.
28(b) It is a misdemeanor, punishable by a fine of not exceeding
29one hundred dollars ($100) for each offense, for any person,
30whether obligor, escrow holder or otherwise, to pay or deliver
31compensation to a person for performing any acts for which a
32mineral, oil, and gas broker license is required unless that person
33is known by the payer to be or has presented evidence to the payer
34that he or she was a licensed mineral,
oil, and gas broker at the
35time the compensation was earned.
36(c) This section shall become operative on July 1, 2018.
Section 10561 of the Business and Professions Code
38 is amended to read:
(a) The commissioner may, upon his own motion, and
40shall, upon the verified complaint in writing of any person,
P95 1investigate the actions of any person engaged in the business or
2acting in the capacity of a mineral, oil and gas licensee, within this
3state, and he may temporarily suspend or permanently revoke a
4mineral, oil and gas license at any time if the licensee, while a
5mineral, oil and gas licensee, in performing or attempting to
6perform any of the acts within the scope of this chapter, has been
7guilty of any of the following:
8(1) Making any substantial misrepresentation.
9(2) Making any false promises of a character likely to influence,
10persuade or induce.
11(3) Acting for more than one
party in a transaction without the
12knowledge or consent of all parties thereto.
13(4) Commingling with his own money or property the money
14or property of others which is received and held by him.
15(5) Claiming or demanding a fee, compensation or commission
16under any exclusive agreement authorizing or employing a licensee
17to sell, buy or
exchange mineral, oil or gas property for
18compensation, or commission where such agreement does not
19contain a definite, specified date of final and complete termination.
20(6) The claiming or taking by a licensee of any secret or
21undisclosed amount of compensation, commission or profit or the
22failure of a licensee to reveal to the employer of such licensee the
23full amount of such licensee’s compensation, commission, or profit
24under any agreement authorizing or employing such licensee to
25do any acts for which a license is required under this chapter for
26compensation or commission prior to or coincident with the signing
27of an agreement evidencing the meeting of the minds of
the
28contracting parties, regardless of the form of such agreement,
29whether evidenced by documents in an escrow or by any other or
30different procedure.
31(7) The use by a licensee of any provision allowing the licensee
32an option to purchase in an agreement authorizing or employing
33such licensee to sell, buy or exchange mineral, oil or gas property
34for compensation or commission, except when such licensee prior
35to or coincident with election to exercise such option to purchase
36reveals in writing to the employer the full amount of licensee’s
37profit and obtains the written consent of the employer approving
38the amount of such profit.
P96 1(8) Any other conduct, whether of the same or a different
2character than specified in this section, which constitutes fraud or
3dishonest dealing.
4(b) This section shall repeal on July 1, 2018.
Section 10561 is added to the Business and
6Professions Code, to read:
(a) The commissioner may, upon his own motion, and
8shall, upon the verified complaint in writing of any person,
9investigate the actions of any person engaged in the business or
10acting in the capacity of a mineral, oil, and gas licensee within this
11state, and he may temporarily suspend or permanently revoke a
12mineral, oil, and gas license at any time if the licensee, while a
13mineral, oil, and gas licensee, in performing or attempting to
14perform any of the acts within the scope of this chapter has been
15guilty of any of the following:
16(1) Making any substantial misrepresentation.
17(2) Making any false promises of a character likely to influence,
18persuade, or induce.
19(3) Acting for more than one party in a transaction without the
20knowledge or consent of all parties thereto.
21(4) Commingling with his or her own money or property or the
22money or property of others that is received and held by him or
23her.
24(5) Claiming or demanding a fee, compensation, or commission
25under any exclusive agreement authorizing or retaining a licensee
26to sell, buy, or exchange mineral, oil, or gas property for
27compensation, or commission where that agreement does not
28contain a definite, specified date of final and complete termination.
29(6) Claiming or taking by a licensee of any secret or undisclosed
30amount of compensation, commission, or profit or the failure of a
31licensee to reveal to the principal retaining the licensee the full
32amount of
the licensee’s compensation, commission, or profit
33under any agreement retaining the licensee to do any acts for which
34a license is required under this chapter for compensation or
35commission prior to or coincident with the signing of an agreement
36evidencing the meeting of the minds of the contracting parties,
37regardless of the form of such agreement, whether evidenced by
38documents in an escrow or by any other or different procedure.
39(7) The use by a licensee of any provision allowing the licensee
40an option to purchase in an agreement authorizing or retaining the
P97 1licensee to sell, buy, or exchange mineral, oil, or gas property for
2compensation or commission, except when the licensee prior to
3or coincident with election to exercise the option to purchase
4reveals in writing to the responsible broker the full amount of the
5licensee’s profit and obtains the written consent of the responsible
6broker approving the amount of that profit.
7(8) Any other conduct, whether of the same or a different
8character than specified in this section, that constitutes fraud or
9dishonest dealing.
10(b) This section shall become operative on July 1, 2018.
Section 11212 of the Business and Professions Code
13 is amended to read:
As used in this chapter, the following definitions apply:
15(a) “Accommodation” means any apartment, condominium or
16cooperative unit, cabin, lodge, hotel or motel room, or other private
17or commercial structure containing toilet facilities therein that is
18designed and available, pursuant to applicable law, for use and
19occupancy as a residence by one or more individuals, or any unit
20or berth on a commercial passenger ship, which is included in the
21offering of a time-share plan.
22(b) “Advertisement” means any written, oral, or electronic
23communication that is directed to or targeted to persons within the
24state or such a communication made from this state or relating to
25a time-share plan
located in this state and contains a promotion,
26inducement, or offer to sell a time-share plan, including, but not
27limited to, brochures, pamphlets, radio and television scripts,
28electronic media, telephone and direct mail solicitations, and other
29means of promotion.
30(c) “Association” means the organized body consisting of the
31purchasers of time-share interests in a time-share plan.
32(d) “Assessment” means the share of funds required for the
33payment of common expensesbegin delete whichend deletebegin insert thatend insert is assessed from time
34to time against each purchaser by the managing entity.
35
(e) “Bureau” means the Bureau of Real Estate.
36(e)
end delete37begin insert(f)end insert “Commissioner” means the Real Estate Commissioner.
38(f)
end delete
39begin insert(g)end insert “Component site” means a specific geographic location
40where accommodations that are part of a multisite time-share plan
P98 1are located. Separate phases of a time-share property in a specific
2
geographic location and under common management shall not be
3deemed a component site.
4(g)
end delete5begin insert(h)end insert “Conspicuous type” means either of the following:
6(1) Type in upper and lower case letters two point sizes larger
7than the nearest nonconspicuous type, exclusive of headings, on
8the page on which it appears but in at least 10-point type.
9(2) Conspicuous type may be utilized in contracts for purchase
10or public permits only where required by law or as authorized by
11the commissioner.
12(h) “Department” means the Department of Real Estate.
end delete
13(i) “Developer” means and includes any person who creates a
14time-share plan or is in the business of selling time-share interests,
15other than those employees or agents of the developer who sell
16time-share interests on the developer’s behalf, or employs agents
17to do the same, or any person who succeeds to the interest of a
18developer by sale, lease, assignment, mortgage, or other transfer,
19but the term includes only those persons who offer time-share
20interests for disposition in the ordinary course of business.
21(j) “Dispose” or “disposition” means a voluntary transfer or
22assignment of any legal or equitable interest in a time-share plan,
23other than the transfer, assignment, or release of a security interest.
24(k) “Exchange company” means any person owning or
25operating, or both owning and operating, an exchange program.
26(l) “Exchange program” means any method, arrangement, or
27procedure for the voluntary exchange of time-share interests or
28other property interests. The term does not include the assignment
29of the right to use and occupy accommodations to owners of
30time-share interests within a single site time-share plan. Any
31method, arrangement, or procedure that otherwise meets this
32definition in which the purchaser’s total contractual financial
33obligation exceeds three thousand dollars ($3,000) per any
34individual, recurring time-share period, shall be regulated as a
35time-share plan in accordance with this chapter. For purposes of
36determining the purchaser’s total contractual financial obligation,
37amounts to be paid as a result of renewals and options to renew
38shall be included in the term except for the following: (1) amounts
39to be paid as a result of any optional renewal that a purchaser, in
40his or her sole discretion may elect to exercise, (2) amounts
to be
P99 1paid as a result of any automatic renewal in which the purchaser
2has a right to terminate during the renewal period at any time and
3receive a pro rata refund for the remaining unexpired renewal term,
4or (3) amounts to be paid as a result of an automatic renewal in
5which the purchaser receives a written notice no less than 30 nor
6more than 90 days prior to the date of renewal informing the
7purchaser of the right to terminate prior to the date of renewal.
8Notwithstanding these exceptions, if the contractual financial
9obligation exceeds three thousand dollars ($3,000) for any
10three-year period of any renewal term, amounts to be paid as a
11result of that renewal shall be included in determining the
12purchaser’s total contractual financial obligation.
13(m) “Incidental benefit” is an accommodation, product, service,
14discount, or other benefit, other than an exchange program, that
15is offered to a prospective purchaser of a time-share interest prior
16
to the end of the rescission period set forth in Section 11238, the
17continuing availability of which for the use and enjoyment of
18owners of time-share interests in the time-share plan is limited to
19a term of not more than three years, subject to renewal or extension.
20The term shall not include an offer of the use of the
21accommodation, product, service, discount, or other benefit on a
22free or discounted one-time basis.
23(n) “Managing entity” means the person who undertakes the
24duties, responsibilities, and obligations of the management of a
25time-share plan.
26(o) “Offer” means any inducement, solicitation, or other attempt,
27whether by marketing, advertisement, oral or written presentation,
28or any other means, to encourage a person to acquire a time-share
29interest in a time-share plan, other than as security for an
30obligation.
31(p) “Person” means a natural person, corporation, limited
32liability company, partnership, joint venture, association, estate,
33trust, government, governmental subdivision or agency, or other
34legal entity, or any combination thereof.
35(q) “Promotion” means a plan or device, including one involving
36the possibility of a prospective purchaser receiving a vacation,
37discount vacation, gift, or prize, used by a developer, or an agent,
38independent contractor, or employee of any of the same on behalf
39of the developer, in connection with the offering and sale of
40time-share interests in a time-share plan.
P100 1(r) “Public report” means a preliminary public report, conditional
2public report, final public report, or other such disclosure document
3authorized for use in connection with the offering of time-share
4interests pursuant to this chapter.
5(s) “Purchaser” means any person, other than a developer, who
6by means of a voluntary transfer for consideration acquires a legal
7or equitable interest in a time-share plan other than as security for
8an obligation.
9(t) “Purchase contract” means a document pursuant to which a
10developer becomes legally obligated to sell, and a purchaser
11becomes legally obligated to buy, a time-share interest.
12(u) “Reservation system” means the method, arrangement, or
13procedure by which a purchaser, in order to reserve the use or
14occupancy of any accommodation of a multisite time-share plan
15for one or more time-share periods, is required to compete with
16other purchasers in the same multisite time-share plan, regardless
17of whether the reservation system is operated and maintained by
18the multisite time-share plan managing entity, an exchange
19
company, or any other person. If a purchaser is required to use an
20exchange program as the purchaser’s principal means of obtaining
21the right to use and occupy accommodations in a multisite
22time-share plan, that arrangement shall be deemed a reservation
23system. When an exchange company utilizes a mechanism for the
24exchange of use of time-share periods among members of an
25exchange program, that utilization is not a reservation system of
26a multisite time-share plan.
27(v) “Short-term product” means the right to use accommodations
28on a one-time or recurring basis for a period or periods not to
29exceed 30 days per stay and for a term of three years or less, and
30that includes an agreement that all or a portion of the consideration
31paid by a person for the short-term product will be applied to or
32credited against the price of a future purchase of a time-share
33interest or that the cost of a future purchase of a time-share interest
34will be fixed or
locked-in at a specified price.
35(w) “Time-share instrument” means one or more documents,
36by whatever name denominated, creating or governing the
37operation of a time-share plan and includes the declaration
38dedicating accommodations to the time-share plan.
39(x) “Time-share interest” means and includes either of the
40following:
P101 1(1) A “time-share estate,” which is the right to occupy a
2time-share property, coupled with a freehold estate or an estate for
3years with a future interest in a time-share property or a specified
4portion thereof.
5(2) A “time-share use,” which is the right to occupy a time-share
6property, which right is neither coupled with a freehold interest,
7nor coupled with an estate for years with a future interest, in a
8time-share property.
9(y) “Time-share period” means the period or periods of time
10when the purchaser of a time-share plan is afforded the opportunity
11to use the accommodations of a time-share plan.
12(z) “Time-share plan” means any arrangement, plan, scheme,
13or similar device, other than an exchange program, whether by
14membership agreement, sale, lease, deed, license, right to use
15agreement, or by any other means, whereby a purchaser, in
16exchange for consideration, receives ownership rights in or the
17right to use accommodations for a period of time less than a full
18year during any given year, on a recurring basis for more than one
19year, but not necessarily for consecutive years. A time-share plan
20may be either of the following:
21(1) A “single site time-share plan,” which is the right to use
22accommodations at a single time-share property.
23(2) A “multisite time-share plan,” which includes either of the
24following:
25(A) A “specific time-share interest,” which is the right to use
26accommodations at a specific time-share property, together with
27use rights in accommodations at one or more other component
28sites created by or acquired through the time-share plan’s
29reservation system.
30(B) A “nonspecific time-share interest,” which is the right to
31use accommodations at more than one component site created by
32or acquired through the time-share plan’s reservation system, but
33including no specific right to use any particular accommodations.
34(aa) “Time-share property” means one or more accommodations
35subject to the same time-share instrument, together with any other
36property or rights to property
appurtenant to those
37accommodations.
38This section shall repeal on July 1, 2018.
end deleteSection 11212 is added to the Business and
40Professions Code, to read:
As used in this chapter, the following definitions apply:
2(a) “Accommodation” means any apartment, condominium, or
3cooperative unit, cabin, lodge, hotel or motel room, or other private
4or commercial structure containing toilet facilities therein that is
5designed and available, pursuant to applicable law, for use and
6occupancy as a residence by one or more individuals, or any unit
7or berth on a commercial passenger ship that is included in the
8offering of a time-share plan.
9(b) “Advertisement” means any written, oral, or electronic
10communication that is directed to or targeted to persons within the
11state or such a communication made from this state or relating to
12a time-share plan
located in this state and contains a promotion,
13inducement, or offer to sell a time-share plan, including, but not
14limited to, brochures, pamphlets, radio and television scripts,
15electronic media, telephone and direct mail solicitations, and other
16means of promotion.
17(c) “Association” means the organized body consisting of the
18purchasers of time-share interests in a time-share plan.
19(d) “Assessment” means the share of funds required for the
20payment of common expenses that is assessed from time to time
21against each purchaser by the managing entity.
22(e) “Bureau” means the Bureau of Real Estate.
23(f) “Commissioner” means the Real Estate Commissioner.
24(g) “Component site” means a specific
geographic location
25where accommodations that are part of a multisite time-share plan
26are located. Separate phases of a time-share property in a specific
27geographic location and under common management shall not be
28deemed a component site.
29(h) “Conspicuous type” means either of the following:
30(1) Type in uppercase and lowercase letters two point sizes
31larger than the nearest nonconspicuous type, exclusive of headings,
32on the page on which it appears but in at least 10-point type.
33(2) Conspicuous type may be utilized in contracts for purchase
34or public permits only where required by law or as authorized by
35the commissioner.
36(i) “Developer” means and includes any person who creates a
37time-share plan or is in the business of selling time-share interests,
38
other than those employees or agents of the developer who sell
39time-share interests on the developer’s behalf, or retains agents to
40do the same, or any person who succeeds to the interest of a
P103 1developer by sale, lease, assignment, mortgage, or other transfer,
2but the term includes only those persons who offer time-share
3interests for disposition in the ordinary course of business.
4(j) “Dispose” or “disposition” means a voluntary transfer or
5assignment of any legal or equitable interest in a time-share plan,
6other than the transfer, assignment, or release of a security interest.
7(k) “Exchange company” means any person owning or
8operating, or both owning and operating, an exchange program.
9(l) “Exchange program” means any method, arrangement, or
10procedure for the voluntary exchange of time-share interests or
11
other property interests. The term does not include the assignment
12of the right to use and occupy accommodations to owners of
13time-share interests within a single-site time-share plan. Any
14method, arrangement, or procedure that otherwise meets this
15definition in which the purchaser’s total contractual financial
16obligation exceeds three thousand dollars ($3,000) per any
17individual, recurring time-share period, shall be regulated as a
18time-share plan in accordance with this chapter. For purposes of
19determining the purchaser’s total contractual financial obligation,
20amounts to be paid as a result of renewals and options to renew
21shall be included in the term except for the following: (1) amounts
22to be paid as a result of any optional renewal that a purchaser, in
23his or her sole discretion may elect to exercise, (2) amounts to be
24paid as a result of any automatic renewal in which the purchaser
25has a right to terminate during the renewal period at any time and
26receive a pro rata refund for the remaining unexpired
renewal term,
27or (3) amounts to be paid as a result of an automatic renewal in
28which the purchaser receives a written notice no less than 30 nor
29more than 90 days prior to the date of renewal informing the
30purchaser of the right to terminate prior to the date of renewal.
31Notwithstanding these exceptions, if the contractual financial
32obligation exceeds three thousand dollars ($3,000) for any
33three-year period of any renewal term, amounts to be paid as a
34result of that renewal shall be included in determining the
35purchaser’s total contractual financial obligation.
36(m) “Incidental benefit” is an accommodation, product, service,
37discount, or other benefit, other than an exchange program, that
38is offered to a prospective purchaser of a time-share interest prior
39to the end of the rescission period set forth in Section 11238, the
40continuing availability of which for the use and enjoyment of
P104 1owners of time-share interests in the time-share plan is
limited to
2a term of not more than three years, subject to renewal or extension.
3The term shall not include an offer of the use of the
4accommodation, product, service, discount, or other benefit on a
5free or discounted one-time basis.
6(n) “Managing entity” means the person who undertakes the
7duties, responsibilities, and obligations of the management of a
8time-share plan.
9(o) “Offer” means any inducement, solicitation, or other attempt,
10whether by marketing, advertisement, oral or written presentation,
11or any other means, to encourage a person to acquire a time-share
12interest in a time-share plan, other than as security for an
13obligation.
14(p) “Person” means a natural person, corporation, limited
15liability company, partnership, joint venture, association, estate,
16trust, government, governmental subdivision or agency,
or other
17legal entity, or any combination thereof.
18(q) “Promotion” means a plan or device, including one involving
19the possibility of a prospective purchaser receiving a vacation,
20discount vacation, gift, or prize, used by a developer, or an agent,
21independent contractor, or employee of any of the same on behalf
22of the developer, in connection with the offering and sale of
23time-share interests in a time-share plan.
24(r) “Public report” means a preliminary public report, conditional
25public report, final public report, or other such disclosure document
26authorized for use in connection with the offering of time-share
27interests pursuant to this chapter.
28(s) “Purchaser” means any person, other than a developer, who
29by means of a voluntary transfer for consideration acquires a legal
30or equitable interest in a time-share
plan other than as security for
31an obligation.
32(t) “Purchase contract” means a document pursuant to which a
33developer becomes legally obligated to sell, and a purchaser
34becomes legally obligated to buy, a time-share interest.
35(u) “Reservation system” means the method, arrangement, or
36procedure by which a purchaser, in order to reserve the use or
37occupancy of any accommodation of a multisite time-share plan
38for one or more time-share periods, is required to compete with
39other purchasers in the same multisite time-share plan regardless
40of whether the reservation system is operated and maintained by
P105 1the multisite time-share plan managing entity, an exchange
2company, or any other person. If a purchaser is required to use an
3exchange program as the purchaser’s principal means of obtaining
4the right to use and occupy accommodations in a multisite
5time-share plan, that arrangement shall
be deemed a reservation
6system. When an exchange company utilizes a mechanism for the
7exchange of use of time-share periods among members of an
8exchange program, that utilization is not a reservation system of
9a multisite time-share plan.
10(v) “Short-term product” means the right to use accommodations
11on a one-time or recurring basis for a period or periods not to
12exceed 30 days per stay and for a term of three years or less, and
13that includes an agreement that all or a portion of the consideration
14paid by a person for the short-term product will be applied to or
15credited against the price of a future purchase of a time-share
16interest or that the cost of a future purchase of a time-share interest
17will be fixed or locked-in at a specified price.
18(w) “Time-share instrument” means one or more documents,
19by whatever name denominated, creating or governing the
20operation of a time-share
plan and includes the declaration
21dedicating accommodations to the time-share plan.
22(x) “Time-share interest” means and includes either of the
23following:
24(1) A “time-share estate,” which is the right to occupy a
25time-share property, coupled with a freehold estate or an estate for
26years with a future interest in a time-share property or a specified
27portion thereof.
28(2) A “time-share use,” which is the right to occupy a time-share
29property, which right is neither coupled with a freehold interest,
30nor coupled with an estate for years with a future interest, in a
31time-share property.
32(y) “Time-share period” means the period or periods of time
33when the purchaser of a time-share plan is afforded the opportunity
34to use the accommodations of a time-share
plan.
35(z) “Time-share plan” means any arrangement, plan, scheme,
36or similar device, other than an exchange program, whether by
37membership agreement, sale, lease, deed, license, right to use
38agreement, or by any other means, whereby a purchaser, in
39exchange for consideration, receives ownership rights in or the
40right to use accommodations for a period of time less than a full
P106 1year during any given year, on a recurring basis for more than one
2year, but not necessarily for consecutive years. A time-share plan
3may be either of the following:
4(1) A “single-site time-share plan” that is the right to use
5accommodations at a single time-share property.
6(2) A “multisite time-share plan” that includes either of the
7following:
8(A) A “specific time-share interest”
that is the right to use
9accommodations at a specific time-share property, together with
10use rights in accommodations at one or more other component
11sites created by or acquired through the time-share plan’s
12reservation system.
13(B) A “nonspecific time-share interest” that is the right to use
14accommodations at more than one component site created by or
15acquired through the time-share plan’s reservation system, but
16including no specific right to use any particular accommodations.
17(aa) “Time-share property” means one or more accommodations
18subject to the same time-share instrument, together with any other
19property or rights to property appurtenant to those
20accommodations.
21This section shall become operative on July 1, 2018.
Section 11267 of the Business and Professions Code
23 is amended to read:
(a) The time-share instruments shall require the
25employment of a managing entity for the time-share plan or
26component site pursuant to a written management agreement that
27shall include all of the following provisions:
28(1) Delegation of authority to the managing entity to carry out
29the duties and obligations of the association or the developer to
30the time-share interest owners.
31(2) Authority of the managing entity to employ subagents, if
32applicable.
33(3) A term of not more than five years with automatic renewals
34for successive three-year periods after expiration of the first term
35unless the
association by the vote or written assent of a majority
36of the voting power residing in members other than the developer
37determines not to renew the contract and gives appropriate notice
38of that determination. However, in those time-share plans where
39the association is controlled by owners other than the developer,
40the management agreement shall not be subject to the term
P107 1limitations set forth in this section, and any longer term shall not
2be grounds for denial of a public report, unless the longer term of
3 the management contract is the result of the developer exercising
4control.
5(4) Termination for cause at any time by the governing body of
6the association. If the single site time-share plan or the component
7site of a multisite time-share plan is located within the state, then
8that termination provision shall include a provision for arbitration
9in accordance with the Commercial Arbitration Rules of the
10American Arbitration Association if
requested by or on behalf of
11the managing entity.
12(5) Not less than 90 days’ written notice to the association of
13the intention of the managing entity to resign.
14(6) Enumeration of the powers and duties of the managing entity
15in the operation of time-share plan and the maintenance of the
16accommodations comprising the time-share plan.
17(7) Compensation to be paid to the managing entity.
18(8) Records to be maintained by the managing entity.
19(9) A requirement that the managing entity provide a policy for
20fidelity insurance or bond for the activities of the managing entity,
21payable to the association, which shall be in an amount no less
22than the sum of the largest amount of funds expected to be
held
23or controlled by the managing entity at any time during the year,
24pursuant to the budget. The commissioner may provide a reduction
25in the insurance policy or bond amounts required by this paragraph.
26(10) Errors and omissions insurance coverage for the managing
27entity, if available.
28(11) Delineation of the authority of the managing entity and
29persons authorized by the managing entity to enter into
30accommodations of the time-share plan for the purpose of cleaning,
31maid service, maintenance and repair including emergency repairs,
32and for the purpose of abating a nuisance or dangerous, unlawful,
33or prohibited activity being conducted in the accommodation.
34(12) Description of the duties of the managing entity, including,
35but not limited to, the following:
36(A) Collection of all assessments as provided in the time-share
37instruments.
38(B) Maintenance of all books and records concerning the
39time-share plan.
P108 1(C) Scheduling occupancy of accommodations, when purchasers
2are not entitled to use specific time-share periods, so that all
3purchasers will be provided the opportunity for use and possession
4of the accommodations of the time-share plan, that they have
5purchased.
6(D) Providing for the annual meeting of the association of
7owners.
8(E) Performing any other functions and duties related to the
9maintenance of the accommodations or that are required by the
10time-share instrument.
11(b) Any written management agreement in existence as of
the
12effective date of this chapter shall not be subject to the term
13limitations set forth above.
14(c) For single site time-share plans and component sites of a
15multisite time-share plan located outside of the state, the time-share
16instruments shall include the subject matter set forth in subdivision
17(a). The time-share instruments shall be in compliance with the
18applicable laws of the state or jurisdiction in which the time-share
19property or component site is located, and if a conflict exists
20between laws of the situs state and the requirements set forth in
21this section, the law of the situs state shall control. If the time-share
22instruments provide for the matters contained in subdivision (a),
23the time-share instruments shall be deemed to be in compliance
24with the requirements of subdivision (a) and the developer shall
25not be required to make revisions in order to comply with
26subdivision (a) and this subdivision.
27(d) This section shall repeal on July 1, 2018.
Section 11267 is added to the Business and
29Professions Code, to read:
(a) The time-share instruments shall require the use of
31a managing entity for the time-share plan or component site
32pursuant to a written management agreement that shall include all
33of the following provisions:
34(1) Delegation of authority to the managing entity to carry out
35the duties and obligations of the association or the developer to
36the time-share interest owners.
37(2) Authority of the managing entity to use subagents, if
38applicable.
39(3) A term of not more than five years with automatic renewals
40for successive three-year periods after expiration of the first term
P109 1unless the association by the vote or written
assent of a majority
2of the voting power residing in members other than the developer
3determines not to renew the contract and gives appropriate notice
4of that determination. However, in those time-share plans where
5the association is controlled by owners other than the developer,
6the management agreement shall not be subject to the term
7limitations set forth in this section, and any longer term shall not
8be grounds for denial of a public report, unless the longer term of
9the management contract is the result of the developer exercising
10control.
11(4) Termination for cause at any time by the governing body of
12the association. If the single-site time-share plan or the component
13site of a multisite time-share plan is located within the state, then
14that termination provision shall include a provision for arbitration
15in accordance with the Commercial Arbitration Rules of the
16American Arbitration Association if requested by or on behalf of
17the
managing entity.
18(5) Not less than 90 days’ written notice to the association of
19the intention of the managing entity to resign.
20(6) Enumeration of the powers and duties of the managing entity
21in the operation of the time-share plan and the maintenance of the
22accommodations comprising the time-share plan.
23(7) Compensation to be paid to the managing entity.
24(8) Records to be maintained by the managing entity.
25(9) A requirement that the managing entity provide a policy for
26fidelity insurance or bond for the activities of the managing entity,
27payable to the association, that shall be in an amount no less than
28the sum of the largest amount of funds expected to be held or
29controlled by the
managing entity at any time during the year,
30pursuant to the budget. The commissioner may provide a reduction
31in the insurance policy or bond amounts required by this paragraph.
32(10) Errors and omissions of insurance coverage for the
33managing entity, if available.
34(11) Delineation of the authority of the managing entity and
35persons authorized by the managing entity to enter into
36accommodations of the time-share plan for the purpose of cleaning,
37maid service, maintenance, and repair, including emergency repairs,
38and for the purpose of abating a nuisance or dangerous, unlawful,
39or prohibited activity being conducted in the accommodation.
P110 1(12) Description of the duties of the managing entity, including,
2but not limited to, the following:
3(A) Collection of
all assessments as provided in the time-share
4instruments.
5(B) Maintenance of all books and records concerning the
6time-share plan.
7(C) Scheduling occupancy of accommodations, when purchasers
8are not entitled to use specific time-share periods, so that all
9purchasers will be provided the opportunity for use and possession
10of the accommodations of the time-share plan, that they have
11purchased.
12(D) Providing for the annual meeting of the association of
13owners.
14(E) Performing any other functions and duties related to the
15maintenance of the accommodations or that are required by the
16time-share instrument.
17(b) Any written management agreement in existence as of the
18effective date of this
chapter shall not be subject to the term
19limitations set forth above.
20(c) For single-site time-share plans and component sites of a
21multisite time-share plan located outside of the state, the time-share
22instruments shall include the subject matter set forth in subdivision
23(a). The time-share instruments shall be in compliance with the
24applicable laws of the state or jurisdiction in which the time-share
25property or component site is located, and if a conflict exists
26between laws of the situs state and the requirements set forth in
27this section, the law of the situs state shall control. If the time-share
28instruments provide for the matters contained in subdivision (a),
29the time-share instruments shall be deemed to be in compliance
30with the requirements of subdivision (a), and the developer shall
31not be required to make revisions in order to comply with
32subdivision (a) and this subdivision.
33(d) This section shall become operative on July 1, 2018.
Article 6 (commencing with Section 1086) is added
35to Chapter 1 of Title 4 of Part 4 of Division 2 of the Civil Code,
36to read:
(a) For the purposes of this article, the definitions in
5Chapter 1 (commencing with Section 10000) of Part 1 of Division
64 of the Business and Professions Code shall apply.
(a) A multiple listing service (MLS) is a facility of
8cooperation of real estate brokers and appraisers, operating through
9an intermediary that does not itself act as a real estate licensee or
10appraiser, through which real estate brokers establish express or
11implied contracts for compensation between real estate brokers
12that are MLS participants in accordance with its MLS rules with
13respect to listed properties, or that may be used by real estate
14licensees and appraisers, pursuant to the rules of the service, to
15prepare market evaluations and appraisals of real property.
A listing may not be placed in a multiple listing service
17unless authorized or directed by the owner in the listing.
18If a real estate licensee or appraiser places a listing or other
19information in the multiple listing service, that real estate licensee
20or appraiser shall be responsible for the truth of all representations
21and statements made by the real estate licensee or appraiser of
22which that real estate licensee or appraiser had knowledge or
23reasonably should have had knowledge to anyone injured by their
24falseness or inaccuracy.
Subject to the limitations, conditions, and requirements
26of Chapter 18 (commencing with Section 10000) of Part 5 of
27Division 7 of the Probate Code, this article applies to real property
28defined in Section 1086 that is covered by a contract described in
29Section 10150 of the Probate Code.
Nothing in this article shall preclude a listing licensee
31from also being the buyer’s licensee.
This article shall become operative on July 1, 2018.
Section 1090.2 is added to the Civil Code, to read:
This article shall repeal on July 1, 2018.
Section 1102 of the Civil Code is amended to read:
(a) Except as provided in Section 1102.2, this article
37applies to any transfer by sale, exchange, installment land sale
38contract, as defined in Section 2985, lease with an option to
39purchase, any other option to purchase, or ground lease coupled
40with improvements, of real property or residential stock
P112 1cooperative, improved with or consisting of not less than one nor
2more than four dwelling units.
3(b) Except as provided in Section 1102.2, this article shall apply
4to a resale transaction entered into on or after January 1, 2000, for
5a manufactured home, as defined in Section 18007 of the Health
6and Safety Code, or a mobilehome, as defined in Section 18008
7of the Health and Safety Code, which manufactured home or
8mobilehome
is classified as personal property and intended for
9use as a residence.
10(c) Any waiver of the requirements of this article is void as
11against public policy.
12(d) This section shall repeal on July 1, 2018.
Section 1102 is added to the Civil Code, to read:
(a) Except as provided in Section 1102.2, this article
15applies to any sales of residential property.
16(b) For the purposes of this article, the definitions in Chapter 1
17(commencing with Section 10000) of Part 1 of Division 4 of the
18Business and Professions Code shall apply.
19(c) Any waiver of the requirements of this article is void as
20against public policy.
21(d) This section shall become operative on July 1, 2018.
Section 1102.1 of the Civil Code is amended to
23read:
(a) In enacting Chapter 817 of the Statutes of 1994,
25it was the intent of the Legislature to clarify and facilitate the use
26of the real estate disclosure statement, as specified in Section
271102.6. The Legislature intended the statement to be used by
28transferors making disclosures required under this article and by
29agents making disclosures required by Section 2079 on the agent’s
30portion of the real estate disclosure statement, in transfers subject
31to this article. In transfers not subject to this article, agents may
32make required disclosures in a separate writing. The Legislature
33did not intend to affect the existing obligations of the parties to a
34real estate contract, or their agents, to disclose any fact materially
35affecting the value and desirability of the property, including,
but
36not limited to, the physical conditions of the property and
37previously received reports of physical inspections noted on the
38disclosure form set forth in Section 1102.6 or 1102.6a, and that
39nothing in this article shall be construed to change the duty of a
40real estate broker or salesperson pursuant to Section 2079.
P113 1It is also the intent of the Legislature that the delivery of a real
2estate transfer disclosure statement may not be waived in an “as
3is” sale, as held in Loughrin v. Superior Court (1993) 15 Cal. App.
44th 1188.
5(b) In enacting Chapter 677 of the Statutes of 1996, it was the
6intent of the Legislature to clarify and facilitate the use of the
7manufactured home and mobilehome transfer disclosure statement
8applicable to the resale of a manufactured home or mobilehome
9pursuant to subdivision (b) of Section 1102. The Legislature
10intended the statements to be used by transferors making
11
disclosures required under this article and by agents making
12disclosures required by Section 2079 on the agent’s portion of the
13disclosure statement and as required by Section 18046 of the Health
14and Safety Code on the dealer’s portion of the manufactured home
15and mobilehome transfer disclosure statement, in transfers subject
16to this article. In transfers not subject to this article, agents may
17make required disclosures in a separate writing. The Legislature
18did not intend to affect the existing obligations of the parties to a
19real estate contract, or their agents, to disclose any fact materially
20affecting the value and desirability of the property, including, but
21not limited to, the physical conditions of the property and
22previously received reports of physical inspections noted on the
23disclosure form set forth in Section 1102.6 or 1102.6a or to affect
24the existing obligations of the parties to a manufactured home or
25mobilehome purchase contract, and nothing in this article shall be
26construed to change the
duty of a real estate broker or salesperson
27pursuant to Section 2079 or the duty of a manufactured home or
28mobilehome dealer or salesperson pursuant to Section 18046 of
29the Health and Safety Code.
30It is also the intent of the Legislature that the delivery of a
31mobilehome transfer disclosure statement may not be waived in
32an “as is” sale.
33(c) It is the intent of the Legislature that manufactured home
34and mobilehome dealers and salespersons and real estate brokers
35and salespersons use the form provided pursuant to Section
361102.6d. It is also the intent of the Legislature for sellers of
37manufactured homes or mobilehomes who are neither manufactured
38home dealers or salespersons nor real estate brokers or salespersons
39to use the Manufactured Home/Mobilehome Transfer Disclosure
40Statement contained in Section 1102.6d.
P114 1(d) This section shall repeal on July 1, 2018.
Section 1102.1 is added to the Civil Code, to read:
(a) In enacting Chapter 817 of the Statutes of 1994,
4it was the intent of the Legislature to clarify and facilitate the use
5of the real estate disclosure statement, as specified in Section
61102.6. The Legislature intended the statement to be used by sellers
7making disclosures required under this article and by real estate
8 licensees making disclosures required by Section 2079 on the real
9estate licensee’s portion of the real estate disclosure statement, in
10transfers subject to this article. In transfers not subject to this
11article, real estate licensees may make required disclosures in a
12separate writing. The Legislature did not intend to affect the
13existing obligations of the parties to a real estate contract, or their
14retained real estate licensees, to disclose any known fact materially
15affecting the
value and desirability of the property, including, but
16not limited to, the physical conditions of the property and
17previously received reports of physical inspections noted on the
18disclosure form set forth in Section 1102.6 or 1102.6a, and that
19nothing in this article shall be construed to change the duty of a
20real estate broker or salesperson pursuant to Section 2079.
21It is also the intent of the Legislature that the delivery of a real
22estate transfer disclosure statement may not be waived in an “as
23is” sale, as held in Loughrin v. Superior Court (1993) 15
24Cal.App.4th 1188.
25(b) In enacting Chapter 677 of the Statutes of 1996, it was the
26intent of the Legislature to clarify and facilitate the use of the
27manufactured home and mobilehome transfer disclosure statement
28applicable to the resale of a manufactured home or mobilehome
29pursuant to subdivision (b) of Section 1102. The Legislature
30intended the
statements to be used by sellers making disclosures
31required under this article and by real estate licensees making
32disclosures required by Section 2079 on the real estate licensee’s
33portion of the disclosure statement and as required by Section
3418046 of the Health and Safety Code on the dealer’s portion of
35the manufactured home and mobilehome transfer disclosure
36statement, in transfers subject to this article. In transfers not subject
37to this article, real estate licensees may make required disclosures
38in a separate writing. The Legislature did not intend to affect the
39existing obligations of the parties to a real estate contract, or their
40real estate licensees, to disclose any fact materially affecting the
P115 1value and desirability of the property, including, but not limited
2to, the physical conditions of the property and previously received
3reports of physical inspections noted on the disclosure form set
4forth in Section 1102.6 or 1102.6a or to affect the existing
5obligations of the parties to a manufactured
home or mobilehome
6purchase contract, and nothing in this article shall be construed to
7change the duty of a real estate broker or salesperson pursuant to
8Section 2079 or the duty of a manufactured home or mobilehome
9dealer or salesperson pursuant to Section 18046 of the Health and
10Safety Code.
11It is also the intent of the Legislature that the delivery of a
12mobilehome transfer disclosure statement may not be waived in
13an “as is” sale.
14(c) It is the intent of the Legislature that manufactured home
15and mobilehome dealers and salespersons and real estate brokers
16and salespersons use the form provided pursuant to Section
171102.6d. It is also the intent of the Legislature for sellers of
18manufactured homes or mobilehomes who are neither manufactured
19home dealers or salespersons nor real estate brokers or salespersons
20to use the Manufactured Home/Mobilehome Transfer Disclosure
21Statement contained in Section
1102.6d.
22(d) This section shall become operative on July 1, 2018.
Section 1102.2 of the Civil Code is amended to
24read:
This article does not apply to the following:
26(a) Transfers which are required to be preceded by the furnishing
27to a prospective transferee of a copy of a public report pursuant to
28Section 11018.1 of the Business and Professions Code and transfers
29which can be made without a public report pursuant to Section
3011010.4 of the Business and Professions Code.
31(b) Transfers pursuant to court order, including, but not limited
32to, transfers ordered by a probate court in the administration of an
33estate, transfers pursuant to a writ of execution, transfers by any
34foreclosure sale, transfers by a trustee in bankruptcy, transfers by
35eminent domain, and transfers resulting from a decree for
specific
36performance.
37(c) Transfers to a mortgagee by a mortgagor or successor in
38interest who is in default, transfers to a beneficiary of a deed of
39trust by a trustor or successor in interest who is in default, transfers
40by any foreclosure sale after default, transfers by any foreclosure
P116 1sale after default in an obligation secured by a mortgage, transfers
2by a sale under a power of sale or any foreclosure sale under a
3decree of foreclosure after default in an obligation secured by a
4deed of trust or secured by any other instrument containing a power
5of sale, transfers by a mortgagee or a beneficiary under a deed of
6trust who has acquired the real property at a sale conducted
7pursuant to a power of sale under a mortgage or deed of trust or a
8sale pursuant to a decree of foreclosure or has acquired the real
9property by a deed in lieu of foreclosure, transfers to the legal
10owner or lienholder of a manufactured home or mobilehome by a
11registered
owner or successor in interest who is in default, or
12transfers by reason of any foreclosure of a security interest in a
13manufactured home or mobilehome.
14(d) Transfers by a fiduciary in the course of the administration
15of a decedent’s estate, guardianship, conservatorship, or trust. This
16exemption shall not apply to a transfer if the trustee is a natural
17person who is sole trustee of a revocable trust and he or she is a
18former owner of the property or an occupant in possession of the
19property within the preceding year.
20(e) Transfers from one coowner to one or more other coowners.
21(f) Transfers made to a spouse, or to a person or persons in the
22lineal line of consanguinity of one or more of the transferors.
23(g) Transfers between spouses resulting from a
judgment of
24dissolution of marriage or of legal separation or from a property
25settlement agreement incidental to that judgment.
26(h) Transfers by the Controller in the course of administering
27Chapter 7 (commencing with Section 1500) of Title 10 of Part 3
28of the Code of Civil Procedure.
29(i) Transfers under Chapter 7 (commencing with Section 3691)
30or Chapter 8 (commencing with Section 3771) of Part 6 of Division
311 of the Revenue and Taxation Code.
32(j) Transfers or exchanges to or from any governmental entity.
33This section shall repeal on July 1, 2018.
Section 1102.2 is added to the Civil Code, to read:
This article does not apply to the following:
36(a) Sales which are required to be preceded by the furnishing
37to a prospective buyer of a copy of a public report pursuant to
38Section 11018.1 of the Business and Professions Code and transfers
39that can be made without a public report pursuant to Section
4011010.4 of the Business and Professions Code.
P117 1(b) Sales pursuant to court order, including, but not limited to,
2sales ordered by a probate court in the administration of an estate,
3sales pursuant to a writ of execution, transfers by any foreclosure
4sale, sales by a trustee in bankruptcy, sales by eminent domain,
5and sales resulting from a decree for specific performance.
6(c) Sales to a mortgagee by a mortgagor or successor in interest
7who is in default, sales to a beneficiary of a deed of trust by a
8trustor or successor in interest who is in default, sales by any
9foreclosure sale after default, sales by any foreclosure sale after
10default in an obligation secured by a mortgage, a sale under a
11power of sale or any foreclosure sale under a decree of foreclosure
12after default in an obligation secured by a deed of trust or secured
13by any other instrument containing a power of sale, sales by a
14mortgagee or a beneficiary under a deed of trust who has acquired
15the real property at a sale conducted pursuant to a power of sale
16under a mortgage or deed of trust or a sale pursuant to a decree of
17foreclosure or has acquired the real property by a deed in lieu of
18foreclosure, sales to the legal owner or lienholder of a manufactured
19home or mobilehome by a registered owner or successor in interest
20who is in default, or sales by
reason of any foreclosure of a security
21interest in a manufactured home or mobilehome.
22(d) Sales by a fiduciary in the course of the administration of a
23trust, guardianship, conservatorship, or decedent’s estate. This
24exemption shall not apply to a transfer if the trustee is a natural
25person who is sole trustee of a revocable trust and he or she is a
26former owner of the property or an occupant in possession of the
27property within the preceding year.
28(e) Sales from one coowner to one or more other coowners.
29(f) Sales made to a spouse, or to a person or persons in the lineal
30line of consanguinity of one or more of the sellers.
31(g) Sales between spouses resulting from a judgment of
32dissolution of marriage or of legal separation or from a property
33
settlement agreement incidental to that judgment.
34(h) Sales by the Controller in the course of administering
35Chapter 7 (commencing with Section 1500) of Title 10 of Part 3
36of the Code of Civil Procedure.
37(i) Sales under Chapter 7 (commencing with Section 3691) or
38Chapter 8 (commencing with Section 3771) of Part 6 of Division
391 of the Revenue and Taxation Code.
40(j) Transfers or exchanges to or from any governmental entity.
P118 1(k) With regard to transfers of multiuse properties, the transfer
2of any portion of the property not constituting residential property
3with one-to-four dwelling units.
4This section shall become operative on July 1, 2018.
Section 1102.3 of the Civil Code is amended to
6read:
The transferor of any real property subject to this article
8shall deliver to the prospective transferee the written statement
9required by this article, as follows:
10(a) In the case of a sale, as soon as practicable before transfer
11of title.
12(b) In the case of transfer by a real property sales contract, as
13defined in Section 2985, or by a lease together with an option to
14purchase, or a ground lease coupled with improvements, as soon
15as practicable before execution of the contract. For the purpose of
16this subdivision, “execution” means the making or acceptance of
17an offer.
18With respect to any transfer subject to subdivision (a) or (b), the
19
transferor shall indicate compliance with this article either on the
20receipt for deposit, the real property sales contract, the lease, or
21any addendum attached thereto or on a separate document.
22If any disclosure, or any material amendment of any disclosure,
23required to be made by this article, is delivered after the execution
24of an offer to purchase, the transferee shall have three days after
25delivery in person or five days after delivery by deposit in the mail,
26to terminate his or her offer by delivery of a written notice of
27termination to the transferor or the transferor’s agent.
28This section shall repeal on July 1, 2018.
Section 1102.3 is added to the Civil Code, to read:
The seller of any real property subject to this article
31shall deliver to the prospective buyer the written statement required
32by this article, as follows:
33(a) In the case of a sale, as soon as practicable before transfer
34of title.
35(b) In the case of sale by a real property sales contract, as defined
36in Section 2985, or by a lease together with an option to purchase,
37or a ground lease coupled with improvements, as soon as
38practicable before execution of the contract. For the purpose of
39this subdivision, “execution” means the making or acceptance of
40an offer.
P119 1(c) With respect to any sale subject to subdivision (a) or (b), the
2seller
shall indicate compliance with this article on the real property
3sales contract, the lease, or any addendum attached thereto or on
4a separate document.
5If any disclosure, or any material amendment of any disclosure,
6required to be made by this article, is delivered after the execution
7of an offer to purchase, the prospective buyer shall have three days
8after delivery in person or five days after delivery by deposit in
9the mail, to terminate his or her offer by delivery of a written notice
10of termination to the seller or the seller’s licensee. The disclosure
11is complete when sections I, II, and III in the form described in
12Section 1102.6 are completed and delivered. A real estate licensee
13may complete his or her portion of the required disclosure by using
14a comparable form that includes all of the information on the
15licensee's inspection disclosure set forth in Section 1102.6.
16This section shall become operative on July 1, 2018.
Section 1102.4 of the Civil Code is amended to
18read:
(a) Neither the transferor nor any listing or selling
20agent shall be liable for any error, inaccuracy, or omission of any
21information delivered pursuant to this article if the error,
22inaccuracy, or omission was not within the personal knowledge
23of the transferor or that listing or selling agent, was based on
24information timely provided by public agencies or by other persons
25providing information as specified in subdivision (c) that is
26required to be disclosed pursuant to this article, and ordinary care
27was exercised in obtaining and transmitting it.
28(b) The delivery of any information required to be disclosed by
29this article to a prospective transferee by a public agency or other
30person providing information required to
be disclosed pursuant to
31this article shall be deemed to comply with the requirements of
32this article and shall relieve the transferor or any listing or selling
33agent of any further duty under this article with respect to that item
34of information.
35(c) The delivery of a report or opinion prepared by a licensed
36engineer, land surveyor, geologist, structural pest control operator,
37contractor, or other expert, dealing with matters within the scope
38of the professional’s license or expertise, shall be sufficient
39compliance for application of the exemption provided by
40subdivision (a) if the information is provided to the prospective
P120 1transferee pursuant to a request therefor, whether written or oral.
2In responding to such a request, an expert may indicate, in writing,
3an understanding that the information provided will be used in
4fulfilling the requirements of Section 1102.6 and, if so, shall
5indicate the required disclosures, or parts thereof, to
which the
6information being furnished is applicable. Where such a statement
7is furnished, the expert shall not be responsible for any items of
8information, or parts thereof, other than those expressly set forth
9in the statement.
10(d) This section shall repeal on July 1, 2018.
Section 1102.4 is added to the Civil Code, to read:
(a) Neither the seller nor any listing or buyer’s licensee
13shall be liable for any error, inaccuracy, or omission of any
14information delivered pursuant to this article if the error,
15inaccuracy, or omission was not within the personal knowledge
16of the seller or that listing or buyer’s licensee, was based on
17information timely provided by public agencies or by other persons
18providing information as specified in subdivision (c) that is
19required to be disclosed pursuant to this article, and ordinary care
20was exercised in obtaining and transmitting it.
21(b) The delivery of any information required to be disclosed by
22this article to a prospective buyer by a public agency or other
23person providing information required to be disclosed pursuant to
24
this article shall be deemed to comply with the requirements of
25this article and shall relieve the seller or any listing or buyer’s
26licensee of any further duty under this article with respect to that
27item of information.
28(c) The delivery of a report or opinion prepared by a licensed
29engineer, land surveyor, geologist, structural pest control operator,
30contractor, or other expert, dealing with matters within the scope
31of the professional’s license or expertise, shall be sufficient
32compliance for application of the exemption provided by
33subdivision (a) if the information is provided to the prospective
34buyer pursuant to a request therefor, whether written or oral.
35(d) This section shall become operative on July 1, 2018.
Section 1102.5 of the Civil Code is amended to
37read:
(a) If information disclosed in accordance with this
39article is subsequently rendered inaccurate as a result of any act,
40occurrence, or agreement subsequent to the delivery of the required
P121 1disclosures, the inaccuracy resulting therefrom does not constitute
2a violation of this article. If at the time the disclosures are required
3to be made, an item of information required to be disclosed is
4unknown or not available to the transferor, and the transferor or
5his or her agent has made a reasonable effort to ascertain it, the
6transferor may use an approximation of the
information, provided
7the approximation is clearly identified as such, is reasonable, is
8based on the best information available to the transferor or his or
9her agent, and is not used for the purpose of circumventing or
10evading this article.
11(b) This section shall repeal on July 1, 2018.
Section 1102.5 is added to the Civil Code, to read:
(a) If information disclosed in accordance with this
14article is subsequently rendered inaccurate as a result of any act,
15occurrence, or agreement subsequent to the delivery of the required
16disclosures, any inaccuracy resulting therefrom does not constitute
17a violation of this article. If at the time the disclosures are required
18to be made, an item of information required to be disclosed is
19unknown or not available to the seller, and the seller or his or her
20real estate licensee has made a reasonable effort to ascertain it, the
21seller may use an approximation of the information, provided the
22approximation is clearly identified as such, is reasonable, is based
23on the best information reasonably available to the seller or his or
24her real estate licensee, and is not used for the purpose of
25circumventing or
evading this article.
26(b) This section shall become operative on July 1, 2018.
Section 1102.6a of the Civil Code is amended to
28read:
(a) On and after July 1, 1990, any city or county may
30elect to require disclosures on the form set forth in subdivision (b)
31in addition to those disclosures required by Section 1102.6.
32However, this section does not affect or limit the authority of a
33city or county to require disclosures on a different disclosure form
34in connection with transactions subject to this article pursuant to
35an ordinance adopted prior to July 1, 1990. An ordinance like this
36adopted prior to July 1, 1990, may be amended thereafter to revise
37the disclosure requirements of the ordinance, in the discretion of
38the city council or county board of supervisors.
P122 1(b) Disclosures required pursuant to this section pertaining to
2the property proposed to be transferred, shall be set forth in, and
3
shall be made on a copy of, the following disclosure form:
[1 page]
P124 1(c) This section does not preclude the use of addenda to the
2form specified in subdivision (b) to facilitate the required
3disclosures. This section does not preclude a city or county from
4using the disclosure form specified in subdivision (b) for a purpose
5other than that specified in this section.
6(d) (1) On and after January 1, 2005, if a city or county adopts
7a different or additional disclosure form pursuant to this section
8regarding the proximity or effects of an airport, the statement in
9that form shall contain, at a minimum, the information in the
10statement “Notice of Airport in Vicinity” found in Section 11010
11of the Business and Professions Code, or Section 1103.4 or 4255.
12(2) On and after January 1,
2006, if a city or county does not
13adopt a different or additional disclosure form pursuant to this
14section, then the provision of an “airport influence area” disclosure
15pursuant to Section 11010 of the Business and Professions Code,
16or Section 1103.4 or 4255, or if there is not a current airport
17influence map, a written disclosure of an airport within two statute
18miles, shall be deemed to satisfy any city or county requirements
19for the disclosure of airports in connection with transfers of real
20property.
21(e) This section shall repeal on July 1, 2018.
Section 1102.6a is added to the Civil Code, to read:
(a) Any city or county may elect to require disclosures
24on the form set forth in subdivision (b) in addition to those
25disclosures required by Section 1102.6. However, this section does
26not affect or limit the authority of a city or county to require
27disclosures on a different disclosure form in connection with
28transactions subject to this article pursuant to an ordinance adopted
29prior to July 1, 1990.
30(b) Disclosures required pursuant to this section pertaining to
31the property proposed to be sold, shall be set forth in, and shall be
32made on a copy of, the following disclosure form:
[1 page]
P126 1(c) This section does not preclude the use of addenda to the
2form
specified in subdivision (b) to facilitate the required
3disclosures. This section does not preclude a city or county from
4using the disclosure form specified in subdivision (b) for a purpose
5other than that specified in this section.
6(d) (1) On and after January 1, 2005, if a city or county adopts
7a different or additional disclosure form pursuant to this section
8regarding the proximity or effects of an airport, the statement in
9that form shall contain, at a minimum, the information in the
10statement “Notice of Airport in Vicinity” found in Section 11010
11of the Business and Professions Code, or Section 1103.4 or 4255.
12(2) On and after January 1, 2006, if a city or county does not
13adopt a different or additional disclosure form pursuant to this
14section, then the provision of an “airport influence area” disclosure
15pursuant to Section 11010 of the Business and
Professions Code,
16or Section 1103.4 or 4255, or if there is not a current airport
17influence map, a written disclosure of an airport within two statute
18miles, shall be deemed to satisfy any city or county requirements
19for the disclosure of airports in connection with sales of real
20property.
21(e) This section shall become operative on July 1, 2018.
Section 1102.6b of the Civil Code is amended to
23read:
(a) This section applies to all transfers of real property
25for which all of the following apply:
26(1) The transfer is subject to this article.
27(2) The property being transferred is subject to a continuing lien
28securing the levy of special taxes pursuant to the Mello-Roos
29Community Facilities Act (Chapter 2.5 (commencing with Section
3053311) of Part 1 of Division 2 of Title 5 of the Government Code),
31to a fixed lien assessment collected in installments to secure bonds
32issued pursuant to the Improvement Bond Act of 1915 (Division
3310 (commencing with Section 8500) of the Streets and Highways
34Code), or to a contractual assessment program authorized pursuant
35to Chapter 29 (commencing with Section
5898.10) of Part 3 of
36Division 7 of the Streets and Highway Code.
37(3) A notice is not required pursuant to Section 53341.5 of the
38Government Code.
39(b) In addition to any other disclosure required pursuant to this
40article, the seller of any real property subject to this section shall
P127 1make a good faith effort to obtain a disclosure notice concerning
2the special tax as provided for in Section 53340.2 of the
3Government Code, or a disclosure notice concerning an assessment
4installment as provided in Section 53754 of the Government Code,
5from each local agency that levies a special tax pursuant to the
6Mello-Roos Community Facilities Act, or that collects assessment
7installments to secure bonds issued pursuant to the Improvement
8Bond Act of 1915 (Division 10 (commencing with Section 8500)
9of the Streets and Highways Code), or a disclosure notice
10concerning the contractual assessment as
provided in Section
115898.24 of the Streets and Highways Code, on the property being
12transferred, and shall deliver that notice or those notices to the
13prospective purchaser, as long as the notices are made available
14by the local agency.
15(c) (1) The seller of real property subject to this section may
16satisfy the disclosure notice requirements in regard to the bonds
17issued pursuant to the Improvement Bond Act of 1915 (Division
1810 (commencing with Section 8500) of the Streets and Highways
19Code) by delivering a disclosure notice that is substantially
20equivalent and obtained from another source, until December 31,
212004.
22(2) The seller of real property subject to this section may satisfy
23the disclosure notice requirements in regard to the assessments
24collected under the contractual assessment program authorized
25pursuant to Chapter 29 (commencing with Section
5898.10) of
26Part 3 of Division 7 of the Streets and Highway Code by delivering
27a disclosure notice that is substantially equivalent and obtained
28from another source.
29(3) For the purposes of this section, a substantially equivalent
30disclosure notice includes, but is not limited to, a copy of the most
31recent year’s property tax bill or an itemization of current
32assessment amounts applicable to the property.
33(d) (1) Notwithstanding subdivision (c), at any time after the
34effective date of this section, the seller of real property subject to
35this section may satisfy the disclosure notice requirements of this
36section by delivering a disclosure notice obtained from a
37nongovernmental source that satisfies the requirements of
38paragraph (2).
39(2) A notice provided by a private entity other than a
designated
40office, department, or bureau of the levying entity may be modified
P128 1as needed to clearly and accurately describe a special tax pursuant
2to the Mello-Roos Community Facilities Act levied against the
3property or to clearly and accurately consolidate information about
4two or more districts that levy or are authorized to levy a special
5tax pursuant to the Mello-Roos Community Facilities Act against
6the property, and shall include the name of the Mello-Roos entity
7levying taxes against the property, the annual tax due for the
8Mello-Roos entity for the current tax year, the maximum tax that
9may be levied against the property in any year, the percentage by
10which the maximum tax for the Mello-Roos entity may increase
11per year, and the date until the tax may be levied against the
12property for the Mello-Roos entity and a contact telephone number,
13if available, for further information about the Mello-Roos entity.
14A notice provided by a private entity other than a designated office,
15department, or bureau of
the levying entity may be modified as
16needed to clearly and accurately describe special assessments and
17bonds pursuant to the Improvement Bond Act of 1915 levied
18against the property, or to clearly and accurately consolidate
19information about two or more districts that levy or are authorized
20to levy special assessments and bonds pursuant to the Improvement
21Bond Act of 1915 against the property, and shall include the name
22of the special assessments and bonds issued pursuant to the
23Improvement Bond Act of 1915, the current annual tax on the
24property for the special assessments and bonds issued pursuant to
25the Improvement Bond Act of 1915 and a contact telephone
26number, if available, for further information about the special
27assessments and bonds issued pursuant to the Improvement Bond
28Act of 1915.
29(3) This section does not change the ability to make disclosures
30pursuant to Section 1102.4 of the Civil Code.
31(e) If a disclosure received pursuant to subdivision (b), (c), or
32(d) has been delivered to the transferee, a seller or his or her agent
33is not required to provide additional information concerning, and
34information in the disclosure shall be deemed to satisfy the
35responsibility of the seller or his or her agent to inform the
36transferee regarding the special tax or assessment installments and
37the district. Notwithstanding subdivision (b), (c), or (d), nothing
38in this section imposes a duty to discover a special tax or
39assessment installments or the existence of any levying district not
40actually known to the agents.
P129 1(f) This section shall repeal on July 1, 2018.
Section 1102.6b is added to the Civil Code, to read:
(a) This section applies to all sales of real property
4for which all of the following apply:
5(1) The sale is subject to this article.
6(2) The property being sold is subject to a continuing lien
7securing the levy of special taxes pursuant to the Mello-Roos
8Community Facilities Act (Chapter 2.5 (commencing with Section
953311) of Part 1 of Division 2 of Title 5 of the Government Code),
10to a fixed lien assessment collected in installments to secure bonds
11issued pursuant to the Improvement Bond Act of 1915 (Division
1210 (commencing with Section 8500) of the Streets and Highways
13Code), or to a contractual assessment program authorized pursuant
14to Chapter 29 (commencing with Section
5898.10) of Part 3 of
15Division 7 of the Streets and Highway Code.
16(3) A notice is not required pursuant to Section 53341.5 of the
17Government Code.
18(b) In addition to any other disclosure required pursuant to this
19article, the seller of any real property subject to this section shall
20make a good faith effort to obtain a disclosure notice concerning
21the special tax as provided for in Section 53340.2 of the
22Government Code, or a disclosure notice concerning an assessment
23installment as provided in Section 53754 of the Government Code
24from each local agency that levies a special tax pursuant to the
25Mello-Roos Community Facilities Act, or that collects assessment
26installments to secure bonds issued pursuant to the Improvement
27Bond Act of 1915 (Division 10 (commencing with Section 8500)
28of the Streets and Highways Code), or a disclosure notice
29concerning the contractual assessment as
provided in Section
305898.24 of the Streets and Highways Code on the property being
31sold and shall deliver that notice or those notices to the prospective
32buyer, as long as the notices are made available by the local agency.
33(c) (1) The seller of real property subject to this section may
34satisfy the disclosure notice requirements in regard to the bonds
35issued pursuant to the Improvement Bond Act of 1915 (Division
3610 (commencing with Section 8500) of the Streets and Highways
37Code) by delivering a disclosure notice that is substantially
38equivalent and obtained from another source.
39(2) The seller of real property subject to this section may satisfy
40the disclosure notice requirements in regard to the assessments
P130 1collected under the contractual assessment program authorized
2pursuant to Chapter 29 (commencing with Section 5898.10) of
3Part 3 of Division 7 of the
Streets and Highway Code by delivering
4a disclosure notice that is substantially equivalent and obtained
5from another source.
6(3) For the purposes of this section, a substantially equivalent
7disclosure notice includes, but is not limited to, a copy of the most
8recent year’s property tax bill or an itemization of current
9assessment amounts applicable to the property.
10(d) (1) Notwithstanding subdivision (c), the seller of real
11property subject to this section may satisfy the disclosure notice
12requirements of this section by delivering a disclosure notice
13obtained from a nongovernmental source that satisfies the
14requirements of paragraph (2).
15(2) A notice provided by a private entity other than a designated
16office, department, or bureau of the levying entity may be modified
17as needed to clearly and
accurately describe a special tax pursuant
18to the Mello-Roos Community Facilities Act levied against the
19property or to clearly and accurately consolidate information about
20two or more districts that levy or are authorized to levy a special
21tax pursuant to the Mello-Roos Community Facilities Act against
22the property, and shall include the name of the Mello-Roos entity
23levying taxes against the property, the annual tax due for the
24Mello-Roos entity for the current tax year, the maximum tax that
25may be levied against the property in any year, the percentage by
26which the maximum tax for the Mello-Roos entity may increase
27per year, and the date until the tax may be levied against the
28property for the Mello-Roos entity and a contact telephone number,
29if available, for further information about the Mello-Roos entity.
30A notice provided by a private entity other than a designated office,
31department, or bureau of the levying entity may be modified as
32needed to clearly and accurately describe special assessments and
33
bonds pursuant to the Improvement Bond Act of 1915 levied
34against the property, or to clearly and accurately consolidate
35information about two or more districts that levy or are authorized
36to levy special assessments and bonds pursuant to the Improvement
37Bond Act of 1915 against the property, and shall include the name
38of the special assessments and bonds issued pursuant to the
39Improvement Bond Act of 1915, the current annual tax on the
40property for the special assessments and bonds issued pursuant to
P131 1the Improvement Bond Act of 1915, and a contact telephone
2number, if available, for further information about the special
3assessments and bonds issued pursuant to the Improvement Bond
4Act of 1915.
5(3) This section does not change the ability to make disclosures
6pursuant to Section 1102.4 of the Civil Code.
7(e) If a disclosure received pursuant to subdivision (b), (c), or
8(d) has been
delivered to the buyer, a seller or his or her real estate
9licensee is not required to provide additional information
10concerning, and information in the disclosure shall be deemed to
11satisfy the responsibility of the seller or his or her real estate
12licensee to inform the buyer regarding the special tax or assessment
13installments and the district. Notwithstanding subdivision (b), (c),
14or (d), nothing in this section imposes a duty to discover a special
15tax or assessment installments or the existence of any levying
16district not actually known to the real estate licensees.
17(f) This section shall become operative on July 1, 2018.
Section 1102.6c of the Civil Code is amended to
19read:
(a) In addition to any other disclosure required
21pursuant to this article, it shall be the sole responsibility of the
22seller of any real property subject to this article, or his or her agent,
23to deliver to the prospective purchaser a disclosure notice that
24includes both of the following:
25(1) A notice, in at least 12-point type or a contrasting color, as
26follows:
27“California property tax law requires the Assessor to revalue
28real property at the time the ownership of the property changes.
29Because of this law, you may receive one or two supplemental tax
30bills, depending on when your loan closes.
31The supplemental tax bills are not mailed to your lender. If you
32
have arranged for your property tax payments to be paid through
33an impound account, the supplemental tax bills will not be paid
34by your lender. It is your responsibility to pay these supplemental
35bills directly to the Tax Collector.
36If you have any question concerning this matter, please call your
37local Tax Collector’s Office.”
38(2) A title, in at least 14-point type or a contrasting color, that
39reads as follows: “Notice of Your ‘Supplemental’ Property Tax
40Bill.”
P132 1(b) The disclosure notice requirements of this section may be
2
satisfied by delivering a disclosure notice pursuant to Section
31102.6b that satisfies the requirements of subdivision (a).
4(c) This section shall repeal on July 1, 2018.
Section 1102.6c is added to the Civil Code, to read:
(a) In addition to any other disclosure required
7pursuant to this article, it shall be the sole responsibility of the
8seller of any real property subject to this article, or his or her real
9estate licensee, to deliver to the prospective buyer a disclosure
10notice that includes both of the following:
11(1) A notice, in at least 12-point type or a contrasting color, as
12follows:
13“California property tax law requires the Assessor to revalue
14real property at the time the ownership of the property changes.
15Because of this law, you may receive one or two supplemental tax
16bills, depending on when your loan closes.
17The supplemental tax bills are not mailed to your lender. If you
18have
arranged for your property tax payments to be paid through
19an impound account, the supplemental tax bills will not be paid
20by your lender. It is your responsibility to pay these supplemental
21bills directly to the tax collector.
22If you have any question concerning this matter, please call your
23local tax collector’s office.”
24(2) A title, in at least 14-point type or a contrasting color, that
25reads as follows: “Notice of Your ‘Supplemental’ Property Tax
26Bill.”
27(b) The disclosure notice requirements of this section may be
28satisfied by delivering a disclosure notice pursuant to Section
291102.6b that satisfies the requirements of subdivision (a).
30(c) This section shall become operative on July 1, 2018.
Section 1102.9 of the Civil Code is amended to
32read:
(a) Any disclosure made pursuant to this article may
34be amended in writing by the transferor or his or her agent, but the
35amendment shall be subject to Section 1102.3 or 1102.3a.
36(b) This section shall repeal on July 1, 2018.
Section 1102.9 is added to the Civil Code, to read:
(a) Any disclosure made pursuant to this article may
39be amended in writing by the seller or his or her real estate licensee,
40but the amendment shall be subject to Section 1102.3 or 1102.3a.
P133 1(b) This section shall become operative on July 1, 2018.
Section 1102.12 of the Civil Code is amended to
3read:
(a) If more than one licensed real estate broker is
5acting as an agent in a transaction subject to this article, the broker
6who has obtained the offer made by the transferee shall, except as
7otherwise provided in this article, deliver the disclosure required
8by this article to the transferee, unless the transferor has given
9other written instructions for delivery.
10(b) If a licensed real estate broker responsible for delivering the
11disclosures under this section cannot obtain the disclosure
12document required and does not have written assurance from the
13transferee that the disclosure has been received, the broker shall
14advise the transferee in writing of his or her rights to the disclosure.
15A licensed real estate broker
responsible for delivering disclosures
16under this section shall maintain a record of the action taken to
17effect compliance in accordance with Section 10148 of the
18Business and Professions Code.
19(c) This section shall repeal on July 1, 2018.
Section 1102.12 is added to the Civil Code, to read:
(a) If more than one licensed real estate broker is
22acting as a real estate licensee in a transaction subject to this article,
23the buyer’s licensee shall, except as otherwise provided in this
24article, deliver the disclosure required by this article to the buyer
25unless the seller has given other written instructions for delivery.
26If there is only one real estate licensee in a transaction subject to
27this article, that real estate licensee shall deliver the disclosure
28required by this article to the buyer. If there is no real estate
29licensee in a transaction, the seller shall deliver the disclosure
30required by this article to the buyer.
31(b) If a real estate licensee responsible for delivering the
32disclosures under this section cannot obtain
the disclosure
33document required and does not have written assurance from the
34buyer that the disclosure has been received, the real estate licensee
35shall advise the buyer in writing of his or her rights to the
36disclosure. A real estate licensee responsible for delivering
37disclosures under this section shall maintain a record of the action
38taken to effect compliance in accordance with Section 10148 of
39the Business and Professions Code.
40(c) This section shall become operative on July 1, 2018.
Section 1102.14 of the Civil Code is amended to
2read:
(a) As used in this article, “listing agent” means
4listing agent as defined in subdivision (f) of Section 1086.
5(b) As used in this article, “selling agent” means selling agent
6as defined in subdivision (g) of Section 1086, exclusive of the
7requirement that the agent be a participant in a multiple listing
8service as defined in Section 1087.
9(c) This section shall repeal on July 1, 2018.
Section 1102.155 of the Civil Code is amended to
11read:
(a) (1) The seller of residential real property subject
13to this article shall disclose, in writing, that Section 1101.4 of the
14Civil Code requires that California single-family residences be
15equipped with water-conserving plumbing fixtures on or before
16January 1, 2017, and shall disclose whether the property includes
17any noncompliant plumbing fixtures.
18(2) The seller shall affirm that this representation is that of the
19seller and not a representation of any agent, and that this disclosure
20is not intended to be part of any contract between the buyer and
21the seller. The seller shall further affirm that this disclosure is not
22a warranty of any kind by the seller or any agent representing any
23principal in the transaction and is not a
substitute for any
24inspections that or warranties any principal may wish to obtain.
25(b) This section shall become operative on January 1, 2017.
26(c) This section shall repeal on July 1, 2018.
Section 1102.155 is added to the Civil Code, to read:
(a) (1) The seller of residential property subject to
29this article shall disclose, in writing, that Section 1101.4 requires
30that California single-family residences be equipped with
31water-conserving plumbing fixtures on or before January 1, 2017,
32and shall disclose whether the property includes any noncompliant
33plumbing fixtures as defined in subdivision (c) of Section 1101.3.
34(2) The seller shall affirm that this representation is that of the
35seller and not a representation of any real estate licensee and that
36this disclosure is not intended to be part of any contract between
37the buyer and the seller. The seller shall further affirm that this
38disclosure is not a warranty of any kind by the seller or any real
39estate
licensee representing any principal in the transaction and is
P135 1not a substitute for any inspections or warranties that any principal
2may wish to obtain.
3(b) This section shall become operative on July 1, 2018.
Section 1103 of the Civil Code is amended to read:
(a) Except as provided in Section 1103.1, this article
6applies to the transfer by sale, exchange, installment land sale
7contract, as defined in Section 2985, lease with an option to
8purchase, any other option to purchase, or ground lease coupled
9with improvements, of any real property described in subdivision
10(c), or residential stock cooperative, improved with or consisting
11of not less than one nor more than four dwelling units.
12(b) Except as provided in Section 1103.1, this article shall apply
13to a resale transaction entered into on or after January 1, 2000, for
14a manufactured home, as defined in Section 18007 of the Health
15and Safety Code, that is classified as personal property intended
16for use as a residence, or a
mobilehome, as defined in Section
1718008 of the Health and Safety Code, that is classified as personal
18property intended for use as a residence, if the real property on
19which the manufactured home or mobilehome is located is real
20property described in subdivision (c).
21(c) This article shall apply to the transactions described in
22subdivisions (a) and (b) only if the transferor or his or her agent
23is required by one or more of the following to disclose the
24property’s location within a hazard zone:
25(1) A person who is acting as an agent for a transferor of real
26property that is located within a special flood hazard area (any
27type Zone “A” or “V”) designated by the Federal Emergency
28Management Agency, or the transferor if he or she is acting without
29an agent, shall disclose to any prospective transferee the fact that
30the property is located within a special flood hazard area if
either:
31(A) The transferor, or the transferor’s agent, has actual
32knowledge that the property is within a special flood hazard area.
33(B) The local jurisdiction has compiled a list, by parcel, of
34properties that are within the special flood hazard area and a notice
35has been posted at the offices of the county recorder, county
36assessor, and county planning agency that identifies the location
37of the parcel list.
38(2) A person who is acting as an agent for a transferor of real
39property that is located within an area of potential flooding
40designated pursuant to Section 8589.5 of the Government Code,
P136 1or the transferor if he or she is acting without an agent, shall
2disclose to any prospective transferee the fact that the property is
3located within an area of potential flooding if either:
4(A) The transferor, or the transferor’s agent, has actual
5knowledge that the property is within an inundation area.
6(B) The local jurisdiction has compiled a list, by parcel, of
7properties that are within the inundation area and a notice has been
8posted at the offices of the county recorder, county assessor, and
9county planning agency that identifies the location of the parcel
10list.
11(3) A transferor of real property that is located within a very
12high fire hazard severity zone, designated pursuant to Section
1351178 of the Government Code, shall disclose to any prospective
14transferee the fact that the property is located within a very high
15fire hazard severity zone and is subject to the requirements of
16Section 51182 of the Government Code if either:
17(A) The
transferor, or the transferor’s agent, has actual
18knowledge that the property is within a very high fire hazard
19severity zone.
20(B) A map that includes the property has been provided to the
21local agency pursuant to Section 51178 of the Government Code
22and a notice has been posted at the offices of the county recorder,
23county assessor, and county planning agency that identifies the
24location of the map and any information regarding changes to the
25map received by the local agency.
26(4) A person who is acting as an agent for a transferor of real
27property that is located within an earthquake fault zone, designated
28pursuant to Section 2622 of the Public Resources Code, or the
29transferor if he or she is acting without an agent, shall disclose to
30any prospective transferee the fact that the property is located
31within a delineated earthquake fault zone if either:
32(A) The transferor, or the transferor’s agent, has actual
33knowledge that the property is within a delineated earthquake fault
34zone.
35(B) A map that includes the property has been provided to the
36city or county pursuant to Section 2622 of the Public Resources
37Code and a notice has been posted at the offices of the county
38recorder, county assessor, and county planning agency that
39identifies the location of the map and any information regarding
40changes to the map received by the county.
P137 1(5) A person who is acting as an agent for a transferor of real
2property that is located within a seismic hazard zone, designated
3pursuant to Section 2696 of the Public Resources Code, or the
4transferor if he or she is acting without an agent, shall disclose to
5any prospective transferee the fact that the property is located
6within a seismic
hazard zone if either:
7(A) The transferor, or the transferor’s agent, has actual
8knowledge that the property is within a seismic hazard zone.
9(B) A map that includes the property has been provided to the
10city or county pursuant to Section 2696 of the Public Resources
11Code and a notice has been posted at the offices of the county
12recorder, county assessor, and county planning agency that
13identifies the location of the map and any information regarding
14changes to the map received by the county.
15(6) A transferor of real property that is located within a state
16responsibility area determined by the board, pursuant to Section
174125 of the Public Resources Code, shall disclose to any
18prospective transferee the fact that the property is located within
19a wildland area that may contain substantial forest fire risks and
20hazards
and is subject to the requirements of Section 4291 if either:
21(A) The transferor, or the transferor’s agent, has actual
22knowledge that the property is within a wildland fire zone.
23(B) A map that includes the property has been provided to the
24city or county pursuant to Section 4125 of the Public Resources
25Code and a notice has been posted at the offices of the county
26recorder, county assessor, and county planning agency that
27identifies the location of the map and any information regarding
28changes to the map received by the county.
29(d) Any waiver of the requirements of this article is void as
30against public policy.
31(e) This section shall repeal on July 1, 2018.
Section 1103 is added to the Civil Code, to read:
(a) Except as provided in Section 1103.1, this article
34applies to a sale, exchange, installment land sale contract, as
35defined in Section 2985, lease with an option to purchase, any
36other option to purchase, or ground lease coupled with
37improvements, of any real property described in subdivision (c),
38or residential stock cooperative, improved with or consisting of
39not less than one nor more than four dwelling units.
P138 1(b) Except as provided in Section 1103.1, this article applies to
2a resale transaction entered into for a manufactured home, as
3defined in Section 18007 of the Health and Safety Code, that is
4classified as personal property intended for use as a residence, or
5a mobilehome, as defined in Section 18008 of the Health and Safety
6Code,
that is classified as personal property intended for use as a
7residence, if the real property on which the manufactured home
8or mobilehome is located is real property described in subdivision
9(c).
10(c) This article shall apply to the transactions described in
11subdivisions (a) and (b) only if the seller or his or her real estate
12licensee is required by one or more of the following to disclose
13the property’s location within a hazard zone:
14(1) A person who is acting as a real estate licensee for a seller
15of real property that is located within a special flood hazard area
16(any type Zone “A” or “V”) designated by the Federal Emergency
17Management Agency, or the seller if he or she is acting without a
18real estate licensee, shall disclose to any prospective buyer the fact
19that the property is located within a special flood hazard area if
20either:
21(A) The seller, or the seller’s real estate licensee, has actual
22knowledge that the property is within a special flood hazard area.
23(B) The local jurisdiction has compiled a list, by parcel, of
24properties that are within the special flood hazard area and a notice
25has been posted at the offices of the county recorder, county
26assessor, and county planning agency that identifies the location
27of the parcel list.
28(2) A person who is acting as a real estate licensee for a seller
29of real property that is located within an area of potential flooding
30designated pursuant to Section 8589.5 of the Government Code,
31or the seller if he or she is acting without a real estate licensee,
32shall disclose to any prospective buyer the fact that the property
33is located within an area of potential flooding if either:
34(A) The seller, or the seller’s real estate licensee, has actual
35knowledge that the property is within an inundation area.
36(B) The local jurisdiction has compiled a list, by parcel, of
37properties that are within the inundation area and a notice has been
38posted at the offices of the county recorder, county assessor, and
39county planning agency that identifies the location of the parcel
40list.
P139 1(3) A seller of real property that is located within a very high
2fire hazard severity zone, designated pursuant to Section 51178
3of the Government Code, shall disclose to any prospective buyer
4the fact that the property is located within a very high fire hazard
5severity zone and is subject to the requirements of Section 51182
6of the Government Code if either:
7(A) The
seller, or the seller’s real estate licensee, has actual
8knowledge that the property is within a very high fire hazard
9severity zone.
10(B) A map that includes the property has been provided to the
11local agency pursuant to Section 51178 of the Government Code
12and a notice has been posted at the offices of the county recorder,
13county assessor, and county planning agency that identifies the
14location of the map and any information regarding changes to the
15map received by the local agency.
16(4) A person who is acting as a real estate licensee for a seller
17of real property that is located within an earthquake fault zone,
18designated pursuant to Section 2622 of the Public Resources Code,
19or the seller if he or she is acting without a real estate licensee,
20shall disclose to any prospective buyer the fact that the property
21is located within a delineated earthquake fault zone if either:
22(A) The seller, or the seller’s real estate licensee, has actual
23knowledge that the property is within a delineated earthquake fault
24zone.
25(B) A map that includes the property has been provided to the
26city or county pursuant to Section 2622 of the Public Resources
27Code and a notice has been posted at the offices of the county
28recorder, county assessor, and county planning agency that
29identifies the location of the map and any information regarding
30changes to the map received by the county.
31(5) A person who is acting as a real estate licensee for a seller
32of real property that is located within a seismic hazard zone,
33designated pursuant to Section 2696 of the Public Resources Code,
34or the seller if he or she is acting without a real estate licensee,
35shall disclose to any prospective buyer the fact that the property
36is
located within a seismic hazard zone if either:
37(A) The seller, or the seller’s real estate licensee, has actual
38knowledge that the property is within a seismic hazard zone.
39(B) A map that includes the property has been provided to the
40city or county pursuant to Section 2696 of the Public Resources
P140 1Code and a notice has been posted at the offices of the county
2recorder, county assessor, and county planning agency that
3identifies the location of the map and any information regarding
4changes to the map received by the county.
5(6) A seller of real property that is located within a state
6responsibility area determined by the board, pursuant to Section
74125 of the Public Resources Code, shall disclose to any
8prospective buyer the fact that the property is located within a
9wildland area that may contain substantial forest
fire risks and
10hazards and is subject to the requirements of Section 4291 of the
11Public Resources Code if either:
12(A) The seller, or the seller’s real estate licensee, has actual
13knowledge that the property is within a wildland fire zone.
14(B) A map that includes the property has been provided to the
15city or county pursuant to Section 4125 of the Public Resources
16Code and a notice has been posted at the offices of the county
17recorder, county assessor, and county planning agency that
18identifies the location of the map and any information regarding
19changes to the map received by the county.
20(d) Any waiver of the requirements of this article is void as
21against public policy.
22(e) This section shall become operative on July 1, 2018.
Section 1103.1 of the Civil Code is amended to
24read:
(a) This article does not apply to the following
26transfers:
27(1) Transfers pursuant to court order, including, but not limited
28to, transfers ordered by a probate court in administration of an
29estate, transfers pursuant to a writ of execution, transfers by any
30foreclosure sale, transfers by a trustee in bankruptcy, transfers by
31eminent domain, and transfers resulting from a decree for specific
32performance.
33(2) Transfers to a mortgagee by a mortgagor or successor in
34interest who is in default, transfers to a beneficiary of a deed of
35trust by a trustor or successor in interest who is in default, transfers
36by any foreclosure sale after default, transfers by any
foreclosure
37sale after default in an obligation secured by a mortgage, transfers
38by a sale under a power of sale or any foreclosure sale under a
39decree of foreclosure after default in an obligation secured by a
40deed of trust or secured by any other instrument containing a power
P141 1of sale, or transfers by a mortgagee or a beneficiary under a deed
2of trust who has acquired the real property at a sale conducted
3pursuant to a power of sale under a mortgage or deed of trust or a
4sale pursuant to a decree of foreclosure or has acquired the real
5property by a deed in lieu of foreclosure.
6(3) Transfers by a fiduciary in the course of the administration
7of a decedent’s estate, guardianship, conservatorship, or trust.
8(4) Transfers from one coowner to one or more other coowners.
9(5) Transfers made to a spouse, or to a person or
persons in the
10lineal line of consanguinity of one or more of the transferors.
11(6) Transfers between spouses resulting from a judgment of
12dissolution of marriage or of legal separation of the parties or from
13a property settlement agreement incidental to that judgment.
14(7) Transfers by the Controller in the course of administering
15Chapter 7 (commencing with Section 1500) of Title 10 of Part 3
16of the Code of Civil Procedure.
17(8) Transfers under Chapter 7 (commencing with Section 3691)
18or Chapter 8 (commencing with Section 3771) of Part 6 of Division
191 of the Revenue and Taxation Code.
20(9) Transfers or exchanges to or from any governmental entity.
21(b) Transfers not subject to this article may
be subject to other
22disclosure requirements, including those under Sections 8589.3,
238589.4, and 51183.5 of the Government Code and Sections 2621.9,
242694, and 4136 of the Public Resources Code. In transfers not
25subject to this article, agents may make required disclosures in a
26separate writing.
27(c) This section shall repeal on July 1, 2018.
Section 1103.1 is added to the Civil Code, to read:
(a) This article does not apply to the following sales:
30(1) Sales pursuant to court order, including, but not limited to,
31sales ordered by a probate court in administration of an estate,
32sales pursuant to a writ of execution, sales by any foreclosure sale,
33sales by a trustee in bankruptcy, sales by eminent domain, and
34sales resulting from a decree for specific performance.
35(2) Sales to a mortgagee by a mortgagor or successor in interest
36who is in default, sales to a beneficiary of a deed of trust by a
37trustor or successor in interest who is in default, sales by any
38foreclosure sale after default, sales by any foreclosure sale after
39default in an obligation secured by a
mortgage, sale under a power
40of sale or any foreclosure sale under a decree of foreclosure after
P142 1default in an obligation secured by a deed of trust or secured by
2any other instrument containing a power of sale, or sales by a
3mortgagee or a beneficiary under a deed of trust who has acquired
4the real property at a sale conducted pursuant to a power of sale
5under a mortgage or deed of trust or a sale pursuant to a decree of
6foreclosure or has acquired the real property by a deed in lieu of
7foreclosure.
8(3) Sales by a fiduciary in the course of the administration of a
9trust, guardianship, conservatorship, or the decedent’s estate. This
10exemption shall not apply to a sale if the trustee is a natural person
11who is a trustee of a revocable trust and he or she is a former owner
12of the property or an occupant in possession of the property within
13the preceding year.
14(4) Sales from one coowner to one or more other coowners.
15(5) Sales made to a spouse, or to a person or persons in the lineal
16line of consanguinity of one or more of the sellers.
17(6) Sales between spouses resulting from a judgment of
18dissolution of marriage or of legal separation of the parties or from
19a property settlement agreement incidental to that judgment.
20(7) Sales by the Controller in the course of administering
21Chapter 7 (commencing with Section 1500) of Title 10 of Part 3
22of the Code of Civil Procedure.
23(8) Sales under Chapter 7 (commencing with Section 3691) or
24Chapter 8 (commencing with Section 3771) of Part 6 of Division
251 of the Revenue and Taxation Code.
26(9) Sales or exchanges to or from any governmental entity.
27(b) Sales not subject to this article may be subject to other
28disclosure requirements, including those under Sections 8589.3,
298589.4, and 51183.5 of the Government Code and Sections 2621.9,
302694, and 4136 of the Public Resources Code. In sales not subject
31to this article, real estate licensees may make required disclosures
32in a separate writing.
33(c) This section shall become operative on July 1, 2018.
Section 1103.1.5 is added to the Civil Code, to read:
(a) For the purposes of this article, the definitions
36in Chapter 1 (commencing with Section 10000) of Part 1 of
37Division 4 of the Business and Professions Code shall apply.
38(b) This section shall become operative on July 1, 2018.
Section 1103.2 of the Civil Code is amended to
40read:
(a) The disclosures required by this article are set forth
2in, and shall be made on a copy of, the following Natural Hazard
3Disclosure Statement:
|
NATURAL HAZARD DISCLOSURE STATEMENT |
|
|
This statement applies to the following property: |
|
|
The transferor and his or her agent(s) or a third-party consultant disclose the following information with the knowledge that even though this is not a warranty, prospective transferees may rely on this information in deciding whether and on what terms to purchase the subject property. Transferor hereby authorizes any agent(s) representing any principal(s) in this action to provide a copy of this statement to any person or entity in connection with any actual or anticipated sale of the property. |
|
|
The following are representations made by the transferor and his or her agent(s) based on their knowledge and maps drawn by the state and federal governments. This information is a disclosure and is not intended to be part of any contract between the transferee and transferor. |
|
|
THIS REAL PROPERTY LIES WITHIN THE FOLLOWING |
|
|
|
A SPECIAL FLOOD HAZARD AREA (Any type Zone “A” or “V”) designated by the Federal Emergency Management Agency. |
|
|
Yes ____ No ____ Do not know and |
|
|
AN AREA OF POTENTIAL FLOODING shown on a dam failure inundation map pursuant to Section 8589.5 of the Government Code. |
|
|
Yes ____ No ____ Do not know and |
|
|
A VERY HIGH FIRE HAZARD SEVERITY ZONE pursuant to Section 51178 or 51179 of the Government Code. The owner of this property is subject to the maintenance requirements of Section 51182 of the Government Code. |
|
|
Yes ____ No ____ |
|
|
A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISKS AND HAZARDS pursuant to Section 4125 of the Public Resources Code. The owner of this property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the state’s responsibility to provide fire protection services to any building or structure located within the wildlands unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with a local agency for those purposes pursuant to Section 4142 of the Public Resources Code. |
|
|
Yes ____ No ____ |
|
|
AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. |
|
|
Yes ____ No ____ |
|
|
A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public |
|
|
Yes (Landslide Zone)____________ Yes (Liquefaction Zone) ______ No ____ Map not yet released by state ____ |
|
THESE HAZARDS MAY LIMIT YOUR ABILITY TO DEVELOP THE REAL PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. |
|
|
THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. TRANSFEREE(S) AND TRANSFEROR(S) MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY. |
|
|
Signature of Transferor(s) |
Date |
|
Signature of Transferor(s) |
Date |
|
Agent(s) |
Date |
|
Agent(s) |
Date |
|
Check only one of the following: |
|
|
â—» Transferor(s) and their agent(s) represent that the information |
|
|
|
|
|
â—» Transferor(s) and their agent(s) acknowledge that they have |
|
|
Third-Party Disclosure Provider(s) |
Date |
|
Transferee represents that he or she has read and understands this |
|
|
Signature of Transferee(s) |
Date |
|
Signature of Transferee(s) |
Date |
P146 1(b) If an earthquake fault zone, seismic hazard zone, very high
2fire hazard severity zone, or wildland fire area map or
3accompanying information is not of sufficient accuracy or scale
4that a reasonable person can determine if the subject real property
5is included in a natural hazard area, the transferor or transferor’s
6agent shall mark “Yes” on the Natural Hazard Disclosure
7Statement. The transferor or transferor’s agent may mark “No” on
8the Natural Hazard Disclosure Statement if he or
she attaches a
9report prepared pursuant to subdivision (c) of Section 1103.4 that
10verifies the property is not in the hazard zone. Nothing in this
11subdivision is intended to limit or abridge any existing duty of the
12transferor or the transferor’s agents to exercise reasonable care in
13making a determination under this subdivision.
14(c) If the Federal Emergency Management Agency has issued
15a Letter of Map Revision confirming that a property is no longer
16within a special flood hazard area, then the transferor or transferor’s
17agent may mark “No” on the Natural Hazard Disclosure Statement,
18even if the map has not yet been updated. The transferor or
19transferor’s agent shall attach a copy of the Letter of Map Revision
20to the disclosure statement.
21(d) If the Federal Emergency Management Agency has issued
22a Letter of Map Revision confirming that a property is within a
23special flood hazard
area and the location of the letter has been
24posted pursuant to subdivision (g) of Section 8589.3 of the
25Government Code, then the transferor or transferor’s agent shall
26mark “Yes” on the Natural Hazard Disclosure Statement, even if
27the map has not yet been updated. The transferor or transferor’s
28agent shall attach a copy of the Letter of Map Revision to the
29disclosure statement.
30(e) The disclosure required pursuant to this article may be
31provided by the transferor and the transferor’s agent in the Local
32Option Real Estate Disclosure Statement described in Section
331102.6a, provided that the Local Option Real Estate Disclosure
34Statement includes substantially the same information and
35substantially the same warnings that are required by this section.
36(f) (1) The legal effect of a consultant’s report delivered to
37satisfy the exemption provided by Section 1103.4
is not changed
38when it is accompanied by a Natural Hazard Disclosure Statement.
39(2) A consultant’s report shall always be accompanied by a
40completed and signed Natural Hazard Disclosure Statement.
P147 1(3) In a disclosure statement required by this section, an agent
2and third-party provider may cause his or her name to be preprinted
3in lieu of an original signature in the portions of the form reserved
4for signatures. The use of a preprinted name shall not change the
5legal effect of the acknowledgment.
6(g) The disclosure required by this article is only a disclosure
7between the transferor, the transferor’s agents, and the transferee,
8and shall not be used by any other party, including, but not limited
9to, insurance companies, lenders, or governmental agencies, for
10any purpose.
11(h) In any transaction in which a transferor has accepted, prior
12to June 1, 1998, an offer to purchase, the transferor, or his or her
13agent, shall be deemed to have complied with the requirement of
14subdivision (a) if the transferor or agent delivers to the prospective
15transferee a statement that includes substantially the same
16information and warning as the Natural Hazard Disclosure
17Statement.
18(i) This section shall repeal on July 1, 2018.
Section 1103.2 is added to the Civil Code, to read:
(a) The disclosures required by this article are set forth
21in, and shall be made on a copy of, the following Natural Hazard
22Disclosure Statement:
|
NATURAL HAZARD DISCLOSURE STATEMENT |
|
|
This statement applies to the following property: |
|
|
The seller and his or her real estate licensee(s) or a third-party consultant disclose the following information with the knowledge that even though this is not a warranty, prospective buyers may rely on this information in deciding whether and on what terms to purchase the subject property. Seller hereby authorizes any real estate licensee(s) representing any principal(s) in this action to provide a copy of this statement to any person or entity in connection with any actual or anticipated sale of the property. |
|
|
The following are representations made by the seller and his or her real estate licensee(s) based on their knowledge and maps drawn by the state and federal governments. This information is a disclosure and is not intended to be part of any contract between the seller and buyer. |
|
|
THIS REAL PROPERTY LIES WITHIN THE FOLLOWING |
|
|
|
A SPECIAL FLOOD HAZARD AREA (Any type Zone “A” or “V”) designated by the Federal Emergency Management Agency. |
|
|
Yes ____ No ____ Do not know and |
|
|
AN AREA OF POTENTIAL FLOODING shown on a dam failure inundation map pursuant to Section 8589.5 of the Government Code. |
|
|
Yes ____ No ____ Do not know and |
|
|
A VERY HIGH FIRE HAZARD SEVERITY ZONE pursuant to Section 51178 or 51179 of the Government Code. The owner of this property is subject to the maintenance requirements of Section 51182 of the Government Code. |
|
|
Yes ____ No ____ |
|
|
A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISKS AND HAZARDS pursuant to Section 4125 of the Public Resources Code. The owner of this property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the state’s responsibility to provide fire protection services to any building or structure located within the wildlands unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with a local agency for those purposes pursuant to Section 4142 of the Public Resources Code. |
|
|
Yes ____ No ____ |
|
|
AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. |
|
|
Yes ____ No ____ |
|
|
A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public |
|
|
Yes (Landslide Zone)____________ Yes (Liquefaction Zone) ______ No ____ Map not yet released by state ____ |
|
THESE HAZARDS MAY LIMIT YOUR ABILITY TO DEVELOP THE REAL PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. |
|
|
THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. SELLER(S) AND BUYER(S) MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY. |
|
|
Signature of Seller(s) |
Date |
|
Signature of Seller(s) |
Date |
|
Seller’s Licensee(s) |
Date |
|
Seller’s Licensee(s) |
Date |
|
Check only one of the following: |
|
|
â—» Seller(s) and their real estate licensee(s) represent that the information |
|
|
|
|
|
â—» Seller(s) and their real estate licensee(s) acknowledge that they have |
|
|
Third-Party Disclosure Provider(s) |
Date |
|
Buyer represents that he or she has read and understands this |
|
|
Signature of Buyer(s) |
Date |
|
Signature of Buyer(s) |
Date |
18(b) If an earthquake fault zone, seismic hazard zone, very high
19fire hazard severity zone, or wildland fire area map or
20accompanying information is not of sufficient accuracy or scale
21that a reasonable person can determine if the subject real property
22is included in a natural hazard area, the seller or seller’s real estate
23licensee shall mark “Yes” on the Natural Hazard Disclosure
24Statement. The seller or seller’s real estate licensee may mark
25“No” on
the Natural Hazard Disclosure Statement if he or she
26attaches a report prepared pursuant to subdivision (c) of Section
271103.4 that verifies the property is not in the hazard zone. Nothing
28in this subdivision is intended to limit or abridge any existing duty
29of the seller or the seller’s real estate licensees to exercise
30reasonable care in making a determination under this subdivision.
31(c) If the Federal Emergency Management Agency has issued
32a Letter of Map Revision confirming that a property is no longer
33within a special flood hazard area, then the seller or seller’s real
34estate licensee may mark “No” on the Natural Hazard Disclosure
35Statement, even if the map has not yet been updated. The seller or
36seller’s real estate licensee shall attach a copy of the Letter of Map
37Revision to the disclosure statement.
38(d) If the Federal Emergency Management Agency has issued
39a Letter of Map
Revision confirming that a property is within a
40special flood hazard area and the location of the letter has been
P151 1posted pursuant to subdivision (g) of Section 8589.3 of the
2Government Code, then the seller or seller’s’s real estate licensee
3shall mark “Yes” on the Natural Hazard Disclosure Statement,
4even if the map has not yet been updated. The seller or seller’s
5real estate licensee shall attach a copy of the Letter of Map
6Revision to the disclosure statement.
7(e) The disclosure required pursuant to this article may be
8provided by the seller or seller’s real estate licensee in the Local
9Option Real Estate Disclosure Statement described in Section
101102.6a, provided that the Local Option Real Estate Disclosure
11Statement includes substantially the same information and
12substantially the same warnings that are required by this section.
13(f) (1) The legal effect
of a consultant’s report delivered to
14satisfy the exemption provided by Section 1103.4 is not changed
15when it is accompanied by a Natural Hazard Disclosure Statement.
16(2) A consultant’s report shall always be accompanied by a
17completed and signed Natural Hazard Disclosure Statement.
18(3) In a disclosure statement required by this section, a real
19estate licensee and third-party provider may cause his or her name
20to be preprinted in lieu of an original signature in the portions of
21the form reserved for signatures. The use of a preprinted name
22shall not change the legal effect of the acknowledgment.
23(g) The disclosure required by this article is only a disclosure
24between the seller, the seller’s real estate licensees, and the
25prospective buyer, and shall not be used by any other party,
26including, but not limited to,
insurance companies, lenders, or
27governmental agencies, for any purpose.
28(h) In any transaction in which a seller has accepted, prior to
29June 1, 1998, an offer to purchase, the seller, or his or her real
30estate licensee, shall be deemed to have complied with the
31requirement of subdivision (a) if the seller or real estate licensee
32delivers to the prospective buyer a statement that includes
33substantially the same information and warning as the Natural
34Hazard Disclosure Statement.
35(i) This section shall become operative on July 1, 2018.
Section 1103.3 of the Civil Code is amended to
37read:
(a) The transferor of any real property subject to this
39article shall deliver to the prospective transferee the written
40statement required by this article, as follows:
P152 1(1) In the case of a sale, as soon as practicable before transfer
2of title.
3(2) In the case of transfer by a real property sales contract, as
4defined in Section 2985, or by a lease together with an option to
5purchase, or a ground lease coupled with improvements, as soon
6as practicable before execution of the contract. For the purpose of
7this subdivision, “execution” means the making or acceptance of
8an offer.
9(b) The transferor
shall indicate compliance with this article
10either on the receipt for deposit, the real property sales contract,
11the lease, any addendum attached thereto, or on a separate
12document.
13(c) If any disclosure, or any material amendment of any
14disclosure, required to be made pursuant to this article is delivered
15after the execution of an offer to purchase, the transferee shall have
16three days after delivery in person or five days after delivery by
17deposit in the mail to terminate his or her offer by delivery of a
18written notice of termination to the transferor or the transferor’s
19agent.
20(d) This section shall repeal on July 1, 2018.
Section 1103.3 is added to the Civil Code, to read:
(a) The seller of any real property subject to this article
23shall deliver to the prospective buyer the written statement required
24by this article, as follows:
25(1) In the case of a sale, as soon as practicable before transfer
26of title.
27(2) In the case of sale by a real property sales contract, as defined
28in Section 2985, or by a lease together with an option to purchase,
29or a ground lease coupled with improvements, as soon as
30practicable before the prospective buyer’s execution of the contract.
31For the purpose of this subdivision, “execution” means the making
32or acceptance of an offer.
33(b) The seller shall indicate
compliance with this article on the
34real property sales contract, the lease, any addendum attached
35thereto, or on a separate document.
36(c) If any disclosure, or any material amendment of any
37disclosure, required to be made pursuant to this article is delivered
38after the execution of an offer to purchase, the prospective buyer
39shall have three days after delivery in person or five days after
40delivery by deposit in the mail to terminate his or her offer by
P153 1delivery of a written notice of termination to the seller or the
2seller’s real estate licensee.
3(d) This section shall become operative on July 1, 2018.
Section 1103.4 of the Civil Code is amended to
5read:
(a) Neither the transferor nor any listing or selling
7agent shall be liable for any error, inaccuracy, or omission of any
8information delivered pursuant to this article if the error,
9inaccuracy, or omission was not within the personal knowledge
10of the transferor or the listing or selling agent, and was based on
11information timely provided by public agencies or by other persons
12providing information as specified in subdivision (c) that is
13required to be disclosed pursuant to this article, and ordinary care
14was exercised in obtaining and transmitting the information.
15(b) The delivery of any information required to be disclosed by
16this article to a prospective transferee by a public agency or other
17person providing information required to be disclosed pursuant to
18
this article shall be deemed to comply with the requirements of
19this article and shall relieve the transferor or any listing or selling
20agent of any further duty under this article with respect to that item
21of information.
22(c) The delivery of a report or opinion prepared by a licensed
23engineer, land surveyor, geologist, or expert in natural hazard
24discovery dealing with matters within the scope of the
25professional’s license or expertise shall be sufficient compliance
26for application of the exemption provided by subdivision (a) if the
27information is provided to the prospective transferee pursuant to
28a request therefor, whether written or oral. In responding to that
29request, an expert may indicate, in writing, an understanding that
30the information provided will be used in fulfilling the requirements
31of Section 1103.2 and, if so, shall indicate the required disclosures,
32or parts thereof, to which the information being furnished is
33applicable.
Where that statement is furnished, the expert shall not
34be responsible for any items of information, or parts thereof, other
35than those expressly set forth in the statement.
36(1) In responding to the request, the expert shall determine
37whether the property is within an airport influence area as defined
38in subdivision (b) of Section 11010 of the Business and Professions
39Code. If the property is within an airport influence area, the report
40shall contain the following statement:
|
NOTICE OF AIRPORT IN VICINITY |
|
|
This property is presently located in the vicinity of an |
13(2) In responding to the request, the expert shall determine
14whether the property is within the jurisdiction of the San Francisco
15Bay Conservation and Development Commission,
as defined in
16Section 66620 of the Government Code. If the property is within
17the commission’s jurisdiction, the report shall contain the following
18notice:
19 NOTICE OF SAN FRANCISCO BAY CONSERVATION AND
20DEVELOPMENT COMMISSION JURISDICTION
21This property is located within the jurisdiction of the San
22Francisco Bay Conservation and Development Commission. Use
23and development of property within the commission’s jurisdiction
24may be subject to special regulations, restrictions, and permit
25requirements. You may wish to investigate and determine whether
26they are acceptable to you and your intended use of the property
27before you complete your transaction.
28(3) In responding to the request, the expert shall determine
29whether the property is presently located within one mile of a
30parcel of real property designated as “Prime Farmland,” “Farmland
31of Statewide Importance,” “Unique Farmland,” “Farmland of
Local
32Importance,” or “Grazing Land” on the most current “Important
33Farmland Map” issued by the California Department of
34Conservation, Division of Land Resource Protection, utilizing
35solely the county-level GIS map data, if any, available on the
36Farmland Mapping and Monitoring Program Web site. If the
37residential property is within one mile of a designated farmland
38area, the report shall contain the following notice:
39
40NOTICE OF RIGHT TO FARM
P155 1This property is located within one mile of a farm or ranch land
2designated on the current county-level GIS “Important Farmland
3Map,” issued by the California Department of Conservation,
4Division of Land Resource Protection. Accordingly, the property
5may be subject to inconveniences or discomforts resulting from
6agricultural operations that are a normal and necessary aspect of
7living in a community with a strong rural character and a healthy
8agricultural sector. Customary
agricultural practices in farm
9operations may include, but are not limited to, noise, odors, dust,
10light, insects, the operation of pumps and machinery, the storage
11and disposal of manure, bee pollination, and the ground or aerial
12application of fertilizers, pesticides, and herbicides. These
13agricultural practices may occur at any time during the 24-hour
14day. Individual sensitivities to those practices can vary from person
15to person. You may wish to consider the impacts of such
16agricultural practices before you complete your purchase. Please
17be advised that you may be barred from obtaining legal remedies
18against agricultural practices conducted in a manner consistent
19with proper and accepted customs and standards pursuant to
20Section 3482.5 of the Civil Code or any pertinent local ordinance.
21(4) In responding to the request, the expert shall determine,
22utilizing map coordinate data made available by the Office of Mine
23Reclamation, whether
the property is presently located within one
24mile of a mine operation for which map coordinate data has been
25reported to the director pursuant to Section 2207 of the Public
26Resources Code. If the expert determines, from the available map
27coordinate data, that the residential property is located within one
28mile of a mine operation, the report shall contain the following
29notice:
30
31NOTICE OF MINING OPERATIONS:
32This property is located within one mile of a mine operation for
33which the mine owner or operator has reported mine location data
34to the Department of Conservation pursuant to Section 2207 of
35the Public Resources Code. Accordingly, the property may be
36subject to inconveniences resulting from mining operations. You
37may wish to consider the impacts of these practices before you
38complete your transaction.
39(d) This section shall repeal on July 1, 2018.
Section 1103.4 is added to the Civil Code, to read:
(a) Neither the seller nor any listing licensee or buyer’s
2licensee shall be liable for any error, inaccuracy, or omission of
3any information delivered pursuant to this article if the error,
4inaccuracy, or omission was not within the personal knowledge
5of the seller or the listing licensee or buyer’s licensee, and was
6based on information timely provided by public agencies or by
7other persons providing information as specified in subdivision
8(c) that is required to be disclosed pursuant to this article, and
9ordinary care was exercised in obtaining and transmitting the
10information.
11(b) The delivery of any information required to be disclosed by
12this article to a prospective buyer by a public agency or other
13person providing information
required to be disclosed pursuant to
14this article shall be deemed to comply with the requirements of
15this article and shall relieve the seller and buyer’s licensee of any
16further duty under this article with respect to that item of
17information.
18(c) The delivery of a report or opinion prepared by a licensed
19engineer, land surveyor, geologist, or expert in natural hazard
20discovery dealing with matters within the scope of the
21professional’s license or expertise shall be sufficient compliance
22for application of the exemption provided by subdivision (a) if the
23information is provided to the prospective buyer pursuant to a
24request therefor, whether written or oral.
25(1) In responding to the request, the expert shall determine
26whether the property is within an airport influence area as defined
27in subdivision (b) of Section 11010 of the Business and Professions
28Code. If the property is
within an airport influence area, the report
29shall contain the following statement:
|
NOTICE OF AIRPORT IN VICINITY |
|
|
This property is presently located in the vicinity of an |
3(2) In responding to the request, the expert shall determine
4whether the property is within the jurisdiction of the San Francisco
5Bay Conservation and Development Commission, as defined in
6Section 66620 of the Government Code. If the property is within
7the commission’s jurisdiction, the report shall contain the following
8notice:
9 NOTICE OF SAN FRANCISCO BAY CONSERVATION AND
10DEVELOPMENT COMMISSION JURISDICTION
11This property is located within the jurisdiction of the San
12Francisco Bay Conservation and Development Commission. Use
13and development of property within the commission’s jurisdiction
14may be subject to special regulations, restrictions, and permit
15
requirements. You may wish to investigate and determine whether
16they are acceptable to you and your intended use of the property
17before you complete your transaction.
18(3) In responding to the request, the expert shall determine
19whether the property is presently located within one mile of a
20parcel of real property designated as “Prime Farmland,” “Farmland
21of Statewide Importance,” “Unique Farmland,” “Farmland of Local
22Importance,” or “Grazing Land” on the most current “Important
23Farmland Map” issued by the California Department of
24Conservation, Division of Land Resource Protection, utilizing
25solely the county-level GIS map data, if any, available on the
26Farmland Mapping and Monitoring Program Web site. If the
27residential property is within one mile of a designated farmland
28area, the report shall contain the following notice:
29
30NOTICE OF RIGHT TO FARM
31This property is located within one mile of a farm or ranch land
32designated on the current county-level GIS “Important Farmland
33Map,” issued by the California Department of Conservation,
34Division of Land Resource Protection. Accordingly, the property
35may be subject to inconveniences or discomforts resulting from
36agricultural operations that are a normal and necessary aspect of
37living in a community with a strong rural character and a healthy
38agricultural sector. Customary agricultural practices in farm
39operations may include, but are not limited to, noise, odors, dust,
40light, insects, the operation of pumps and machinery, the storage
P158 1and disposal of manure, bee pollination, and the ground or aerial
2application of fertilizers, pesticides, and herbicides. These
3agricultural practices may occur at any time during the 24-hour
4day. Individual sensitivities to those practices can vary from person
5to person. You may wish to consider the impacts of such
6agricultural practices
before you complete your purchase. Please
7be advised that you may be barred from obtaining legal remedies
8against agricultural practices conducted in a manner consistent
9with proper and accepted customs and standards pursuant to
10Section 3482.5 of the Civil Code or any pertinent local ordinance.
11(4) In responding to the request, the expert shall determine,
12utilizing map coordinate data made available by the Office of Mine
13Reclamation, whether the property is presently located within one
14mile of a mine operation for which map coordinate data has been
15reported to the director pursuant to Section 2207 of the Public
16Resources Code. If the expert determines, from the available map
17coordinate data, that the residential property is located within one
18mile of a mine operation, the report shall contain the following
19notice:
20
21NOTICE OF MINING OPERATIONS:
22This property is located within one mile of a mine operation for
23which the mine owner or operator has reported mine location data
24to the Department of Conservation pursuant to Section 2207 of
25the Public Resources Code. Accordingly, the property may be
26subject to inconveniences resulting from mining operations. You
27may wish to consider the impacts of these practices before you
28complete your transaction.
29(d) This section shall become operative on July 1, 2018.
Section 1103.5 of the Civil Code is amended to
31read:
(a) After a transferor and his or her agent comply with
33Section 1103.2, they shall be relieved of further duty under this
34article with respect to those items of information. The transferor
35and his or her agent shall not be required to provide notice to the
36transferee if the information provided subsequently becomes
37inaccurate as a result of any governmental action, map revision,
38changed information, or other act or occurrence, unless the
39transferor or agent has actual knowledge that the information has
40become inaccurate.
P159 1(b) If information disclosed in accordance with this article is
2subsequently rendered inaccurate as a result of any governmental
3action, map revision, changed information, or other act or
4occurrence
subsequent to the delivery of the required disclosures,
5the inaccuracy resulting therefrom does not constitute a violation
6of this article.
7(c) This section shall repeal on July 1, 2018.
Section 1103.5 is added to the Civil Code, to read:
(a) After a seller and his or her real estate licensee
10comply with Section 1103.2, they shall be relieved of further duty
11under this article with respect to those items of information. The
12seller and his or her real estate licensee shall not be required to
13provide notice to the prospective buyer if the information provided
14subsequently becomes inaccurate as a result of any governmental
15action, map revision, changed information, or other act or
16occurrence, unless the seller or real estate licensee has actual
17knowledge that the information has become inaccurate.
18(b) If information disclosed in accordance with this article is
19subsequently rendered inaccurate as a result of any governmental
20action, map revision, changed information, or other act
or
21occurrence subsequent to the delivery of the required disclosures,
22the inaccuracy resulting therefrom does not constitute a violation
23of this article.
24(c) This section shall become operative on July 1, 2018.
Section 1103.8 of the Civil Code is amended to
26read:
(a) The specification of items for disclosure in this
28article does not limit or abridge any obligation for disclosure
29created by any other provision of law or that may exist in order to
30avoid fraud, misrepresentation, or deceit in the transfer transaction.
31The Legislature does not intend to affect the existing obligations
32of the parties to a real estate contract, or their agents, to disclose
33any fact materially affecting the value and desirability of the
34property, including, but not limited to, the physical condition of
35the property and previously received reports of physical
inspection
36noted on the disclosure form provided pursuant to Section 1102.6
37or 1102.6a.
38(b) Nothing in this article shall be construed to change the duty
39of a real estate broker or salesperson pursuant to Section 2079.
40(c) This section shall repeal on July 1, 2018.
Section 1103.8 is added to the Civil Code, to read:
(a) The specification of items for disclosure in this
3article does not limit or abridge any obligation for disclosure
4created by any other provision of law or that may exist in order to
5avoid fraud, misrepresentation, or deceit in the sale transaction.
6The Legislature does not intend to affect the existing obligations
7of the parties to a real estate contract, or their licensees, to disclose
8any fact materially affecting the value and desirability of the
9property, including, but not limited to, the physical condition of
10the property and previously received reports of physical inspection
11noted on the disclosure form provided pursuant to Section 1102.6
12or 1102.6a.
13(b) Nothing in this article shall be construed to change the duty
14of a real
estate licensee pursuant to Section 2079.
15(c) This section shall become operative on July 1, 2018.
Section 1103.9 of the Civil Code is amended to
17read:
(a) Any disclosure made pursuant to this article may
19be amended in writing by the transferor or his or her agent, but the
20amendment shall be subject to Section 1103.3.
21(b) This section shall repeal on July 1, 2018.
Section 1103.9 is added to the Civil Code, to read:
(a) Any disclosure made pursuant to this article may
24be amended in writing by the seller or his or her real estate licensee,
25but the amendment shall be subject to Section 1103.3.
26(b) This section shall become operative on July 1, 2018.
Section 1103.12 of the Civil Code is amended to
28read:
(a) If more than one licensed real estate broker is
30acting as an agent in a transaction subject to this article, the broker
31who has obtained the offer made by the transferee shall, except as
32otherwise provided in this article, deliver the disclosure required
33by this article to the transferee, unless the transferor has given
34other written instructions for delivery.
35(b) If a licensed real estate broker responsible for delivering the
36disclosures under this section cannot obtain the disclosure
37document required and does not have written assurance from the
38transferee that the disclosure has been received, the broker shall
39advise the transferee in writing of his or her rights to the disclosure.
40A licensed real estate broker
responsible for delivering disclosures
P161 1under this section shall maintain a record of the action taken to
2effect compliance in accordance with Section 10148 of the
3Business and Professions Code.
4(c) This section shall repeal on July 1, 2018.
Section 1103.12 is added to the Civil Code, to read:
(a) If more than one real estate broker is acting in a
7transaction subject to this article, the buyer’s licensee shall, except
8as otherwise provided in this article, deliver the disclosure required
9by this article to the buyer, unless the seller has given other written
10instructions for delivery.
11(b) If a licensed real estate broker responsible for delivering the
12disclosures under this section cannot obtain the disclosure
13document required and does not have written assurance from the
14buyer that the disclosure has been received, the broker shall advise
15the buyer in writing of his or her rights to the disclosure. A licensed
16real estate broker responsible for delivering disclosures under this
17section shall maintain a record of the action taken
to effect
18compliance in accordance with Section 10148 of the Business and
19Professions Code.
20(c) This section shall become operative on July 1, 2018.
Section 1103.14 of the Civil Code is amended to
22read:
(a) As used in this article, “listing agent” means
24listing agent as defined in subdivision (f) of Section 1086.
25(b) As used in this article, “selling agent” means selling agent
26as defined in subdivision (g) of Section 1086, exclusive of the
27requirement that the agent be a participant in a multiple listing
28service as defined in Section 1087.
29(c) This section shall repeal on July 1, 2018.
Section 2079 of the Civil Code is amended to read:
(a) It is the duty of a real estate broker or salesperson,
32licensed under Division 4 (commencing with Section 10000) of
33the Business and Professions Code, to a prospective purchaser of
34residential real property comprising one to four dwelling units, or
35a manufactured home as defined in Section 18007 of the Health
36and Safety Code, to conduct a reasonably competent and diligent
37visual inspection of the property offered for sale and to disclose
38to that prospective purchaser all facts materially affecting the value
39or desirability of the property that an investigation would reveal,
40if that broker has a written contract with the seller to find or obtain
P162 1a buyer or is a broker who acts in cooperation with that broker to
2find and obtain a buyer.
3(b) It is the duty of a real estate broker or salesperson licensed
4under Division 4 (commencing with Section 10000) of the Business
5and Professions Code to comply with this section and any
6regulations imposing standards of professional conduct adopted
7pursuant to Section 10080 of the Business and Professions Code
8with reference to Sections 10176 and 10177 of the Business and
9Professions Code.
10(c) This section shall repeal on July 1, 2018.
Section 2079 is added to the Civil Code, to read:
(a) It is the duty of a real estate licensee, licensed under
13Division 4 (commencing with Section 10000) of the Business and
14Professions Code, to a prospective buyer of residential real property
15comprising one to four dwelling units, or a manufactured home as
16defined in Section 18007 of the Health and Safety Code, to conduct
17a reasonably competent and diligent visual inspection of the
18property offered for sale and to disclose to that prospective buyer
19all facts materially affecting the value or desirability of the property
20that an investigation would reveal, if that broker has a written
21contract with the seller to find or obtain a buyer or is a broker who
22acts in cooperation with that broker to find and obtain a buyer.
23(b) It is the duty of a
real estate licensee, licensed under Division
244 (commencing with Section 10000) of the Business and
25Professions Code, to comply with this section and any regulations
26imposing standards of professional conduct adopted pursuant to
27Section 10080 of the Business and Professions Code with reference
28to Sections 10176 and 10177 of the Business and Professions Code.
29(c) This section shall become operative on July 1, 2018.
Section 2079.6 of the Civil Code is amended to
31read:
(a) This article does not apply to transfers which are
33required to be preceded by the furnishing, to a prospective
34transferee, of a copy of a public report pursuant to Section 11018.1
35or Section 11234 of the Business and Professions Code and
36transfers that can be made without a public report pursuant to
37Section 11010.4 of the Business and Professions Code, unless the
38property has been previously occupied.
39(b) This section shall repeal on July 1, 2018.
Section 2079.6 is added to the Civil Code, to read:
(a) This article does not apply to sales which are
2required to be preceded by the furnishing, to a prospective buyer,
3of a copy of a public report pursuant to Section 11018.1 or Section
411234 of the Business and Professions Code and sales that can be
5made without a public report pursuant to Section 11010.4 of the
6Business and Professions Code, unless the property has been
7previously occupied.
8(b) This section shall become operative on July 1, 2018.
Section 2079.7 of the Civil Code is amended to
10read:
(a) If a consumer information booklet described in
12Section 10084.1 of the Business and Professions Code is delivered
13to a transferee in connection with the transfer of real property,
14including property specified in Section 1102 of the Civil Code, or
15manufactured housing, as defined in Section 18007 of the Health
16and Safety Code, a seller or broker is not required to provide
17additional information concerning, and the information shall be
18deemed to be adequate to inform the transferee regarding, common
19environmental hazards, as described in the booklet, that can affect
20real property.
21(b) Notwithstanding subdivision (a), nothing in this section
22either increases or decreases the duties, if any, of sellers or brokers,
23
including, but not limited to, the duties of a seller or broker under
24this article, Article 1.5 (commencing with Section 1102) of Chapter
252 of Title 4 of Part 4 of Division 2, or Section 25359.7 of the Health
26and Safety Code, or alters the duty of a seller or broker to disclose
27the existence of known environmental hazards on or affecting the
28real property.
29(c) This section shall repeal on July 1, 2018.
Section 2079.7 is added to the Civil Code, to read:
(a) If a consumer information booklet described in
32Section 10084.1 of the Business and Professions Code is delivered
33to a buyer in connection with the sale of real property, including
34property specified in Section 1102 of the Civil Code, or
35manufactured housing, as defined in Section 18007 of the Health
36and Safety Code, a seller or broker is not required to provide
37additional information concerning, and the information shall be
38deemed to be adequate to inform the buyer regarding, common
39environmental hazards, as described in the booklet, that can affect
40real property.
P164 1(b) Notwithstanding subdivision (a), nothing in this section
2either increases or decreases the duties, if any, of sellers or brokers,
3including, but not limited to, the duties
of a seller or broker under
4this article, Article 1.5 (commencing with Section 1102) of Chapter
52 of Title 4 of Part 4 of Division 2, or Section 25359.7 of the Health
6and Safety Code, or alters the duty of a seller or broker to disclose
7the existence of known environmental hazards on or affecting the
8real property.
9(c) This section shall become operative on July 1, 2018.
Section 2079.8 of the Civil Code is amended to
11read:
(a) If a Homeowner’s Guide to Earthquake Safety
13described in Section 10149 of the Business and Professions Code
14is delivered to a transferee in connection with the transfer of real
15property, including property specified in Section 1102 or under
16Chapter 7.5 (commencing with Section 2621) of Division 2 of the
17Public Resources Code, a seller or broker is not required to provide
18additional information concerning, and the information shall be
19deemed to be adequate to inform the transferee regarding, geologic
20and seismic hazards, in general, as described in the guide, that may
21affect real property and mitigating measures that the transferee or
22seller might consider.
23(b) Notwithstanding subdivision (a), nothing in this section
24
increases or decreases the duties, if any, of sellers or brokers,
25including, but not limited to, the duties of a seller or broker under
26this article, Article 1.5 (commencing with Section 1102) of Chapter
272 of Title 4 of Part 4 of Division 2, or under Chapter 7.5
28(commencing with Section 2621) of Division 2 of the Public
29Resources Code, or alters the duty of a seller or broker to disclose
30the existence of known hazards on or affecting the real property.
31(c) This section shall repeal on July 1, 2018.
Section 2079.8 is added to the Civil Code, to read:
(a) If a Homeowner’s Guide to Earthquake Safety
34described in Section 10149 of the Business and Professions Code
35is delivered to a buyer in connection with the sale of real property,
36including property specified in Section 1102 or under Chapter 7.5
37(commencing with Section 2621) of Division 2 of the Public
38Resources Code, a seller or broker is not required to provide
39additional information concerning, and the information shall be
40deemed to be adequate to inform the buyer regarding, geologic
P165 1and seismic hazards, in general, as described in the guide, that may
2affect real property and mitigating measures that the buyer or seller
3might consider.
4(b) Notwithstanding subdivision (a), nothing in this section
5increases or decreases the duties, if
any, of sellers or brokers,
6including, but not limited to, the duties of a seller or broker under
7this article, Article 1.5 (commencing with Section 1102) of Chapter
82 of Title 4 of Part 4 of Division 2, or under Chapter 7.5
9(commencing with Section 2621) of Division 2 of the Public
10Resources Code, or alters the duty of a seller or broker to disclose
11the existence of known hazards on or affecting the real property.
12(c) This section shall become operative on July 1, 2018.
Section 2079.9 of the Civil Code is amended to
14read:
(a) If a Commercial Property Owner’s Guide to
16Earthquake Safety described in Section 10147 of the Business and
17Professions Code is delivered to a transferee in connection with
18the transfer of real property, including property specified in Section
191102 or under Chapter 7.5 (commencing with Section 2621) of
20Division 2 of the Public Resources Code, a seller or broker is not
21required to provide additional information concerning, and the
22information shall be deemed to be adequate to inform the transferee
23regarding, geologic and seismic hazards, in general, as described
24in the guide, that may affect real property and mitigating measures
25that the transferee or seller might consider.
26(b) Notwithstanding subdivision (a), nothing
in this section
27increases or decreases the duties, if any, of sellers, their brokers
28or agents under this article or under Chapter 7.5 (commencing
29with Section 2621) or Chapter 7.8 (commencing with Section
302690) of Division 2 of the Public Resources Code, or alters the
31duty of a seller, agent, or broker to disclose the existence of known
32hazards on or affecting the real property.
33(c) This section shall repeal on July 1, 2018.
Section 2079.9 is added to the Civil Code, to read:
(a) If a Commercial Property Owner’s Guide to
36Earthquake Safety described in Section 10147 of the Business and
37Professions Code is delivered to a buyer in connection with the
38sale of real property, including property specified in Section 1102
39or under Chapter 7.5 (commencing with Section 2621) of Division
402 of the Public Resources Code, a seller or broker is not required
P166 1to provide additional information concerning, and the information
2shall be deemed to be adequate to inform the buyer regarding,
3geologic and seismic hazards, in general, as described in the guide,
4that may affect real property and mitigating measures that the
5buyer or seller might consider.
6(b) Notwithstanding subdivision (a), nothing in this section
7increases or decreases
the duties, if any, of sellers, their real estate
8licensees under this article or under Chapter 7.5 (commencing with
9Section 2621) or Chapter 7.8 (commencing with Section 2690) of
10Division 2 of the Public Resources Code, or alters the duty of a
11seller or real estate licensee to disclose the existence of known
12hazards on or affecting the real property.
13(c) This section shall become operative on July 1, 2018.
Section 2079.10 of the Civil Code is amended to
15read:
(a) If the informational booklet published pursuant
17to Section 25402.9 of the Public Resources Code, concerning the
18statewide home energy rating program adopted pursuant to Section
1925942 of the Public Resources Code, is delivered to a transferee
20in connection with the transfer of real property, including, but not
21limited to, property specified in Section 1102, manufactured homes
22as defined in Section 18007 of the Health and Safety Code, and
23property subject to Chapter 7.5 (commencing with Section 2621)
24of Division 2 of the Public Resources Code, the seller or broker
25is not required to provide information additional to that contained
26in the booklet concerning home energy ratings, and the information
27in the booklet shall be deemed to be adequate to inform the
28transferee about the
existence of a statewide home energy rating
29program.
30(b) Notwithstanding subdivision (a), nothing in this section
31alters any existing duty of the seller or broker under any other law
32including, but not limited to, the duties of a seller or broker under
33this article, Article 1.5 (commencing with Section 1102) of Chapter
342 of Title 4 of Part 4 of Division 2 of the Civil Code, or Chapter
357.5 (commencing with Section 2621) of Division 2 of the Public
36Resources Code, to disclose information concerning the existence
37of a home energy rating program affecting the real property.
38(c) If the informational booklet or materials described in Section
39375.5 of the Water Code concerning water conservation and water
40conservation programs are delivered to a transferee in connection
P167 1with the transfer of real property, including property described in
2subdivision (a), the seller or broker is not
required to provide
3information concerning water conservation and water conservation
4programs that is additional to that contained in the booklet or
5materials, and the information in the booklet or materials shall be
6deemed to be adequate to inform the transferee about water
7conservation and water conservation programs.
8(d) This section shall repeal on July 1, 2018.
Section 2079.10 is added to the Civil Code, to read:
(a) If the informational booklet published pursuant
11to Section 25402.9 of the Public Resources Code, concerning the
12statewide home energy rating program adopted pursuant to Section
1325942 of the Public Resources Code, is delivered to a buyer in
14connection with the sale of real property, including, but not limited
15to, property specified in Section 1102, manufactured homes as
16defined in Section 18007 of the Health and Safety Code, and
17property subject to Chapter 7.5 (commencing with Section 2621)
18of Division 2 of the Public Resources Code, the seller or broker
19is not required to provide information additional to that contained
20in the booklet concerning home energy ratings, and the information
21in the booklet shall be deemed to be adequate to inform the buyer
22about the existence of a statewide home energy
rating program.
23(b) Notwithstanding subdivision (a), nothing in this section
24alters any existing duty of the seller or broker under any other law
25including, but not limited to, the duties of a seller or broker under
26this article, Article 1.5 (commencing with Section 1102) of Chapter
272 of Title 4 of Part 4 of Division 2 of the Civil Code, or Chapter
287.5 (commencing with Section 2621) of Division 2 of the Public
29Resources Code, to disclose information concerning the existence
30of a home energy rating program affecting the real property.
31(c) If the informational booklet or materials described in Section
32375.5 of the Water Code concerning water conservation and water
33conservation programs are delivered to a buyer in connection with
34the sale of real property, including property described in
35subdivision (a), the seller or broker is not required to provide
36information concerning water
conservation and water conservation
37programs that is additional to that contained in the booklet or
38materials, and the information in the booklet or materials shall be
39deemed to be adequate to inform the buyer about water
40conservation and water conservation programs.
P168 1(d) This section shall become operative on July 1, 2018.
Section 2079.10.5 of the Civil Code is amended to
3read:
(a) Every contract for the sale of residential real
5property entered into on or after July 1, 2013, shall contain, in not
6less than 8-point type, a notice as specified below:
8NOTICE REGARDING GAS AND HAZARDOUS LIQUID
9TRANSMISSION PIPELINES
10This notice is being provided simply to inform you that
11information about the general location of gas and hazardous liquid
12transmission pipelines is available to the public via the National
13Pipeline Mapping System (NPMS) Internet Web site maintained
14by the United States Department of Transportation at
15http://www.npms.phmsa.dot.gov/. To seek further information
16about possible transmission pipelines near the property, you may
17contact your local
gas utility or other pipeline operators in the area.
18Contact information for pipeline operators is searchable by ZIP
19Code and county on the NPMS Internet Web site.
20
21(b) Upon delivery of the notice to the transferee of the real
22property, the seller or broker is not required to provide information
23in addition to that contained in the notice regarding gas and
24hazardous liquid transmission pipelines in subdivision (a). The
25information in the notice shall be deemed to be adequate to inform
26the transferee about the existence of a statewide database of the
27locations of gas and hazardous liquid transmission pipelines and
28information from the database regarding those locations.
29(c) Nothing in this section shall alter any existing duty under
30any other statute or decisional law imposed upon the seller or
31broker, including, but not limited to, the
duties of a seller or broker
32under this article, or the duties of a seller or broker under Article
331.5 (commencing with Section 1102) of Chapter 2 of Title 4 of
34Part 4 of Division 2.
35(d) This section shall repeal on July 1, 2018.
Section 2079.10.5 is added to the Civil Code, to
37read:
(a) Every contract for the sale of residential real
39property entered into on or after July 1, 2013, shall contain, in not
40less than 8-point type, a notice as specified below:
P169 2NOTICE REGARDING GAS AND HAZARDOUS LIQUID
3TRANSMISSION PIPELINES
4This notice is being provided simply to inform you that
5information about the general location of gas and hazardous liquid
6transmission pipelines is available to the public via the National
7Pipeline Mapping System (NPMS) Internet Web site maintained
8by the United States Department of Transportation at
9http://www.npms.phmsa.dot.gov/. To seek further information
10about possible transmission pipelines near the property, you may
11
contact your local gas utility or other pipeline operators in the area.
12Contact information for pipeline operators is searchable by ZIP
13Code and county on the NPMS Internet Web site.
14
15(b) Upon delivery of the notice to the buyer of the real property,
16the seller or broker is not required to provide information in
17addition to that contained in the notice regarding gas and hazardous
18liquid transmission pipelines in subdivision (a). The information
19in the notice shall be deemed to be adequate to inform the buyer
20about the existence of a statewide database of the locations of gas
21and hazardous liquid transmission pipelines and information from
22the database regarding those locations.
23(c) Nothing in this section shall alter any existing duty under
24any other statute or decisional law imposed upon the seller or
25broker, including, but not limited to,
the duties of a seller or broker
26under this article, or the duties of a seller or broker under Article
271.5 (commencing with Section 1102) of Chapter 2 of Title 4 of
28Part 4 of Division 2.
29(d) This section shall become operative on July 1, 2018.
Section 2079.10a of the Civil Code is amended to
31read:
(a) Every lease or rental agreement for residential
33real property entered into on or after July 1, 1999, and every
34contract for the sale of residential real property comprised of one
35to four dwelling units entered into on or after that date, shall
36contain, in not less than 8-point type, a notice as specified in
37paragraph (1), (2), or (3).
38(1) A contract entered into by the parties on or after July 1,
391999, and before September 1, 2005, shall contain the following
40notice:
P170 1Notice: The California Department of Justice, sheriff’s
2departments, police departments serving jurisdictions of 200,000
3or more, and many other local law enforcement authorities maintain
4for public access a
database of the locations of persons required
5to register pursuant to paragraph (1) of subdivision (a) of Section
6290.4 of the Penal Code. The database is updated on a quarterly
7basis and is a source of information about the presence of these
8individuals in any neighborhood. The Department of Justice also
9maintains a Sex Offender Identification Line through which
10inquiries about individuals may be made. This is a “900” telephone
11service. Callers must have specific information about individuals
12they are checking. Information regarding neighborhoods is not
13available through the “900” telephone service.
14(2) A contract entered into by the parties on or after September
151, 2005, and before April 1, 2006, shall contain either the notice
16specified in paragraph (1) or the notice specified in paragraph (3).
17(3) A contract entered into by the parties on or after April 1,
182006, shall contain
the following notice:
19Notice: Pursuant to Section 290.46 of the Penal Code,
20information about specified registered sex offenders is made
21available to the public via an Internet Web site maintained by the
22Department of Justice at www.meganslaw.ca.gov. Depending on
23an offender’s criminal history, this information will include either
24the address at which the offender resides or the community of
25residence and ZIP Code in which he or she resides.
26(b) Subject to subdivision (c), upon delivery of the notice to the
27lessee or transferee of the real property, the lessor, seller, or broker
28is not required to provide information in addition to that contained
29in the notice regarding the proximity of registered sex offenders.
30The information in the notice shall be deemed to be adequate to
31inform the lessee or transferee about the existence of a statewide
32database of the locations of registered sex offenders and
33
information from the database regarding those locations. The
34information in the notice shall not give rise to any cause of action
35against the disclosing party by a registered sex offender.
36(c) Notwithstanding subdivisions (a) and (b), nothing in this
37section shall alter any existing duty of the lessor, seller, or broker
38under any other statute or decisional law including, but not limited
39to, the duties of a lessor, seller, or broker under this article, or the
P171 1duties of a seller or broker under Article 1.5 (commencing with
2Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2.
3(d) This section shall repeal on July 1, 2018.
Section 2079.10a is added to the Civil Code, to read:
(a) Every lease or rental agreement for residential
6real property entered into on or after July 1, 1999, and every
7contract for the sale of residential real property comprised of one
8to four dwelling units entered into on or after that date, shall
9contain, in not less than 8-point type, a notice as specified in
10paragraph (1), (2), or (3).
11(1) A contract entered into by the parties on or after July 1,
121999, and before September 1, 2005, shall contain the following
13notice:
14Notice: The California Department of Justice, sheriff’s
15departments, police departments serving jurisdictions of 200,000
16or more, and many other local law enforcement authorities maintain
17for public access a database of the
locations of persons required
18to register pursuant to paragraph (1) of subdivision (a) of Section
19290.4 of the Penal Code. The database is updated on a quarterly
20basis and is a source of information about the presence of these
21individuals in any neighborhood. The Department of Justice also
22maintains a Sex Offender Identification Line through which
23inquiries about individuals may be made. This is a “900” telephone
24service. Callers shall have specific information about individuals
25they are checking. Information regarding neighborhoods is not
26available through the “900” telephone service.
27(2) A contract entered into by the parties on or after September
281, 2005, and before April 1, 2006, shall contain either the notice
29specified in paragraph (1) or the notice specified in paragraph (3).
30(3) A contract entered into by the parties on or after April 1,
312006, shall contain the following
notice:
32Notice: Pursuant to Section 290.46 of the Penal Code,
33information about specified registered sex offenders is made
34available to the public via an Internet Web site maintained by the
35Department of Justice at www.meganslaw.ca.gov. Depending on
36an offender’s criminal history, this information will include either
37the address at which the offender resides or the community of
38residence and ZIP Code in which he or she resides.
39(b) Subject to subdivision (c), upon delivery of the notice to the
40lessee or buyer of the real property, the lessor, seller, or broker is
P172 1not required to provide information in addition to that contained
2in the notice regarding the proximity of registered sex offenders.
3The information in the notice shall be deemed to be adequate to
4inform the lessee or buyer about the existence of a statewide
5database of the locations of registered sex offenders and
6information from the
database regarding those locations. The
7information in the notice shall not give rise to any cause of action
8against the disclosing party by a registered sex offender.
9(c) Notwithstanding subdivisions (a) and (b), nothing in this
10section shall alter any existing duty of the lessor, seller, or broker
11under any other statute or decisional law including, but not limited
12to, the duties of a lessor, seller, or broker under this article, or the
13duties of a seller or broker under Article 1.5 (commencing with
14Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2.
15(d) This section shall become operative on July 1, 2018.
Section 2079.13 of the Civil Code is amended to
17read:
As used in Sections 2079.14 to 2079.24, inclusive,
19the following terms have the following meanings:
20(a) “Agent” means a person acting under provisions of Title 9
21(commencing with Section 2295) in a real property transaction,
22and includes a person who is licensed as a real estate broker under
23Chapter 3 (commencing with Section 10130) of Part 1 of Division
244 of the Business and Professions Code, and under whose license
25a listing is executed or an offer to purchase is obtained.
26(b) “Associate licensee” means a person who is licensed as a
27real estate broker or salesperson under Chapter 3 (commencing
28with Section 10130) of Part 1 of Division 4 of the Business and
29Professions Code and who is either licensed under a broker
or has
30entered into a written contract with a broker to act as the broker’s
31agent in connection with acts requiring a real estate license and to
32function under the broker’s supervision in the capacity of an
33associate licensee.
34The agent in the real property transaction bears responsibility
35for his or her associate licensees who perform as agents of the
36agent. When an associate licensee owes a duty to any principal,
37or to any buyer or seller who is not a principal, in a real property
38transaction, that duty is equivalent to the duty owed to that party
39by the broker for whom the associate licensee functions.
P173 1(c) “Buyer” means a transferee in a real property transaction,
2and includes a person who executes an offer to purchase real
3property from a seller through an agent, or who seeks the services
4of an agent in more than a casual, transitory, or preliminary manner,
5with the object of entering into a real
property transaction. “Buyer”
6includes vendee or lessee.
7(d) “Commercial real property” means all real property in the
8state, except single-family residential real property, dwelling units
9made subject to Chapter 2 (commencing with Section 1940) of
10Title 5, mobilehomes, as defined in Section 798.3, or recreational
11vehicles, as defined in Section 799.29.
12(e) “Dual agent” means an agent acting, either directly or
13through an associate licensee, as agent for both the seller and the
14buyer in a real property transaction.
15(f) “Listing agreement” means a contract between an owner of
16real property and an agent, by which the agent has been authorized
17to sell the real property or to find or obtain a buyer.
18(g) “Listing agent” means a person who has obtained a
listing
19of real property to act as an agent for compensation.
20(h) “Listing price” is the amount expressed in dollars specified
21in the listing for which the seller is willing to sell the real property
22through the listing agent.
23(i) “Offering price” is the amount expressed in dollars specified
24in an offer to purchase for which the buyer is willing to buy the
25real property.
26(j) “Offer to purchase” means a written contract executed by a
27buyer acting through a selling agent that becomes the contract for
28the sale of the real property upon acceptance by the seller.
29(k) “Real property” means any estate specified by subdivision
30(1) or (2) of Section 761 in property that constitutes or is improved
31with one to four dwelling units, any commercial real property, any
32
leasehold in these types of property exceeding one year’s duration,
33and mobilehomes, when offered for sale or sold through an agent
34pursuant to the authority contained in Section 10131.6 of the
35Business and Professions Code.
36(l) “Real property transaction” means a transaction for the sale
37of real property in which an agent is employed by one or more of
38the principals to act in that transaction, and includes a listing or
39an offer to purchase.
P174 1(m) “Sell,” “sale,” or “sold” refers to a transaction for the
2transfer of real property from the seller to the buyer, and includes
3exchanges of real property between the seller and buyer,
4transactions for the creation of a real property sales contract within
5the meaning of Section 2985, and transactions for the creation of
6a leasehold exceeding one year’s duration.
7(n) “Seller”
means the transferor in a real property transaction,
8and includes an owner who lists real property with an agent,
9whether or not a transfer results, or who receives an offer to
10purchase real property of which he or she is the owner from an
11agent on behalf of another. “Seller” includes both a vendor and a
12lessor.
13(o) “Selling agent” means a listing agent who acts alone, or an
14agent who acts in cooperation with a listing agent, and who sells
15or finds and obtains a buyer for the real property, or an agent who
16locates property for a buyer or who finds a buyer for a property
17for which no listing exists and presents an offer to purchase to the
18seller.
19(p) “Subagent” means a person to whom an agent delegates
20agency powers as provided in Article 5 (commencing with Section
212349) of Chapter 1 of Title 9. However, “subagent” does not
22include an associate licensee who is acting under the
supervision
23of an agent in a real property transaction.
24This section shall repeal on July 1, 2018.
Section 2079.13 is added to the Civil Code, to read:
(a) For the purposes of this article, the definitions in
27Chapter 1 (commencing with Section 10000) of Part 1 of Division
284 of the Business and Professions Code shall apply.
29(b) Notwithstanding subdivision (a), for the purposes of Sections
302079 through 2079.6, inclusive, and Sections 2079.9 through
312079.12, inclusive, owners and managers of multi-family
32residential properties improved by more than four residential units
33are not “sellers” and a lease of such property does not constitute
34a “sale.”
35(c) This section shall become operative on July 1, 2018.
Section 2079.14 of the Civil Code is amended to
37read:
Listing agents and selling agents shall provide the
39seller and buyer in a real property transaction with a copy of the
40disclosure form specified in Section 2079.16, and, except as
P175 1provided in subdivision (c), shall obtain a signed acknowledgment
2of receipt from that seller or buyer, except as provided in this
3section or Section 2079.15, as follows:
4(a) The listing agent, if any, shall provide the disclosure form
5to the seller prior to entering into the listing agreement.
6(b) The selling agent shall provide the disclosure form to the
7seller as soon as practicable prior to presenting the seller with an
8offer to purchase, unless the selling agent previously provided the
9seller
with a copy of the disclosure form pursuant to subdivision
10(a).
11(c) Where the selling agent does not deal on a face-to-face basis
12with the seller, the disclosure form prepared by the selling agent
13may be furnished to the seller (and acknowledgment of receipt
14obtained for the selling agent from the seller) by the listing agent,
15or the selling agent may deliver the disclosure form by certified
16mail addressed to the seller at his or her last known address, in
17which case no signed acknowledgment of receipt is required.
18(d) The selling agent shall provide the disclosure form to the
19buyer as soon as practicable prior to execution of the buyer’s offer
20to purchase, except that if the offer to purchase is not prepared by
21the selling agent, the selling agent shall present the disclosure form
22to the buyer not later than the next business day after the selling
23agent receives the offer to
purchase from the buyer.
24(e) This section shall repeal on July 1, 2018.
Section 2079.14 is added to the Civil Code, to read:
A real estate broker shall provide the seller and buyer
27in a real property transaction with a copy of the disclosure form
28specified in Section 2079.16, and, except as provided in subdivision
29(c), shall obtain a signed acknowledgment of receipt from that
30seller or buyer, except as provided in this section or Section
312079.15, as follows:
32(a) The seller’s broker, if any, shall provide the disclosure form
33to the seller prior to entering into the listing agreement.
34(b) The buyer’s broker shall provide the disclosure form to the
35buyer as soon as practicable prior to execution of the buyer’s offer
36to purchase, except that if the offer to purchase is not prepared by
37the buyer’s broker, the buyer’s broker
shall present the disclosure
38form to the buyer not later than the next business day after the
39buyer’s broker receives the offer to purchase from the buyer.
40(c) This section shall become operative on July 1, 2018.
Section 2079.15 of the Civil Code is amended to
2read:
(a) In any circumstance in which the seller or buyer
4refuses to sign an acknowledgment of receipt pursuant to Section
52079.14, the agent, or an associate licensee acting for an agent,
6shall set forth, sign, and date a written declaration of the facts of
7the refusal.
8(b) This section shall repeal on July 1, 2018.
Section 2079.15 is added to the Civil Code, to read:
(a) In any circumstance in which the seller or buyer
11refuses to sign an acknowledgment of receipt pursuant to Section
122079.14, the real estate broker, or an associate licensee acting for
13a real estate broker, shall set forth, sign, and date a written
14declaration of the facts of the refusal.
15(b) This section shall become operative on July 1, 2018.
Section 2079.16 of the Civil Code is amended to
17read:
The disclosure form required by Section 2079.14
19shall have Sections 2079.13 to 2079.24, inclusive, excluding this
20section, printed on the back, and on the front of the disclosure form
21the following shall appear:
22
23DISCLOSURE REGARDING
24REAL ESTATE AGENCY RELATIONSHIP
25(As required by the Civil Code)
26
27When you enter into a discussion with a real estate agent
28regarding a real estate transaction, you should from the outset
29understand what type of agency relationship or representation you
30wish to have with the agent in the transaction.
31
32SELLER’S AGENT
33
34A Seller’s agent under a listing agreement with the Seller acts
35as the agent for the Seller only. A
Seller’s agent or a subagent of
36that agent has the following affirmative obligations:
37To the Seller:
38A fiduciary duty of utmost care, integrity, honesty, and loyalty
39in dealings with the Seller.
40To the Buyer and the Seller:
P177 1(a) Diligent exercise of reasonable skill and care in performance
2of the agent’s duties.
3(b) A duty of honest and fair dealing and good faith.
4(c) A duty to disclose all facts known to the agent materially
5affecting the value or desirability of the property that are not known
6to, or within the diligent attention and observation of, the parties.
7An agent is not obligated to reveal to either party any confidential
8information obtained from the other party that does not involve
9the affirmative duties set
forth above.
10
11BUYER’S AGENT
12
13A selling agent can, with a Buyer’s consent, agree to act as agent
14for the Buyer only. In these situations, the agent is not the Seller’s
15agent, even if by agreement the agent may receive compensation
16for services rendered, either in full or in part from the Seller. An
17agent acting only for a Buyer has the following affirmative
18obligations:
19To the Buyer:
20A fiduciary duty of utmost care, integrity, honesty, and loyalty
21in dealings with the Buyer.
22To the Buyer and the Seller:
23(a) Diligent exercise of reasonable skill and care in performance
24of the agent’s duties.
25(b) A duty of honest and fair dealing and good faith.
26(c) A duty to disclose all facts
known to the agent materially
27affecting the value or desirability of the property that are not known
28to, or within the diligent attention and observation of, the parties.
29An agent is not obligated to reveal to either party any confidential
30information obtained from the other party that does not involve
31the affirmative duties set forth above.
32
33AGENT REPRESENTING BOTH SELLER AND BUYER
34
35A real estate agent, either acting directly or through one or more
36associate licensees, can legally be the agent of both the Seller and
37the Buyer in a transaction, but only with the knowledge and consent
38of both the Seller and the Buyer.
39In a dual agency situation, the agent has the following affirmative
40obligations to both the Seller and the Buyer:
P178 1(a) A fiduciary duty of utmost care, integrity,
honesty, and
2loyalty in the dealings with either the Seller or the Buyer.
3(b) Other duties to the Seller and the Buyer as stated above in
4their respective sections.
5In representing both Seller and Buyer, the agent may not, without
6the express permission of the respective party, disclose to the other
7party that the Seller will accept a price less than the listing price
8or that the Buyer will pay a price greater than the price offered.
9The above duties of the agent in a real estate transaction do not
10relieve a Seller or Buyer from the responsibility to protect his or
11her own interests. You should carefully read all agreements to
12assure that they adequately express your understanding of the
13transaction. A real estate agent is a person qualified to advise about
14real estate. If legal or tax advice is desired, consult a
competent
15professional.
16Throughout your real property transaction you may receive more
17than one disclosure form, depending upon the number of agents
18assisting in the transaction. The law requires each agent with whom
19you have more than a casual relationship to present you with this
20disclosure form. You should read its contents each time it is
21presented to you, considering the relationship between you and
22the real estate agent in your specific transaction.
23This disclosure form includes the provisions of Sections 2079.13
24to 2079.24, inclusive, of the Civil Code set forth on the reverse
25hereof. Read it carefully.
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Agent (date) |
Buyer/Seller (date) |
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(Signature) |
(Signature) |
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Associate Licensee (date) |
Buyer/Seller (date) |
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(Signature) |
(Signature) |
34This section shall repeal on July 1, 2018.
Section 2079.16 is added to the Civil Code, to read:
The disclosure form required by Section 2079.14
37shall contain at a minimum the following:
38
39DISCLOSURE REGARDING
40REAL ESTATE RELATIONSHIPS WITH LICENSEES
P179 1(As required by Section 2079.14 of the Civil Code)
2
3When you enter into a relationship with a real estate broker
4regarding a real estate transaction, you should from the outset
5understand what type of representation you wish to have with the
6broker in the transaction.
7
8SELLER’S BROKER
9
10A Seller’s broker under a listing agreement with the Seller acts
11as the broker for the Seller only. A Seller’s broker has the following
12affirmative obligations:
13To the Seller:
14A fiduciary duty of care, integrity, honesty, and loyalty in
15dealings with the Seller.
16To the Buyer and the Seller:
17(a) Diligent exercise of reasonable skill and care in performance
18of the broker’s duties.
19(b) A duty of honest and fair dealing and good faith.
20(c) A duty to disclose all facts known to the broker materially
21affecting the value or desirability of the property that are not known
22to, or within the diligent attention and observation of, the parties.
23(d) A Seller’s broker may have other listing agreements with
24other Sellers.
25A broker is not obligated to reveal to either party any confidential
26information obtained from the other party or from other clients
27
that does not involve the affirmative duties set forth above.
28Confidential information includes, but is not limited to, facts
29relating to the party’s financial position, motivations, bargaining
30position, or other personal information that may impact price or
31price-related issues.
32
33BUYER’S BROKER
34
35A broker can, with the Buyer’s agreement, agree to act as broker
36for the Buyer only. The Buyer’s broker may receive compensation
37for services rendered, either in full or in part from the Seller, but
38that does not make the Buyer’s broker the Seller’s broker. A broker
39acting for a Buyer has the following affirmative obligations:
40To the Buyer:
P180 1A fiduciary duty of care, integrity, honesty, and loyalty in
2dealings with the Buyer.
3To the Buyer and the Seller:
4(a) Diligent exercise of reasonable skill and care in
performance
5of the broker’s duties.
6(b) A duty of honest and fair dealing and good faith.
7(c) A duty to disclose all facts known to the real estate broker
8materially affecting the value or desirability of the property that
9are not known to, or within the diligent attention and observation
10of, the parties. A real estate broker is not obligated to reveal to
11either party any confidential information obtained from the other
12party or from other clients that does not involve the affirmative
13duties set forth above. Confidential information includes, but is
14not limited to, facts relating to the party’s financial position,
15motivations, bargaining position, or other personal information
16that may impact price or price-related issues.
17(d) The Buyer’s broker may also be providing services to other
18buyers in regard to the same or
different properties.
19
20BROKER REPRESENTING BOTH SELLER AND BUYER
21
22A real estate broker, either acting directly or through one or more
23associate licensees, can legally represent both the Seller and the
24Buyer in a transaction, but only with the knowledge and consent
25of both the Seller and the Buyer.
26In a dual brokerage or dual licensee situation, the broker and
27dual licensees have the following affirmative obligations to both
28the Seller and the Buyer:
29(a) A fiduciary duty of care, integrity, honesty, and loyalty in
30the dealings with either the Seller or the Buyer.
31(b) Other duties to the Seller and the Buyer as stated above in
32their respective sections.
33In representing both Seller and Buyer, the broker or
dual licensee
34may not, without the express permission of the respective party,
35disclose to the other party in that transaction any confidential
36information obtained from the other party that does not involve
37the affirmative duties set forth above. Confidential information
38includes, but is not limited to, facts relating to the party's financial
39position, motivations, bargaining position, or other personal
40information that may impact price or price-related issues. A broker
P181 1is not obligated to reveal to either party any information obtained
2from clients or reports regarding the property in a previous
3transaction regarding the same property without the client’s
4consent.
5
6CONSUMER RESPONSIBILITIES
7
8The above duties of the broker in a real estate transaction do not
9relieve a Seller or Buyer from the responsibility to protect his or
10her own interests, including reading all documents, reports, and
11disclosures. The Buyer has
a duty to exercise reasonable care to
12protect himself or herself, including obtaining and considering
13those facts which are known to or within the diligent attention and
14observation of the Buyer. You should carefully read all agreements
15to assure that they adequately express your understanding of the
16transaction. A real estate broker is a person qualified to advise
17about real estate. If legal or tax advice is desired, consult a
18competent professional.
19Since you will likely not know who the Buyer is going to be, if
20you are the Seller, or which property you are going to buy, if you
21are the Buyer, consider the confirmation of relationships carefully
22in the context of each offer as it may change as the property in the
23transaction is identified and the respective parties and their brokers
24become clear.
25This disclosure form includes the provisions of Sections 2079.13
26to 2079.24, inclusive, of the Civil Code set forth on the
reverse
27hereof. Read it carefully.
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Real Estate Broker (date) |
Buyer/Seller (date) |
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(Signature) |
(Signature) |
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Associate Licensee (date) |
Buyer/Seller (date) |
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(Signature) |
(Signature) |
36This section shall become operative on July 1, 2018.
Section 2079.17 of the Civil Code is amended to
38read:
(a) As soon as practicable, the selling agent shall
40disclose to the buyer and seller whether the selling agent is acting
P182 1in the real property transaction exclusively as the buyer’s agent,
2exclusively as the seller’s agent, or as a dual agent representing
3both the buyer and the seller. This relationship shall be confirmed
4in the contract to purchase and sell real property or in a separate
5writing executed or acknowledged by the seller, the buyer, and the
6selling agent prior to or coincident with execution of that contract
7by the buyer and the seller, respectively.
8(b) As soon as practicable, the listing agent shall disclose to the
9seller whether the listing agent is acting in the real property
10transaction exclusively as
the seller’s agent, or as a dual agent
11representing both the buyer and seller. This relationship shall be
12confirmed in the contract to purchase and sell real property or in
13a separate writing executed or acknowledged by the seller and the
14listing agent prior to or coincident with the execution of that
15contract by the seller.
16(c) The confirmation required by subdivisions (a) and (b) shall
17be in the following form:
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[ ] the seller exclusively; or |
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[ ] both the buyer and seller. |
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is the agent of (check one): |
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[ ] the buyer exclusively; or |
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[ ] the seller exclusively; or |
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[ ] both the buyer and seller. |
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30(d) The disclosures and confirmation required by this section
31shall be in addition to the disclosure required by Section 2079.14.
32(e) This section shall repeal on July 1, 2018.
Section 2079.17 is added to the Civil Code, to read:
(a) As soon as practicable, the buyer’s broker shall
35disclose to the buyer and seller whether the broker is acting in the
36real property transaction as the buyer’s broker or as a dual broker
37representing both the buyer and the seller. This relationship shall
38be confirmed in the contract to purchase and sell real property or
39in a separate writing executed or acknowledged by the seller, the
40buyer, and the buyer’s broker either directly or through an associate
P183 1licensee prior to or coincident with execution of that contract by
2the buyer and the seller, respectively.
3(b) As soon as practicable, the seller’s broker shall disclose to
4the seller whether the seller’s licensee is acting in the real property
5transaction as the seller’s broker or as a
dual broker representing
6both the buyer and seller. This relationship shall be confirmed in
7the contract to purchase and sell real property or in a separate
8writing executed or acknowledged by the seller and the seller’s
9broker either directly or through an associate licensee prior to or
10coincident with the execution of that contract by the seller.
11(c) The confirmation required by subdivisions (a) and (b) shall
12be in the following form:
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the broker of (check one): |
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[ ] the seller; or |
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[ ] both the buyer and seller. (dual broker) |
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[ ] is the Seller’s Licensee. (salesperson or associate broker) |
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[ ] is both the Buyer’s and Seller’s Licensee. (dual licensee) |
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the broker of (check one): |
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[ ] the buyer; or |
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[ ] both the buyer and seller. (dual broker) |
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[ ] the Buyer’s Licensee. (salesperson or associate broker) |
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[ ] both the Buyer’s and Seller’s Licensee. (dual licensee) |
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33(d) The disclosures and confirmation required by this section
34shall be in addition to the disclosure required by Section 2079.14.
35A real estate salesperson or associate
broker affiliated with a broker
36providing the required disclosures and confirmation on behalf of
37that broker shall satisfy the broker’s duties of disclosure and
38confirmation.
39(e) This section shall become operative on July 1, 2018.
Section 2079.18 of the Civil Code is amended to
2read:
(a) No selling agent in a real property transaction
4may act as an agent for the buyer only, when the selling agent is
5also acting as the listing agent in the transaction.
6(b) This section shall repeal on July 1, 2018.
Section 2079.19 of the Civil Code is amended to
8read:
(a) The payment of compensation or the obligation
10to pay compensation to an agent by the seller or buyer is not
11necessarily determinative of a particular agency relationship
12between an agent and the seller or buyer. A listing agent and a
13selling agent may agree to share any compensation or commission
14paid, or any right to any compensation or commission for which
15an obligation arises as the result of a real estate transaction, and
16the terms of any such agreement shall not necessarily be
17determinative of a particular relationship.
18(b) This section shall repeal on July 1, 2018.
Section 2079.19 is added to the Civil Code, to read:
(a) The payment of compensation or the obligation
21to pay compensation to a real estate broker by the seller or buyer
22is not necessarily determinative of a particular agency relationship
23between a real estate broker and the seller or buyer. The parties
24may agree to an agency relationship established and governed by
25a written agreement between the parties or an agreement for
26services for licensed activity without an agency relationship. A
27seller’s broker and a buyer’s broker may agree to share any
28compensation or commission paid, or any right to any
29compensation or commission for which an obligation arises as the
30result of a real estate transaction, and the terms of any such
31agreement shall not necessarily be determinative of a particular
32relationship.
33(b) This section shall become operative on July 1, 2018.
Section 2079.20 of the Civil Code is amended to
35read:
(a) Nothing in this article prevents an agent from
37selecting, as a condition of the agent’s employment, a specific
38form of agency relationship not specifically prohibited by this
39article if the requirements of Section 2079.14 and Section 2079.17
40are complied with.
P185 1(b) This section shall repeal on July 1, 2018.
Section 2079.21 of the Civil Code is amended to
3read:
A dual agent shall not disclose to the buyer that the
5seller is willing to sell the property at a price less than the listing
6price, without the express written consent of the seller. A dual
7agent shall not disclose to the seller that the buyer is willing to pay
8a price greater than the offering price, without the express written
9consent of the buyer.
10This section does not alter in any way the duty or responsibility
11of a dual agent to any principal with respect to confidential
12information other than price.
13This section shall repeal on July 1, 2018.
Section 2079.21 is added to the Civil Code, to read:
(a) A dual licensee may not, without the express
16permission of a client, disclose to the other client any confidential
17information obtained from the other client that does not involve
18the affirmative duties described in Section 2079.16. Confidential
19information includes, but is not limited to, facts relating to the
20client’s financial position, motivations, bargaining position, or
21other personal information that may impact price or price-related
22issues.
23(b) This section shall become operative on July 1, 2018.
Section 2079.22 of the Civil Code is amended to
25read:
(a) Nothing in this article precludes a listing agent
27from also being a selling agent, and the combination of these
28functions in one agent does not, of itself, make that agent a dual
29agent.
30(b) This section shall repeal on July 1, 2018.
Section 2079.22 is added to the Civil Code, to read:
(a) Nothing in this article precludes a seller’s broker,
33including through one or more associate licensees, from also being
34a buyer’s broker. If one party to the transaction chooses to not be
35represented by a broker, that does not, of itself, make that broker
36a dual licensee without the written consent set forth in Section
372079.18. An agency relationship between a client and a broker or
38associate licensee shall have the express written consent of all
39parties.
40(b) This section shall become operative on July 1, 2018.
Section 2079.23 of the Civil Code is amended to
2read:
(a) A contract between the principal and agent may
4be modified or altered to change the agency relationship at any
5time before the performance of the act which is the object of the
6agency with the written consent of the parties to the agency
7relationship.
8(b) A lender or an auction company retained by a lender to
9control aspects of a transaction of real property subject to this part,
10including validating the sales price, shall not require, as a condition
11of receiving the lender’s approval of the transaction, the
12homeowner or listing agent to defend or indemnify the lender or
13auction company from any liability alleged to result from the
14actions of the lender or auction company. Any clause, provision,
15covenant, or agreement purporting to impose an obligation to
16
defend or indemnify a lender or an auction company in violation
17of this subdivision is against public policy, void, and unenforceable.
18(c) This section shall repeal on July 1, 2018.
Section 2079.23 is added to the Civil Code, to read:
(a) A contract between the principal and the real
21estate broker may be modified or altered to change the relationship
22at any time before the performance of the act which is the object
23of the license services with the written consent of the parties to
24the relationship.
25(b) A lender or an auction company retained by a lender to
26control aspects of a transaction of real property subject to this part,
27including validating the sales price, shall not require, as a condition
28of receiving the lender’s approval of the transaction, the
29homeowner or any licensee to defend or indemnify the lender or
30auction company from any liability alleged to result from the
31actions of the lender or auction company. Any clause, provision,
32covenant, or agreement
purporting to impose an obligation to
33defend or indemnify a lender or an auction company in violation
34of this subdivision is against public policy, void, and unenforceable.
35(c) This section shall become operative on July 1, 2018.
Section 2079.24 of the Civil Code is amended to
37read:
(a) Nothing in this article shall be construed to either
39diminish the duty of disclosure owed buyers and sellers by agents
40and their associate licensees, subagents, and employees or to relieve
P187 1agents and their associate licensees, subagents, and employees
2from liability for their conduct in connection with acts governed
3by this article or for any breach of a fiduciary duty or a duty of
4disclosure.
5(b) This section shall repeal on July 1, 2018.
Section 2079.24 is added to the Civil Code, to read:
(a) Nothing in this article shall be construed to either
8diminish the duty of disclosure owed to buyers and sellers by
9brokers, including their broker associates, salespersons, and
10employees, or to relieve brokers, including their broker associates,
11salespersons, and employees from liability for their conduct in
12connection with acts governed by this article.
13(b) This section shall become operative on July 1, 2018.
Section 31210 of the Corporations Code is amended
16to read:
begin delete(a)end deletebegin delete end deleteIt is unlawful for any person to effect or attempt to
18effect a sale of a franchise in this state, except in transactions
19exempted under Chapter 1 (commencing with Section 31100) of
20Part 2 of this division, unless such person is: (1) identified in an
21application or amended application filed with the commissioner
22pursuant to Part 2 (commencing with Section 31100) of this
23division, (2) licensed by the Bureau of Real Estate as a real estate
24broker or real estatebegin delete salesman,end deletebegin insert
salesperson,end insert or (3) licensed by the
25commissioner as a broker-dealer or agent pursuant to the Corporate
26Securities Law of 1968.
27(b) This section shall repeal on July 1, 2018.
end deleteSection 31210 is added to the Corporations Code,
29to read:
(a) It is unlawful for any person to effect or attempt to
31effect a sale of a franchise in this state, except in transactions
32exempted under Chapter 1 (commencing with Section 31100) of
33Part 2 of this division, unless such person is: (1) identified in an
34application or amended application filed with the commissioner
35pursuant to Part 2 (commencing with Section 31100) of this
36division, (2) licensed by the Bureau of Real Estate as a real estate
37broker or real estate salesperson, or (3) licensed by the
38commissioner as a broker-dealer or agent pursuant to the Corporate
39Securities Law of 1968.
40(b) This section shall become operative on July 1, 2018.
No reimbursement is required by this act pursuant
2to Section 6 of Article XIII B of the California Constitution because
3the only costs that may be incurred by a local agency or school
4district will be incurred because this act creates a new crime or
5infraction, eliminates a crime or infraction, or changes the penalty
6for a crime or infraction, within the meaning of Section 17556 of
7the Government Code, or changes the definition of a crime within
8the meaning of Section 6 of Article XIII B of the California
9Constitution.
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