BILL NUMBER: AB 685 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 14, 2016
AMENDED IN SENATE APRIL 26, 2016
AMENDED IN ASSEMBLY APRIL 8, 2015
INTRODUCED BY Assembly Member Irwin
FEBRUARY 25, 2015
An act to amend and repeal Section 10160 of, to amend,
repeal, and add Sections 6742, 10001,
10003, 10007, 10008, 10009.5, 10010, 10011, 10012, 10013, 10014,
10015, 10016, 10023, 10024, 10026, 10027,
10050, 10074, 10080.9, 10082, 10131.01,
10132, 10133.1, 10136, 10137, 10140.5, 10142,
10143.5, 10144, 10158, 10159, 10159.6, 10159.7,
10161.5, 10161.8, 10164, 10166.03, 10176, 10177,
10178, 10179, 10186.2, 10232.3, 10238, 10243, 10509, 10561,
11212, and 11267 of, to add Sections 10015.1, 10015.2, 10015.3,
10015.4, 10018.01, 10018.02, 10018.03, 10018.04, 10018.05, 10018.06,
10018.07, 10018.08, 10018.09, 10018.10, 10018.11, 10018.12, 10018.13,
10018.14, 10018.15, 10018.16, 10018.17, and 10018.18 to,
and 11212 of, and to repeal Section 10017 of, the Business
and Professions Code, to amend and repeal Sections
1102.14, 1103.14, 2079.18, and 2079.20 of, to amend, repeal, and add
Sections 1102, 1102.1, 1102.2, 1102.3, 1102.4, 1102.5, 1102.6a,
1102.6b, 1102.6c, 1102.9, 1102.12, 1102.155, 1103, 1103.1, 1103.2,
1103.3, 1103.4, 1103.5, 1103.8, 1103.9, 1103.12, 2079, 2079.6,
2079.7, 2079.8, 2079.9, 2079.10, 2079.10.5, 2079.10a, 2079.13,
2079.14, 2079.15, 2079.16, 2079.17, 2079.19, 2079.21, 2079.22,
2079.23, and 2079.24 of, to add Section 1103.1.5 to, and to repeal
and add Article 6 (commencing with Section 1086) of Chapter 1 of
Title 4 of Part 4 of Division 2 of, the Civil Code, and to amend,
repeal, and add and to amend Section 31210 of the
Corporations Code, relating to real estate.
LEGISLATIVE COUNSEL'S DIGEST
AB 685, as amended, Irwin. Real Estate Law: sales of
real property: real property disclosure requirements.
Law.
(1) Existing
Existing 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. A willful violation of the law and other related
real estate provisions is a crime.
Under
(1) Under existing law, a real
estate salesman is a natural person who is licensed and
employed by a licensed real estate broker to do specified acts.
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.
This bill would 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. 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.
(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.
This bill would additionally prohibit a license from being issued
under those circumstances.
(3) This bill would make various nonsubstantive changes.
This 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.
Existing 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.
This 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.
Existing 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.
This 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.
Under 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.
This 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.
Under 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.
This 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.
(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.
If 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.
This 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.
(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.
This 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.
Under 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.
When 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.
This bill would delete those provisions relating to expert
responsibility.
Existing 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.
This 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.
Under 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.
If 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.
(C) Existing law generally requires the disclosure of natural and
environmental hazards, right-to-farm, and other disclosures upon the
transfer of residential property.
This 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.
(D) Under existing law, real estate brokers and salespersons owe
certain duties to prospective purchasers of real property.
This bill would make the definitions in the Real Estate Law, as
described in paragraph (1), applicable to these provisions.
Existing 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.
This 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.
(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.
This bill would also prohibit the commissioner from issuing a
license to a person who has failed to comply with the terms of a
citation or to pay an outstanding fine.
Existing law authorizes the commissioner to suspend or revoke the
license of a real estate licensee if he or she has engaged in
specified activities or has had a license issued by another agency,
another state, or the federal government revoked or suspended for
engaging in those activities, if specified conditions are met.
This bill would also authorize the commissioner to suspend or
revoke the license of a real estate licensee who surrendered a
licensed issued by another agency, another state, or the federal
government. The bill would also authorize the commissioner to suspend
or revoke the license of a licensee for failure to surrender a
license that was issued in error or by mistake.
Existing law requires real estate licensees to report the bringing
of an indictment or information charging a felony against the
licensee. A willful or knowing violation of this requirement is
punishable by a fine and imprisonment.
This bill would also require a licensee to report 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.
The bill would also make other nonsubstantive changes.
(4) This bill would make numerous conforming and nonsubstantive
changes.
(5) This bill would delay the operation of these provisions to
July 1, 2018.
(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.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6742 of the Business and Professions Code is
amended to read:
6742. (a) Any person,
firm firm, or corporation holding a
license as real estate broker or real estate salesman,
salesperson, when making appraisals and
valuations of real estate properties, while engaged in the business
or acting in the capacity of a real estate broker or a real estate
salesman, salesperson, within the
meaning of the California Real Estate Act
Law is exempt from registration under the
provisions of this chapter.
(b) This section shall repeal on July 1, 2018.
SEC. 2. Section 6742 is added to the Business
and Professions Code, to read:
6742. (a) Any person, firm or corporation holding a license as
real estate broker or real estate salesperson, when making appraisals
and valuations of real estate properties, while engaged in the
business or acting in the capacity of a real estate broker or a real
estate salesperson, within the meaning of the California Real Estate
Act is exempt from registration under the provisions of this chapter.
(b) This section shall become operative on July 1, 2018.
SEC. 3. Section 10001 of the Business and
Professions Code is amended to read:
10001. (a) The definitions in this chapter apply to the
provisions of this part only and do not affect any other provisions
of this code.
(b) This section shall repeal on July 1, 2018.
SEC. 4. Section 10001 is added to the Business
and Professions Code, to read:
10001. (a) Except as otherwise specified, the definitions in this
chapter apply to the provisions of this part only and do not affect
any other provisions of this code.
(b) This section shall become operative on July 1, 2018.
SEC. 5. SEC. 2. Section 10003 of the
Business and Professions Code is amended to read:
10003. (a) "Commissioner"
refers to means the Real Estate
Commissioner.
(b) This section shall repeal on July 1, 2018.
SEC. 6. Section 10003 is added to the Business
and Professions Code, to read:
10003. (a) "Commissioner" means the Real Estate Commissioner.
(b) This section shall become operative on July 1, 2018.
SEC. 7. SEC. 3. Section 10007 of the
Business and Professions Code is amended to read:
10007. (a) "Provisions of
this part relating to real estate" refers to
means the provisions of Chapters 1, 2, 3, and 6 of Part 1.
(b) This section shall repeal on July 1, 2018.
SEC. 8. Section 10007 is added to the Business
and Professions Code, to read:
10007. (a) "Provisions of this part relating to real estate"
means the provisions of Chapters 1, 2, 3, and 6 of Part 1.
(b) This section shall become operative on July 1, 2018.
SEC. 9. SEC. 4. Section 10008 of the
Business and Professions Code is amended to read:
10008. (a) "Provisions of
this part relating to business opportunity regulation"
refers to means the provisions of Chapters 1, 2,
and 6 of Part 1.
(b) This section shall repeal on July 1, 2018.
SEC. 10. Section 10008 is added to the Business
and Professions Code, to read:
10008. (a) "Provisions of this part relating to business
opportunity regulation" means the provisions of Chapters 1, 2, and 6
of Part 1.
(b) This section shall become operative on July 1, 2018.
SEC. 11. SEC. 5. Section 10009.5 of
the Business and Professions Code is amended to read:
10009.5. (a) "Provisions of
this part relating to mineral, oil, and gas brokerage"
refers to means the provisions of Chapters 1, 2,
6, and 7, of Part 1.
(b) This section shall repeal on July 1, 2018.
SEC. 12. Section 10009.5 is added to the
Business and Professions Code, to read:
10009.5. (a) "Provisions of this part relating to mineral, oil,
and gas brokerage" means the provisions of Chapters 1, 2, 6, and 7,
of Part 1.
(b) This section shall become operative on July 1, 2018.
SEC. 13. SEC. 6. Section 10010 of
the Business and Professions Code is amended to read:
10010. (a) "Provisions of
this part relating to hearings" refers to
means the provisions of Article 3 of Chapter 2 of Part 1.
(b) This section shall repeal on July 1, 2018.
SEC. 14. Section 10010 is added to the Business
and Professions Code, to read:
10010. (a) "Provisions of this part relating to hearings" means
the provisions of Article 3 of Chapter 2 of Part 1.
(b) This section shall become operative on July 1, 2018.
SEC. 15. SEC. 7. Section 10011 of
the Business and Professions Code is amended to read:
10011. (a) "Licensee," when
used without modification, refers to means
a person, whether broker or salesman,
salesperson, licensed under any of the provisions of this part.
(b) This section shall repeal on July 1, 2018.
SEC. 16. Section 10011 is added to the Business
and Professions Code, to read:
10011. (a) "Licensee," when used without modification, means to a
person, whether broker or salesperson, licensed under any of the
provisions of this part.
(b) This section shall become operative on July 1, 2018.
SEC. 17. SEC. 8. Section 10012 of
the Business and Professions Code is amended to read:
10012. (a) "Broker," when
used without modification, refers to means
a person licensed as a broker under any of the provisions of
this part.
(b) This section shall repeal on July 1, 2018.
SEC. 18. Section 10012 is added to the Business
and Professions Code, to read:
10012. (a) "Broker," when used without modification, means a
person licensed as a broker under any of the provisions of this part.
(b) This section shall become operative on July 1, 2018.
SEC. 19. SEC. 9. Section 10013 of the
Business and Professions Code is amended to read:
10013. (a)
"Salesman," "Salesperson," when used without
modification, refers to means a person
licensed as a salesman salesperson
under any of the provisions of this part. Whenever the word
salesman is used in this division, or in the rules and regulations of
the commissioner, it means salesperson. Notwithstanding any other
law, a licensee may elect to refer to his or her licensed status as
real estate salesman, real estate saleswoman, or real estate
salesperson.
(b) This section shall repeal on July 1, 2018.
SEC. 20. Section 10013 is added to the Business
and Professions Code, to read:
10013. (a) "Salesperson," when used without modification, means a
person licensed as a salesperson under any of the provisions of this
part. Whenever the word salesman is used in this division, or in the
rules and regulations of the commissioner, it means salesperson. A
licensee may elect to refer to his or her licensed status as real
estate salesman, real estate saleswoman, or real estate salesperson.
(b) This section shall become operative on July 1, 2018.
SEC. 21. SEC. 10. Section 10014 of
the Business and Professions Code is amended to read:
10014. (a) "Real estate
licensee" refers to means a person,
whether broker or salesman, salesperson,
licensed under Chapter 3 of this part.
(b) This section shall repeal on July 1, 2018.
SEC. 22. Section 10014 is added to the Business
and Professions Code, to read:
10014. (a) "Real estate licensee" means a person, whether broker
or salesperson, licensed under Chapter 3 of this part.
(b) This section shall become operative on July 1, 2018.
SEC. 23. SEC. 11. Section 10015 of
the Business and Professions Code is amended to read:
10015. (a) "Real estate
broker" refers to means a person
licensed as a broker under Chapter 3 of this part.
(b) This section shall repeal on July 1, 2018.
SEC. 24. Section 10015 is added to the Business
and Professions Code, to read:
10015. (a) "Real estate broker" means a person licensed as a
broker under Chapter 3 of this part.
(b) This section shall become operative on July 1, 2018.
SEC. 25. Section 10015.1 is added to the
Business and Professions Code, to read:
10015.1. (a) "Responsible broker" means a real estate broker
responsible for the exercise of control and supervision of real
estate salespersons under Section 10159.2 or a real estate licensee
subject to discipline under subdivision (h) of Section 10177 for
failure to supervise activity requiring a real estate license. The
supervision of a salesperson required under this part is limited to
regulatory compliance and consumer protection.
(b) This section shall become operative on July 1, 2018.
SEC. 26. Section 10015.2 is added to the
Business and Professions Code, to read:
10015.2. (a) "Branch manager" or "division manager" means a real
estate licensee authorized to perform supervisorial services for a
responsible broker.
(b) This section shall become operative on July 1, 2018.
SEC. 27. Section 10015.3 is added to the
Business and Professions Code, to read:
10015.3. (a) "Broker associate" means a broker affiliated with
another real estate broker as an independent contractor or affiliated
in another capacity who has authority to provide services requiring
a real estate license on behalf of the real estate broker.
(b) This section shall become operative on July 1, 2018.
SEC. 28. Section 10015.4 is added to the
Business and Professions Code, to read:
10015.4. (a) "Broker identity" means the name under which the
broker operates or conducts business and may include a sole
proprietorship or business entity name.
(b) This section shall become operative on July 1, 2018.
SEC. 29. SEC. 12. Section 10016 of
the Business and Professions Code is amended to read:
10016. (a) "Real estate
salesman" refers to salesperson" means
a person licensed as a salesman salesperson
under Chapter 3 of this part.
(b) This section shall repeal on July 1, 2018.
SEC. 30. Section 10016 is added to the Business
and Professions Code, to read:
10016. (a) "Real estate salesperson" means a person licensed as a
salesperson under Chapter 3 of this part or a broker associate.
(b) This section shall become operative on July 1, 2018.
SEC. 31. Section 10017 of the Business and
Professions Code is amended to read:
10017. (a) Whenever the word salesman is used in this division,
or in the rules and regulations of the commissioner, it means
salesperson. A licensee, however, may elect to refer to the licensed
status as real estate salesman, real estate saleswoman, or real
estate salesperson.
(b) This section shall repeal on July 1, 2018.
SEC. 13. Section 10017 of the Business
and Professions Code is repealed.
10017. Whenever the word salesman is used in this division, or in
the rules and regulations of the commissioner, it means salesperson.
A licensee, however, may elect to refer to the licensed status as
real estate salesman, real estate saleswoman, or real estate
salesperson.
SEC. 32. Section 10018.01 is added to the
Business and Professions Code, to read:
10018.01. (a) "Retained" means the relationship between a broker
and a real estate licensee who is either an independent contractor or
otherwise affiliated with a broker to perform activities that
require a license and are performed under a broker's supervision.
(b) This section shall become operative on July 1, 2018.
SEC. 33. Section 10018.02 is added to the
Business and Professions Code, to read:
10018.02. (a) "Seller" means a transferor in a real property
transaction, and includes an owner who lists real property with a
broker, whether or not a transfer results, or who receives an offer
to purchase real property of which he or she is the owner from a
licensee on behalf of another. "Seller" includes both a vendor and
lessor of real property.
(b) This section shall become operative on July 1, 2018.
SEC. 34. Section 10018.03 is added to the
Business and Professions Code, to read:
10018.03. (a) "Listing licensee" means a real estate licensee who
provides services requiring a real estate license for a seller
pursuant to a listing agreement.
(b) This section shall become operative on July 1, 2018.
SEC. 35. Section 10018.04 is added to the
Business and Professions Code, to read:
10018.04. (a) "Seller's licensee" means a real estate licensee
who provides services requiring a real estate license for a seller.
(b) This section shall become operative on July 1, 2018.
SEC. 36. Section 10018.05 is added to the
Business and Professions Code, to read:
10018.05. (a) "Buyer" means a transferee in a real property
transaction, and includes a person who executes an offer to purchase
real property from a seller through a broker, or a broker associate
or real estate salesperson acting on behalf of a broker, or who seeks
the services of a real estate licensee in more than a casual,
transitory, or preliminary manner, with the object of entering into a
real property transaction. "Buyer" includes both a vendee and lessee
of real property. Buyer also includes a transferee or purchaser.
(b) This section shall become operative on July 1, 2018.
SEC. 37. Section 10018.06 is added to the
Business and Professions Code, to read:
10018.06. (a) "Buyer's licensee," "cooperating licensee," and
"selling licensee" each means a real estate licensee who provides
services requiring a real estate license for a buyer.
(b) This section shall become operative on July 1, 2018.
SEC. 38. Section 10018.07 is added to the
Business and Professions Code, to read:
10018.07. (a) "Real property" means any estate specified in
paragraphs (1) or (2) Section 761 of the Civil Code in property, and
includes (a) residential property, (b) multiunit residential property
with more than four dwelling units, (c) commercial real property,
(d) a ground lease coupled with improvements, or (e) a mobilehome as
defined in Section 18008 of the Health and Safety Code.
(b) This section shall become operative on July 1, 2018.
SEC. 39. Section 10018.08 is added to the
Business and Professions Code, to read:
10018.08. (a) "Residential property" means property (1) improved
with one to four dwelling units, (2) any leasehold exceeding one year'
s duration, (3) a unit in a residential stock cooperative, or (4) a
mobilehome when offered for sale or sold through a real estate
broker.
(b) This section shall become operative on July 1, 2018.
SEC. 40. Section 10018.09 is added to the
Business and Professions Code, to read:
10018.09. (a) "Commercial real property" means all real property
in the state, except (1) residential real property, (2) dwelling
units made subject to Chapter 2 (commencing with Section 1940) of
Title 5 of Part 4 of Division 3 of the Civil Code, (3) a mobilehome
as defined in Section 798.3 of the Civil Code, or (4) a recreational
vehicle as defined in Section 799.29 of the Civil Code.
(b) This section shall become operative on July 1, 2018.
SEC. 41. Section 10018.10 is added to the
Business and Professions Code, to read:
10018.10. (a) "Sell," "sale," or "sold" means a transaction for
the transfer of real property from a seller to a buyer, and includes
(1) an exchange of real property between a seller and a buyer, (2)
transactions for the creation of a real property sales contract
within the meaning of Section 2985 of the Civil Code, and (3) a
leasehold exceeding one year's duration.
(b) This section shall become operative on July 1, 2018.
SEC. 42. Section 10018.11 is added to the
Business and Professions Code, to read:
10018.11. (a) "Dual broker" means a responsible broker that has
both a seller's licensee and a buyer's licensee under his or her
supervision in the same transaction or who individually provides
services for both a seller and a buyer in the same transaction.
(b) This section shall become operative on July 1, 2018.
SEC. 43. Section 10018.12 is added to the
Business and Professions Code, to read:
10018.12. (a) "Dual licensee" means a real estate salesperson or
broker associate who individually provides services requiring a real
estate license for both a seller and a buyer at the same time in the
same transaction.
(b) This section shall become operative on July 1, 2018.
SEC. 44. Section 10018.13 is added to the
Business and Professions Code, to read:
10018.13. (a) "Transaction coordinator" means a person who
provides services which include administrative and clerical tasks for
a real estate licensee that do not include licensed activities.
(b) This section shall become operative on July 1, 2018.
SEC. 45. Section 10018.14 is added to the
Business and Professions Code, to read:
10018.14. (a) "Appraiser" means one licensed or certified under
Part 3 (commencing with Section 11300) of Division 4.
(b) This section shall become operative on July 1, 2018.
SEC. 46. Section 10018.15 is added to the
Business and Professions Code, to read:
10018.15. (a) "Listing agreement" means a written contract
between an owner of real property and a real estate licensee by which
the licensee has been authorized to sell the real property or find
or obtain a buyer.
(b) This section shall become operative on July 1, 2018.
SEC. 47. Section 10018.16 is added to the
Business and Professions Code, to read:
10018.16. (a) "Exclusive right to sell listing" means a listing
agreement whereby the owner grants to a broker, for a specified
period of time, the exclusive right to sell, find, or obtain a buyer
for the real property, and the broker is entitled to the agreed
compensation if during that period of time the real property is sold,
no matter who effected the sale, or when the listing broker receives
and presents to the owner any enforceable offer from a ready, able,
and willing buyer on terms authorized by the listing agreement or
which is accepted by the owner. The "exclusive right to sell listing"
may provide for compensation to the listing broker if the property
is sold within a specified period after termination of the listing
agreement.
(b) This section shall become operative on July 1, 2018.
SEC. 48. Section 10018.17 is added to the
Business and Professions Code, to read:
10018.17. (a) "Exclusive agency listing" means an "exclusive
right to sell listing" in which the owner reserves the right to sell
directly but not through any other broker and, in that event, without
obligation to pay compensation to the broker.
(b) This section shall become operative on July 1, 2018.
SEC. 49. Section 10018.18 is added to the
Business and Professions Code, to read:
10018.18. (a) "Open listing" means a listing agreement which
grants no exclusive rights or priorities to the listing broker, and
the agreed commission is payable to the broker only if the listing
broker obtains and presents to the owner an enforceable offer from a
ready, able, and willing buyer on the terms authorized by the listing
agreement which is accepted by the owner, before the property is
otherwise sold either through another broker or by the owner directly
and before the listing agreement expires by its terms or is revoked.
(b) This section shall become operative on July 1, 2018.
SEC. 50. SEC. 14. Section 10023 of
the Business and Professions Code is amended to read:
10023. (a) "Mineral, oil,
and gas licensee" refers to means a
person licensed under Chapter 7 (commencing with Section 10500) of
this part.
(b) This section shall repeal on July 1, 2018.
SEC. 51. Section 10023 is added to the Business
and Professions Code, to read:
10023. (a) "Mineral, oil, and gas licensee" means a person
licensed under Chapter 7 (commencing with Section 10500) of this
part.
(b) This section shall become operative on July 1, 2018.
SEC. 52. SEC. 15. Section 10024 of
the Business and Professions Code is amended to read:
10024. (a) "Mineral, oil,
and gas broker" refers to means a
person licensed as a broker under Chapter 7 of this part.
(b) This section shall repeal on July 1, 2018.
SEC. 53. Section 10024 is added to the Business
and Professions Code, to read:
10024. (a) "Mineral, oil, and gas broker" means a person licensed
as a broker under Chapter 7 of this part.
(b) This section shall become operative on July 1, 2018.
SEC. 54. Section 10026 of the Business and
Professions Code is amended to read:
10026. (a) The term "advance fee," as used in this part, is a
fee, regardless of the form, that is claimed, demanded, charged,
received, or collected by a licensee for services requiring a
license, or for a listing, as that term is defined in Section 10027,
before fully completing the service the licensee contracted to
perform or represented would be performed. Neither an advance fee nor
the services to be performed shall be separated or divided into
components for the purpose of avoiding the application of this
division.
(b) For the purposes of this section, the term "advance fee" does
not include:
(1) "Security" as that term is used in Section 1950.5 of the Civil
Code.
(2) A "screening fee" as that term is used in Section 1950.6 of
the Civil Code.
(3) A fee that is claimed, demanded, charged, received, or
collected for the purpose of advertising the sale, lease, or exchange
of real estate, or of a business opportunity, in a newspaper of
general circulation, any other written publication, or through
electronic media comparable to any type of written publication,
provided that the electronic media or the publication is not under
the control or ownership of the broker.
(4) A fee earned for a specific service under a "limited service"
contract. For purposes of this section, a "limited service" contract
is a written agreement for real estate services described in
subdivision (a), (b), or (c) of Section 10131, and pursuant to which
such services are promoted, advertised, or presented as stand-alone
services, to be performed on a task-by-task basis, and for which
compensation is received as each separate, contracted-for task is
completed. To qualify for this exclusion, all services performed
pursuant to the contract must be described in subdivision (a), (b),
or (c) of Section 10131.
(c) A contract between a real estate broker and a principal that
requires payment of a commission to the broker after the contract is
fully performed does not represent an agreement for an advance fee.
(d) This section does not exempt from regulation the charging or
collecting of a fee under Section 1950.5 or 1950.6 of the Civil Code,
but instead regulates fees that are not subject to those sections.
(e) This section shall repeal on July 1, 2018.
SEC. 55. Section 10026 is added to the Business
and Professions Code, to read:
10026. (a) The term "advance fee," as used in this part, is a
fee, regardless of the form, that is claimed, demanded, charged,
received, or collected by a licensee for services requiring a
license, or for a listing agreement, as that term is defined in
Section 10027, before fully completing the service the licensee
contracted to perform or represented would be performed. Neither an
advance fee nor the services to be performed shall be separated or
divided into components for the purpose of avoiding the application
of this division.
(b) For the purposes of this section, the term "advance fee" does
not include:
(1) "Security" as that term is used in Section 1950.5 of the
Civil Code.
(2) A "screening fee" as that term is used in Section 1950.6 of
the Civil Code.
(3) A fee that is claimed, demanded, charged, received, or
collected for the purpose of advertising the sale, lease, or exchange
of real estate, or of a business opportunity, in a newspaper of
general circulation, any other written publication, or through
electronic media comparable to any type of written publication,
provided that the electronic media or the publication is not under
the control or ownership of the broker.
(4) A fee earned for a specific service under a "limited service"
contract. For purposes of this section, a "limited service" contract
is a written agreement for real estate services described in
subdivision (a), (b), or (c) of Section 10131, and pursuant to which
such services are promoted, advertised, or presented as stand-alone
services, to be performed on a task-by-task basis, and for which
compensation is received as each separate, contracted-for task is
completed. To qualify for this exclusion, all services performed
pursuant to the contract shall be described in subdivision (a), (b),
or (c) of Section 10131.
(5) A fee approved by the bureau pursuant to Section 10085.
(c) A contract between a real estate broker and a principal that
requires payment of a commission to the broker after the contract is
fully performed does not represent an agreement for an advance fee.
(d) This section does not exempt from regulation the charging or
collecting of a fee under Section 1950.5 or 1950.6 of the Civil Code,
but instead regulates fees that are not subject to those sections.
(e) This section shall become operative on July 1, 2018.
SEC. 56. SEC. 16. Section 10027 of
the Business and Professions Code is amended to read:
10027. (a) The term
"listing" as used in this part includes, but is not limited to:
(1)
(a) The name or a list of the names, of the owners,
landlords, exchangers, or lessors, or the location or locations, of
property, or of an interest in property, offered for rent, sale,
lease, or exchange.
(2)
(b) The name, or a list of the names, or the location
or locations at which prospective or potential purchasers, buyers,
lessees, tenants or exchangers of property may be found or contacted.
(3)
(c) An agreement by which a person who is engaged in
the business of promoting the sale or lease of business opportunities
or real estate agrees to render to an owner or lessee of such
property any services, to promote the sale or lease of said property.
(4)
(d) An agreement by which a person who is engaged in
the business of finding, locating or promoting the sale or lease of
business opportunities or real estate, agrees to circularize, notify
or refer real estate brokers or salesmen
salesperson to said property which is offered for sale or lease.
(b) This section shall repeal on July 1, 2018.
SEC. 57. Section 10027 is added to the Business
and Professions Code, to read:
10027. (a) The term "listing agreement" as used in this part
includes, but is not limited to:
(1) The name or a list of the names, of the owners, landlords,
exchangers, or lessors, or the location or locations, of property, or
of an interest in property, offered for rent, sale, lease, or
exchange.
(2) The name, or a list of the names, or the location or locations
at which prospective or potential buyers, lessees, tenants, or
exchangers of property may be found or contacted.
(3) An agreement by which a person who is engaged in the business
of promoting the sale or lease of business opportunities or real
estate agrees to render to an owner or lessee of such property any
services, to promote the sale or lease of said property.
(4) An agreement by which a person who is engaged in the business
of finding, locating, or promoting the sale or lease of business
opportunities or real estate, agrees to circularize, notify, or refer
real estate brokers or salespersons to said property which is
offered for sale or lease.
(b) This section shall become operative on July 1, 2018.
SEC. 58. Section 10050 of the Business and
Professions Code is amended to read:
10050. (a) There is in the Department of Consumer Affairs a
Bureau of Real Estate, the chief officer of which bureau is named the
Real Estate Commissioner.
(b) It shall be the principal responsibility of the commissioner
to enforce all laws in this part (commencing with Section 10000) and
Chapter 1 (commencing with Section 11000) of Part 2 of this division
in a manner that achieves the maximum protection for the purchasers
of real property and those persons dealing with real estate
licensees.
(c) Wherever the term "commissioner" is used in this division, it
means the Real Estate Commissioner.
(d) This section shall repeal on July 1, 2018.
SEC. 59. Section 10050 is added to the Business
and Professions Code, to read:
10050. (a) There is in the Department of Consumer Affairs a
Bureau of Real Estate, the chief officer of which bureau is named the
Real Estate Commissioner.
(b) It shall be the principal responsibility of the commissioner
to enforce all laws in this part (commencing with Section 10000) and
Chapter 1 (commencing with Section 11000) of Part 2 of this division
in a manner that achieves the maximum protection for the buyers of
real property and those persons dealing with real estate licensees.
(c) Wherever the term "commissioner" is used in this division, it
means the Real Estate Commissioner.
(d) This section shall become operative on July 1, 2018.
SEC. 60. SEC. 17. Section 10074 of
the Business and Professions Code is amended to read:
10074. (a) After qualifying
as such neither the commissioner nor any of the deputies,
clerks clerks, or employees of the department
shall be interested in any mineral, oil oil,
or gas business, mineral, oil oil,
or gas brokerage firm, real estate company or any real estate
brokerage firm, as director, stockholder, officer, member, agent or
employee, or act as a broker or salesman,
salesperson, or act as a co-partner or agent for any broker or
brokers, salesman or salesmen. or salesperson
or salespersons.
(b) This section shall repeal on July 1, 2018.
SEC. 61. Section 10074 is added to the Business
and Professions Code, to read:
10074. (a) After qualifying as such neither the commissioner nor
any of the deputies, clerks or employees of the department shall be
interested in any mineral, oil, or gas business, mineral, oil, or gas
brokerage firm, real estate company or any real estate brokerage
firm, as director, stockholder, officer, member, agent, or employee,
or act as a broker or salesperson, or act as a copartner or agent for
any broker or brokers, salesperson or salespersons.
(b) This section shall become operative on July 1, 2018.
SEC. 62. SEC. 18. Section 10080.9 of
the Business and Professions Code is amended to read:
10080.9. (a) If, upon inspection, examination, or investigation,
the commissioner has cause to believe that a person who does not
possess a real estate license is engaged or has engaged in activities
for which a real estate license is required, or that a person who
does not possess a prepaid rental listing service license or a real
estate broker license is engaged or has engaged in activities for
which a license is required pursuant to Section 10167.2, or that a
licensee is violating or has violated any provision of this division
or any rule or order thereunder, the commissioner or his or her
designated representative may issue a citation to that person in
writing, describing with particularity the basis of the citation.
Each citation may contain an order to correct the violation or
violations identified and a reasonable time period or periods by
which the violation or violations must be corrected. In addition,
each citation may assess an administrative fine not to exceed two
thousand five hundred dollars ($2,500), which shall be deposited into
the Recovery Account of the Real Estate Fund and shall, upon
appropriation by the Legislature, be available for expenditure for
the purposes specified in Chapter 6.5 (commencing with Section
10470). In assessing a fine, the commissioner shall give due
consideration to the appropriateness of the amount of the fine with
respect to factors such as the gravity of the violation, the good
faith of the person cited, and the history of previous violations. A
citation issued and a fine assessed pursuant to this section, while
constituting discipline for a violation of the law, shall be in lieu
of other administrative discipline by the commissioner for the
offense or offenses cited, and the citation against and payment of
any fine by a licensee shall not be reported as disciplinary action
taken by the commissioner.
(b) Notwithstanding subdivision (a), nothing in this section shall
prevent the commissioner from issuing an order to desist and refrain
from engaging in a specific business activity or activities or an
order to suspend all business operations to a person who is engaged
in or has engaged in continued or repeated violations of this part.
In any of these circumstances, the sanctions authorized under this
section shall be separate from, and in addition to, all other
administrative, civil, or criminal penalties.
(c) If, within 30 days from the receipt of the citation or the
citation and fine, the person cited fails to notify the commissioner
that he or she intends to request a hearing as described in
subdivision (d), the citation or the citation and fine shall be
deemed final.
(d) Any hearing under this section shall be conducted in
accordance with Chapter 5 (commencing with Section 11500) of Part 1
of Division 3 of Title 2 of the Government Code.
(e) After the exhaustion of the review procedures provided for in
this section, the commissioner may apply to the appropriate superior
court for a judgment in the amount of any administrative penalty
imposed pursuant to subdivision (a) and an order compelling the
cited person person cited to comply
with the order of the commissioner. The application, which shall
include a certified copy of the final order of the commissioner,
shall constitute a sufficient showing to warrant the
issuance of issuing the judgment and order.
(f) Failure of any person to comply with the terms of a citation
or pay a fine assessed pursuant to this section, within a reasonable
period specified by the commissioner, shall subject that person to
disciplinary action by the commissioner. In no event may a license be
issued or renewed if an unpaid fine remains outstanding
or the terms of a citation have not been complied with.
(g) This section shall repeal on July 1, 2018.
SEC. 63. Section 10080.9 is added to the
Business and Professions Code, to read:
10080.9. (a) If, upon inspection, examination, or investigation,
the commissioner has cause to believe that a person who does not
possess a real estate license is engaged or has engaged in activities
for which a real estate license is required, or that a person who
does not possess a prepaid rental listing service license or a real
estate broker license is engaged or has engaged in activities for
which a license is required pursuant to Section 10167.2, or that a
licensee is violating or has violated any provision of this division
or any rule or order thereunder, the commissioner or his or her
designated representative may issue a citation to that person in
writing, describing with particularity the basis of the citation.
Each citation may contain an order to correct the violation or
violations identified and a reasonable time period or periods by
which the violation or violations must be corrected. In addition,
each citation may assess an administrative fine not to exceed two
thousand five hundred dollars ($2,500), that shall be deposited into
the Recovery Account of the Real Estate Fund and shall, upon
appropriation by the Legislature, be available for expenditure for
the purposes specified in Chapter 6.5 (commencing with Section
10470). In assessing a fine, the commissioner shall give due
consideration to the appropriateness of the amount of the fine with
respect to factors such as the gravity of the violation, the good
faith of the person cited, and the history of previous violations. A
citation issued and a fine assessed pursuant to this section, while
constituting discipline for a violation of the law, shall be in lieu
of other administrative discipline by the commissioner for the
offense or offenses cited, and the citation against and payment of
any fine by a licensee shall not be reported as disciplinary action
taken by the commissioner.
(b) Notwithstanding subdivision (a), nothing in this section shall
prevent the commissioner from issuing an order to desist and refrain
from engaging in a specific business activity or activities or an
order to suspend all business operations to a person who is engaged
in or has engaged in continued or repeated violations of this part.
In any of these circumstances, the sanctions authorized under this
section shall be separate from, and in addition to, all other
administrative, civil, or criminal penalties.
(c) If, within 30 days from the receipt of the citation or the
citation and fine, the person cited fails to notify the commissioner
that he or she intends to request a hearing as described in
subdivision (d), the citation or the citation and fine shall be
deemed final.
(d) Any hearing under this section shall be conducted in
accordance with Chapter 5 (commencing with Section 11500) of Part 1
of Division 3 of Title 2 of the Government Code.
(e) After the exhaustion of the review procedures provided for in
this section, the commissioner may apply to the appropriate superior
court for a judgment in the amount of any administrative penalty
imposed pursuant to subdivision (a) and an order compelling the
person cited to comply with the order of the commissioner. The
application, which shall include a certified copy of the final order
of the commissioner, shall constitute a sufficient showing to warrant
issuing the judgment and order.
(f) Failure of any person to comply with the terms of a citation
or pay a fine assessed pursuant to this section, within a reasonable
period specified by the commissioner, shall subject that person to
disciplinary action by the commissioner. In no event may a license be
issued or renewed if an unpaid fine remains outstanding or the terms
of a citation have not been complied with.
(g) This section shall become operative on July 1, 2018.
SEC. 64. SEC. 19. Section 10082 of
the Business and Professions Code is amended to read:
10082. (a) The commissioner
may publish or cause to be published at appropriate intervals a
directory or list of licensed brokers and salesmen
salespersons and may publish therewith such matter as he
may deem pertinent to this part and Chapter 1 (commencing with
Section 11000) of Part 2. He shall furnish one copy of such directory
to each licensed broker upon his request and the payment of an
appropriate charge based upon cost of publication. Such directory may
contain copies of the Real Estate Law, Chapter 1 (commencing with
Section 11000) of Part 2 of Division 4 of the Business and
Professions Code, and the Rules and Regulations of the Real Estate
Commissioner.
(b) This section shall repeal on July 1, 2018.
SEC. 65. Section 10082 is added to the Business
and Professions Code, to read:
10082. (a) The commissioner may publish or cause to be published
at appropriate intervals a directory or list of licensed brokers and
salespersons and may publish therewith such matter as he may deem
pertinent to this part and Chapter 1 (commencing with Section 11000)
of Part 2. He shall furnish one copy of such directory to each
licensed broker upon his request and the payment of an appropriate
charge based upon cost of publication. Such directory may contain
copies of the Real Estate Law, Chapter 1 (commencing with Section
11000) of Part 2 of Division 4 of the Business and Professions Code,
and the Rules and Regulations of the Real Estate Commissioner.
(b) This section shall become operative on July 1, 2018.
SEC. 66. Section 10131.01 of the Business and
Professions Code is amended to read:
10131.01. (a) Subdivision (b) of Section 10131 does not apply to
(1) the manager of a hotel, motel, auto and trailer park, to the
resident manager of an apartment building, apartment complex, or
court, or to the employees of that manager, or (2) any person or
entity, including a person employed by a real estate broker, who, on
behalf of another or others, solicits or arranges, or accepts
reservations or money, or both, for transient occupancies described
in paragraphs (1) and (2) of subdivision (b) of Section 1940 of the
Civil Code, in a dwelling unit in a common interest development, as
defined in Section 4100 of the Civil Code, in a dwelling unit in an
apartment building or complex, or in a single-family home, or (3) any
person other than the resident manager or employees of that manager,
performing the following functions, who is the employee of the
property management firm retained to manage a residential apartment
building or complex or court and who is performing under the
supervision and control of a broker of record who is an employee of
that property management firm or a salesperson licensed to the broker
who meets certain minimum requirements as specified in a regulation
issued by the commissioner:
(A) Showing rental units and common areas to prospective tenants.
(B) Providing or accepting preprinted rental applications, or
responding to inquiries from a prospective tenant concerning the
completion of the application.
(C) Accepting deposits or fees for credit checks or administrative
costs and accepting security deposits and rents.
(D) Providing information about rental rates and other terms and
provisions of a lease or rental agreement, as set out in a schedule
provided by an employer.
(E) Accepting signed leases and rental agreements from prospective
tenants.
(b) A broker or salesperson shall exercise reasonable supervision
and control over the activities of nonlicensed persons acting under
paragraph (3) of subdivision (a).
(c) A broker employing nonlicensed persons to act under paragraph
(3) of subdivision (a) shall comply with Section 10163 for each
apartment building or complex or court where the nonlicensed persons
are employed.
(d) This section shall repeal on July 1, 2018.
SEC. 67. Section 10131.01 is added to the
Business and Professions Code, to read:
10131.01. (a) Subdivision (b) of Section 10131 does not apply to
(1) the manager of a hotel, motel, auto and trailer park, to the
resident manager of an apartment building, apartment complex, or
court, or to the employees of that manager, or (2) any person or
entity, including a person retained by a real estate broker, who, on
behalf of another or others, solicits or arranges, or accepts
reservations or money, or both, for transient occupancies described
in paragraphs (1) and (2) of subdivision (b) of Section 1940 of the
Civil Code, in a dwelling unit in a common interest development, as
defined in Section 4100 of the Civil Code, in a dwelling unit in an
apartment building or complex, or in a single-family home, or (3) any
person other than the resident manager or employees of that manager,
performing the following functions, who is the employee of the
property management firm retained to manage a residential apartment
building or complex or court and who is performing under the
supervision and control of a broker of record who is an employee of
that property management firm or a salesperson licensed to the broker
who meets certain minimum requirements as specified in a regulation
issued by the commissioner:
(A) Showing rental units and common areas to prospective tenants.
(B) Providing or accepting preprinted rental applications, or
responding to inquiries from a prospective tenant concerning the
completion of the application.
(C) Accepting deposits or fees for credit checks or administrative
costs and accepting security deposits and rents.
(D) Providing information about rental rates and other terms and
provisions of a lease or rental agreement, as set out in a schedule
provided by an employer.
(E) Accepting signed leases and rental agreements from prospective
tenants.
(b) A broker or salesperson shall exercise reasonable supervision
and control over the activities of nonlicensed persons acting under
paragraph (3) of subdivision (a).
(c) A broker employing nonlicensed persons to act under paragraph
(3) of subdivision (a) shall comply with Section 10163 for each
apartment building or complex or court where the nonlicensed persons
are employed.
(e) This section shall become operative on July 1, 2018.
SEC. 68. SEC. 20. Section 10132 of
the Business and Professions Code is amended to read:
10132. (a) A real estate
salesman salesperson within the meaning
of this part is a natural person who, for a compensation or in
expectation of a compensation, is employed by a licensed real estate
broker to do one or more of the acts set forth in Sections 10131,
10131.1, 10131.2, 10131.3, 10131.4, and 10131.6.
(b) This section shall repeal on July 1, 2018.
SEC. 69. Section 10132 is added to the Business
and Professions Code, to read:
10132. (a) A real estate salesperson within the meaning of this
part is a natural person who, for a compensation or in expectation of
a compensation, is retained by a licensed real estate broker to do
one or more of the acts set forth in Sections 10131, 10131.1,
10131.2, 10131.3, 10131.4, and 10131.6.
(b) This section shall become operative on July 1, 2018.
SEC. 70. SEC. 21. Section 10133.1 of
the Business and Professions Code is amended to read:
10133.1. (a) Subdivisions (d) and (e) of Section 10131, Section
10131.1, Article 5 (commencing with Section 10230), and Article 7
(commencing with Section 10240) of this code and Section 1695.13 of
the Civil Code do not apply to any of the following:
(1) Any person or employee thereof doing business under any law of
this state, any other state, or the United States relating to banks,
trust companies, savings and loan associations, industrial loan
companies, pension trusts, credit unions, or insurance companies.
(2) Any nonprofit cooperative association organized under Chapter
1 (commencing with Section 54001) of Division 20 of the Food and
Agricultural Code, in loaning or advancing money in connection with
any activity mentioned therein.
(3) Any corporation, association, syndicate, joint stock company,
or partnership engaged exclusively in the business of marketing
agricultural, horticultural, viticultural, dairy, livestock, poultry,
or bee products on a cooperative nonprofit basis, in loaning or
advancing money to the members thereof or in connection with any
business of that type.
(4) Any corporation securing money or credit from any federal
intermediate credit bank organized and existing pursuant to the
provisions of an act of Congress entitled the "Agricultural Credits
Act of 1923," in loaning or advancing money or credit so secured.
(5) Any person licensed to practice law in this state, not
actively and principally engaged in the business of negotiating loans
secured by real property, when that person renders services in the
course of his or her practice as an attorney at law, and the
disbursements of that person, whether paid by the borrower or other
person, are not charges or costs and expenses regulated by or subject
to the limitations of Article 7 (commencing with Section 10240), and
the fees and disbursements are not shared, directly or indirectly,
with the person negotiating the loan or the lender.
(6) Any person licensed as a finance lender when acting under the
authority of that license.
(7) Any cemetery authority as defined by Section 7018 of the
Health and Safety Code, that is authorized to do business in this
state or its authorized agent.
(8) Any
person authorized in writing by a savings institution to act as an
agent of that institution, as authorized by Section 6520 of the
Financial Code or comparable authority of the Office of
Thrift Supervision the Comptroller of the Currency
of the United States Department of the Treasury by its
regulations, when acting under the authority of that written
authorization.
(9) Any person who is licensed as a securities broker or
securities dealer under any law of this state, or of the United
States, or any employee, officer, or agent of that person, if that
person, employee, officer, or agent is acting within the scope of
authority granted by that license in connection with a transaction
involving the offer, sale, purchase, or exchange of a security
representing an ownership interest in a pool of promissory notes
secured directly or indirectly by liens on real property, which
transaction is subject to any law of this state or the United States
regulating the offer or sale of securities.
(10) Any person licensed as a residential mortgage lender or
servicer when acting under the authority of that license.
(11) Any organization that has been approved by the United States
Department of Housing and Urban Development pursuant to Section 106
(a)(1)(iii) of the federal Housing and Urban Development Act of 1968
(12 U.S.C. Sec. 1701x), to provide counseling services, or an
employee of such an organization, when those services are provided at
no cost to the borrower and are in connection with the modification
of the terms of a loan secured directly or collaterally by a lien on
residential real property containing four or fewer dwelling units.
(b) Persons described in paragraph (1), (2), or (3), as follows,
are exempt from the provisions of subdivisions (d) and (e) of Section
10131 or Section 10131.1 with respect to the collection of payments
or performance of services for lenders or on notes of owners in
connection with loans secured directly or collaterally by liens on
real property:
(1) The person makes collections on 10 or less of those loans, or
in amounts of forty thousand dollars ($40,000) or less, in any
calendar year.
(2) The person is a corporation licensed as an escrow agent under
Division 6 (commencing with Section 17000) of the Financial Code and
the payments are deposited and maintained in the escrow agent's trust
account.
(3) An employee of a real estate broker who is acting as the agent
of a person described in paragraph (4) of subdivision (b) of Section
10232.4.
For purposes of this subdivision, performance of services does not
include soliciting borrowers, lenders, or purchasers for, or
negotiating, loans secured directly or collaterally by a lien on real
property.
(c) (1) Subdivision (d) of Section 10131 does not apply to an
employee of a real estate broker who, on behalf of the broker,
assists the broker in meeting the broker's obligations to its
customers in residential mortgage loan transactions, as defined in
Section 50003 of the Financial Code, where the lender is an
institutional lender, as defined in Section 50003 of the Financial
Code, provided the employee does not participate in any negotiations
occurring between the principals.
(2) A broker shall exercise reasonable supervision and control
over the activities of nonlicensed employees acting under this
subdivision, and shall comply with Section 10163 for each location
where the nonlicensed persons are employed.
This section does not restrict the ability of the commissioner to
discipline a broker or corporate broker licensee or its designated
officer, or both the corporate broker licensee and its designated
officer, for misconduct of a nonlicensed employee acting under this
subdivision, or, pursuant to Section 10080, to adopt, amend, or
repeal rules or regulations governing the employment or supervision
of an employee who is a nonlicensed person as described in this
subdivision.
(d) This section shall repeal on July 1, 2018.
SEC. 71. Section 10133.1 is added to the
Business and Professions Code, to read:
10133.1. (a) Subdivisions (d) and (e) of Section 10131, Section
10131.1, Article 5 (commencing with Section 10230), and Article 7
(commencing with Section 10240) of this code and Section 1695.13 of
the Civil Code do not apply to any of the following:
(1) Any person or employee thereof doing business under any law of
this state, any other state, or the United States relating to banks,
trust companies, savings and loan associations, industrial loan
companies, pension trusts, credit unions, or insurance companies.
(2) Any nonprofit cooperative association organized under Chapter
1 (commencing with Section 54001) of Division 20 of the Food and
Agricultural Code, in loaning or advancing money in connection with
any activity mentioned therein.
(3) Any corporation, association, syndicate, joint stock company,
or partnership engaged exclusively in the business of marketing
agricultural, horticultural, viticultural, dairy, livestock, poultry,
or bee products on a cooperative nonprofit basis, in loaning or
advancing money to the members thereof or in connection with any
business of that type.
(4) Any corporation securing money or credit from any federal
intermediate credit bank organized and existing pursuant to the
provisions of an act of Congress entitled the "Agricultural Credits
Act of 1923," in loaning or advancing money or credit so secured.
(5) Any person licensed to practice law in this state, not
actively and principally engaged in the business of negotiating loans
secured by real property, when that person renders services in the
course of his or her practice as an attorney at law, and the
disbursements of that person, whether paid by the borrower or other
person, are not charges or costs and expenses regulated by or subject
to the limitations of Article 7 (commencing with Section 10240), and
the fees and disbursements are not shared, directly or indirectly,
with the person negotiating the loan or the lender.
(6) Any person licensed as a finance lender when acting under the
authority of that license.
(7) Any cemetery authority as defined by Section 7018 of the
Health and Safety Code, that is authorized to do business in this
state or its authorized agent.
(8) Any person authorized in writing by a savings institution to
act as an agent of that institution, as authorized by Section 6520 of
the Financial Code or comparable authority of the Office of the
Comptroller of the Currency of the United States Department of the
Treasury by its regulations, when acting under the authority of that
written authorization.
(9) Any person who is licensed as a securities broker or
securities dealer under any law of this state, or of the United
States, or any employee, officer, or agent of that person, if that
person, employee, officer, or agent is acting within the scope of
authority granted by that license in connection with a transaction
involving the offer, sale, purchase, or exchange of a security
representing an ownership interest in a pool of promissory notes
secured directly or indirectly by liens on real property, which
transaction is subject to any law of this state or the United States
regulating the offer or sale of securities.
(10) Any person licensed as a mortgage loan lender or servicer
when acting under the authority of that license.
(11) Any organization that has been approved by the United States
Department of Housing and Urban Development pursuant to Section 106
(a)(1)(iii) of the federal Housing and Urban Development Act of 1968
(12 U.S.C. Sec. 1701x), to provide counseling services, or an
employee of such an organization, when those services are provided at
no cost to the borrower and are in connection with the modification
of the terms of a loan secured directly or collaterally by a lien on
residential real property containing four or fewer dwelling units.
(b) Persons described in paragraph (1), (2), or (3), as follows,
are exempt from the provisions of subdivisions (d) and (e) of Section
10131 or Section 10131.1 with respect to the collection of payments
or performance of services for lenders or on notes of owners in
connection with loans secured directly or collaterally by liens on
real property:
(1) The person makes collections on 10 or less of those loans, or
in amounts of forty thousand dollars ($40,000) or less, in any
calendar year.
(2) The person is a corporation licensed as an escrow agent under
Division 6 (commencing with Section 17000) of the Financial Code and
the payments are deposited and maintained in the escrow agent's trust
account.
(3) An employee of a real estate broker who is acting as the agent
of a person described in paragraph (4) of subdivision (b) of Section
10232.4.
For purposes of this subdivision, performance of services does not
include soliciting borrowers, lenders, or purchasers for, or
negotiating, loans secured directly or collaterally by a lien on real
property.
(c) (1) Subdivision (d) of Section 10131 does not apply to an
employee of a real estate broker who, on behalf of the broker,
assists the broker in meeting the broker's obligations to its
customers in residential mortgage loan transactions, as defined in
Section 50003 of the Financial Code, where the lender is an
institutional lender, as defined in Section 50003 of the Financial
Code, provided the employee does not participate in any negotiations
occurring between the principals.
(2) A broker shall exercise reasonable supervision and control
over the activities of nonlicensed employees acting under this
subdivision, and shall comply with Section 10163 for each location
where the nonlicensed persons are employed.
This section does not restrict the ability of the commissioner to
discipline a broker or corporate broker licensee or its designated
officer, or both the corporate broker licensee and its designated
officer, for misconduct of a nonlicensed employee acting under this
subdivision, or, pursuant to Section 10080, to adopt, amend, or
repeal rules or regulations governing the employment or supervision
of an employee who is a nonlicensed person as described in this
subdivision.
(d) This section shall become operative on July 1, 2018.
SEC. 72. SEC. 22. Section 10136 of
the Business and Professions Code is amended to read:
10136. (a) No person
engaged in the business or acting in the capacity of a real estate
broker or a real estate salesman salesperson
within this State state shall
bring or maintain any action in the courts of this State
state for the collection of compensation for the
performance of any of the acts mentioned in this article without
alleging and proving that he or she was a duly licensed
real estate broker or real estate salesman
salesperson at the time the alleged cause of action arose.
(b) This section shall repeal on July 1, 2018.
SEC. 73. Section 10136 is added to the Business
and Professions Code, to read:
10136. (a) No person engaged in the business or acting in the
capacity of a real estate broker or a real estate salesperson within
this state shall bring or maintain any action in the courts of this
state for the collection of compensation for the performance of any
of the acts mentioned in this article without alleging and proving
that he was a duly licensed real estate broker or real estate
salesperson at the time the alleged cause of action arose.
(b) This section shall become operative on July 1, 2018.
SEC. 74. SEC. 23. Section 10137 of
the Business and Professions Code is amended to read:
10137. (a) It is unlawful
for any licensed real estate broker to employ or compensate, directly
or indirectly, any person for performing any of the acts within the
scope of this chapter who is not a licensed real estate broker, or a
real estate salesperson licensed under the broker employing or
compensating him or her, or to employ or compensate, directly or
indirectly, any licensee for engaging in any activity for which a
mortgage loan originator license endorsement is required, if that
licensee does not hold a mortgage loan originator license
endorsement; provided, however, that a licensed real estate broker
may pay a commission to a broker of another state.
(b) No
No real estate salesperson shall be employed by or
accept compensation for activity requiring a real estate license
from any person other than the broker under whom he or she is
at the time licensed.
(c) It
It is unlawful for any licensed real estate salesperson
to pay any compensation for performing any of the acts within the
scope of this chapter to any real estate licensee except through the
broker under whom he or she is at the time licensed.
(d) For
For a violation of any of the provisions of this
section, the commissioner may temporarily suspend or permanently
revoke the license of the real estate licensee, in accordance with
the provisions of this part relating to hearings.
(e) This section shall repeal on July 1, 2018.
SEC. 75. Section 10137 is added to the Business
and Professions Code, to read:
10137. (a) It is unlawful for any licensed real estate broker to
compensate, directly or indirectly, any person for performing any of
the acts within the scope of this chapter who is not a licensed real
estate broker, or a real estate salesperson licensed under the broker
affiliated with that broker or to compensate, directly or indirectly
that person's broker, any licensee for engaging in any activity for
which a mortgage loan originator license endorsement is required, if
that licensee does not hold a mortgage loan originator license
endorsement; provided, however, that a licensed real estate broker
may pay a commission to a broker of another state.
(b) No real estate salesperson shall accept compensation for
activity requiring a real estate license from any person other than
the broker under whom he or she is at the time licensed.
(c) It is unlawful for any licensed real estate salesperson to pay
any compensation for performing any of the acts within the scope of
this chapter to any real estate licensee except through the
responsible broker under whom he or she is at the time licensed. A
licensee may enter into an agreement with another licensee to share
such compensation provided that any such compensation is paid through
the responsible broker.
(d) For a violation of any of the provisions of this section, the
commissioner may temporarily suspend or permanently revoke the
license of the real estate licensee, in accordance with the
provisions of this part relating to hearings.
(e) This section shall become operative on July 1, 2018.
SEC. 76. SEC. 24. Section 10140.5 of
the Business and Professions Code is amended to read:
10140.5. (a) Each
advertisement or other statement which is published by a real estate
broker or salesman salesperson offering
to assist persons to file applications for the purchase or lease of,
or to locate or enter upon, lands owned by the state or federal
government shall, when published, indicate the name of the broker for
whom it is published and state that he the
broker is licensed as a real estate broker by the State of
California.
(b) This section shall repeal on July 1, 2018.
SEC. 77. Section 10140.5 is added to the
Business and Professions Code, to read:
10140.5. (a) Each advertisement or other statement which is
published by a real estate broker or salesperson offering to assist
persons to file applications for the purchase or lease of, or to
locate or enter upon, lands owned by the state or federal government
shall, when published, indicate the name of the broker for whom it is
published and state that he is licensed as a real estate broker by
the State of California.
(b) This section shall become operative on July 1, 2018.
SEC. 78. Section 10142 of the Business and
Professions Code is amended to read:
10142. (a) When a licensee prepares or has prepared an agreement
authorizing or employing such licensee to perform any of the acts for
which he is required to hold a license, or when such licensee
secures the signature of any person to any contract pertaining to
such services or transaction, he shall deliver a copy of the
agreement to the person signing it at the time the signature is
obtained.
(b) This section shall repeal on July 1, 2018.
SEC. 79. Section 10142 is added to the Business
and Professions Code, to read:
10142. (a) When a licensee prepares or has prepared an agreement
authorizing or retaining such licensee to perform any of the acts for
which he is required to hold a license, or when such licensee
secures the signature of any person to any contract pertaining to
such services or transaction, he shall deliver a copy, either in
printed or electronic format, of the agreement to the person signing
it as soon as practicable after the time the signature is obtained.
(b) This section shall become operative on July 1, 2018.
SEC. 80. SEC. 25. Section 10143.5 of
the Business and Professions Code is amended to read:
10143.5. (a) Any real
estate broker who assists another or others, or whose real estate
salesmen salespersons assist another or
others, for a compensation, in filing an application for the
purchase or lease of, or in locating or entering upon, lands owned by
the State or Federal Government state or
federal government shall report to the commissioner the names
and addresses of all persons he or his salesmen
salespersons have assisted in filing applications for land
owned by the State or Federal Government
state or federal government and the amount of compensation
received from such persons. The report shall be filed quarterly
within 10 days after the end of each calendar quarter.
(b) This section shall repeal on July 1, 2018.
SEC. 81. Section 10143.5 is added to the
Business and Professions Code, to read:
10143.5. (a) Any real estate broker who assists another or
others, or whose real estate salespersons assist another or others,
for a compensation, in filing an application for the purchase or
lease of, or in locating or entering upon, lands owned by the state
or federal government shall report to the commissioner the names and
addresses of all persons he or his salespersons have assisted in
filing applications for land owned by the state or federal government
and the amount of compensation received from such persons. The
report shall be filed quarterly within 10 days after the end of each
calendar quarter.
(b) This section shall become operative on July 1, 2018.
SEC. 82. SEC. 26. Section 10144 of
the Business and Professions Code is amended to read:
10144. (a) The commissioner
may prescribe by regulation the information which shall be contained
in contracts or other agreements by a real estate broker, or a real
estate salesman, salesperson, to assist
another or others in filing an application for the purchase or lease
of, or in locating or entering upon, lands owned by the
State or Federal Government, state or federal
government, including, but not limited to, information with
regard to the services agreed to be performed and information with
regard to the hazards which may prevent the person to be assisted in
filing an application with the State or Federal Government
state or federal government ever receiving any
state or federal land under the application.
(b) This section shall repeal on July 1, 2018.
SEC. 83. Section 10144 is added to the Business
and Professions Code, to read:
10144. (a) The commissioner may prescribe by regulation the
information which shall be contained in contracts or other agreements
by a real estate broker, or a real estate salesperson, to assist
another or others in filing an application for the purchase or lease
of, or in locating or entering upon, lands owned by the state or
federal government, including, but not limited to, information with
regard to the services agreed to be performed and information with
regard to the hazards which may prevent the person to be assisted in
filing an application with the state or federal government ever
receiving any state or federal land under the application.
(b) This section shall become operative on July 1, 2018.
SEC. 84. Section 10158 of the Business and
Professions Code is amended to read:
10158. (a) When a real estate license is issued to a corporation,
if it desires any of its officers other than the officer designated
by it pursuant to Section 10211, to act under its license as a real
estate broker, it shall procure an additional license to so employ
each of such additional officers.
(b) This section shall repeal on July 1, 2018.
SEC. 85. Section 10158 is added to the Business
and Professions Code, to read:
10158. (a) When a real estate license is issued to a corporation,
if it desires any of its officers other than the officer designated
by it pursuant to Section 10211, to act under its license as a real
estate broker, it shall procure an additional license to retain each
of such additional officers. In the event of death or incapacity of a
sole designated broker-officer, a corporation may operate
continuously under its existing license if notice of the event is
filed with the bureau before midnight of the 10th day after the
event.
(b) This section shall become operative on July 1, 2018.
SEC. 86. Section 10159 of the Business and
Professions Code is amended to read:
10159. (a) Each officer of a corporation through whom it is
licensed to act as a real estate broker is, while so employed under
such license, a licensed real estate broker, but licensed only to act
as such for and on behalf of the corporation as an officer.
(b) This section shall repeal on July 1, 2018.
SEC. 87. Section 10159 is added to the Business
and Professions Code, to read:
10159. Each officer of a corporation through whom it is licensed
to act as a real estate broker need not be a licensed real estate
broker, but if not, is licensed only to act as such for and on behalf
of the corporation as an officer. This does 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
corporation shall be licensed by the bureau through qualified broker
officers, who have either passed the broker license examination and
are now qualified to obtain a broker license, or who are currently
licensed as real estate brokers. An officer of a corporation through
whom it is licensed to act need not maintain an individual broker's
license, but is otherwise subject to all duties and responsibilities
of a licensed broker.
This section shall become operative on July 1, 2018.
SEC. 88. Section 10159.6 of the Business and
Professions Code is amended to read:
10159.6. All of the following apply to use of a team name, as
defined in paragraph (5) of subdivision (a) of Section 10159.7:
(a) Notwithstanding subdivision (b) of Section 10140.6,
advertising and solicitation materials that contain a team name,
including print or electronic media and "for sale" signage, shall
include, and display in a conspicuous and prominent manner, the team
name and the name and license number of at least one of the licensed
members of the team.
(b) The responsible broker's identity, as defined in paragraph (1)
of subdivision (a) of Section 10159.7, shall be displayed as
prominently and conspicuously as the team name in all advertising and
solicitation materials.
(c) The advertising and solicitation materials shall not contain
terms that imply the existence of a real estate entity independent of
the responsible broker.
(d) Notwithstanding Section 10185, a violation of this
section is not a misdemeanor.
(e) This section shall repeal on July 1, 2018.
SEC. 89. Section 10159.6 is added to the
Business and Professions Code, to read:
10159.6. All of the following apply to use of a team name, as
defined in paragraph (3) of subdivision (a) of Section 10159.7:
(a) Notwithstanding subdivision (b) of Section 10140.6,
advertising and solicitation materials that contain a team name,
including print or electronic media and "for sale" signage, shall
include, and display in a conspicuous and prominent manner, the team
name and the name and license number of at least one of the licensed
members of the team.
(b) The responsible broker's identity shall be displayed as
prominently and conspicuously as the team name in all advertising and
solicitation materials.
(c) The advertising and solicitation materials shall not contain
terms that imply the existence of a real estate entity independent of
the responsible broker.
(d) Notwithstanding Section 10185, a violation of this section is
not a misdemeanor.
(e) This section shall become operative on July 1, 2018.
SEC. 90. Section 10159.7 of the Business and
Professions Code is amended to read:
10159.7. (a) For the purposes of this article, the following
definitions shall apply:
(1) "Responsible broker's identity" means a name and the
associated license identification number under which the responsible
broker is currently licensed by the bureau and conducts business in
general or is a substantial division of the real estate firm.
Responsible broker's identity does not include a fictitious business
name obtained pursuant to paragraph (2) of subdivision (a) of Section
10159.5 or the use of a team name pursuant to Section 10159.6.
(2) "Fictitious business name" means a professional identity or
brand name under which activity requiring a real estate license is
conducted and the use of which is subject to approval by the bureau
pursuant to Section 10159.5.
(3) "Ownership of a fictitious business name" means the right to
use, renew, and control the use of a fictitious business name
obtained in accordance with Section 10159.5.
(4) "Responsible broker" means the broker responsible for the
exercise of control and supervision of salespersons under Section
10159.2, or a licensee subject to discipline under subdivision (h) of
Section 10177 for failure to supervise activity requiring a real
estate license. The supervision of a salesperson required under this
part or any other law is limited to regulatory compliance and
consumer protection.
(5) "Team name" means a professional identity or brand name used
by a salesperson, and one or more other real estate licensees, for
the provision of real estate licensed services. Notwithstanding any
other law, the use of a team name does not require that a separate
license be issued for that name pursuant to Section 10159.5. A team
name does not constitute a fictitious business name for purposes of
this part or any other law or for purposes of filing a fictitious
business name statement with an application as required by
subdivision (a) of Section 10159.5 if all of the following apply:
(A) The name is used by two or more real estate licensees who work
together to provide licensed real estate services, or who represent
themselves to the public as being a part of a team, group, or
association to provide those services.
(B) The name includes the surname of at least one of the licensee
members of the team, group, or association in conjunction with the
term "associates," "group," or "team."
(C) The name does not include any term or terms, such as "real
estate broker," "real estate brokerage," "broker," or "brokerage" or
any other term that would lead a member of the public to believe that
the team is offering real estate brokerage services, that imply or
suggest the existence of a real estate entity independent of a
responsible broker.
(b) Nothing in this section changes a real estate broker's duties
under this division to supervise a salesperson.
(c) This section shall repeal on July 1, 2018.
SEC. 91. Section 10159.7 is added to the
Business and Professions Code, to read:
10159.7. (a) For the purposes of this article, the following
definitions shall apply:
(1) "Fictitious business name" means a professional identity or
brand name under which activity requiring a real estate license is
conducted and the use of which is subject to approval by the bureau
pursuant to Section 10159.5.
(2) "Ownership of a fictitious business name" means the right to
use, renew, and control the use of a fictitious business name
obtained in accordance with Section 10159.5.
(3) "Team name" means a professional identity or brand name used
by a salesperson, and one or more other real estate licensees, for
the provision of real estate licensed services. Notwithstanding any
other law, the use of a team name does not require that a separate
license be issued for that name pursuant to Section 10159.5. A team
name does not constitute a fictitious business name for purposes of
this part or any other law or for purposes of filing a fictitious
business name statement with an application as required by
subdivision (a) of Section 10159.5 if all of the following apply:
(A) The name is used by two or more real estate licensees who work
together to provide licensed real estate services, or who represent
themselves to the public as being a part of a team, group, or
association to provide those services.
(B) The name includes the surname of at least one of the licensee
members of the team, group, or association in conjunction with the
term "associates," "group," or "team."
(C) The name does not include any term or terms, such as "real
estate broker," "real estate brokerage," "broker," or "brokerage" or
any other term that would lead a member of the public to believe that
the team is offering real estate brokerage services, that imply or
suggest the existence of a real estate entity independent of a
responsible broker.
(b) Nothing in this section changes a real estate broker's duties
under this division to supervise a salesperson.
(c) This section shall become operative on July 1, 2018.
SEC. 92. Section 10160 of the Business and
Professions Code is amended to read:
10160. (a) The real estate salesman's license shall remain in the
possession of the licensed real estate broker employer until
canceled or until the salesman leaves the employ of the broker, and
the broker shall make his license and the licenses of his salesman
available for inspection by the commissioner or his designated
representative.
(b) This section shall repeal on July 1, 2017.
SEC. 93. SEC. 27. Section 10161.5 of
the Business and Professions Code is amended to read:
10161.5. (a) When the
holder of a real estate broker's or salesman's
salesperson's license is required to relinquish his
or her license to assume an office in local, state, or federal
government, he or she may have it reinstated at any time
within six months of termination of his or her service in
office upon payment of the appropriate renewal fee, and compliance
with the provisions of Article 2.5 (commencing with Section 10170) of
this chapter, if the relinquished license was issued four or more
years prior to his or her application for reinstatement.
(b) This section shall repeal on July 1, 2018.
SEC. 94. Section 10161.5 is added to the
Business and Professions Code, to read:
10161.5. (a) When the holder of a real estate broker's or
salesperson's license is required to relinquish his license to assume
an office in local, state, or federal government, he may have it
reinstated at any time within six months of termination of his
service in office upon payment of the appropriate renewal fee, and
compliance with the provisions of Article 2.5 (commencing with
Section 10170) of this chapter, if the relinquished license was
issued four or more years prior to his application for reinstatement.
(b) This section shall become operative on July 1, 2018.
SEC. 95. SEC. 28. Section 10161.8 of
the Business and Professions Code is amended to read:
10161.8. (a) Whenever a real estate salesman
salesperson enters the employ of a real estate broker, the
broker shall immediately notify the commissioner thereof in writing.
(b) Whenever employment of a real estate salesman
salesperson is terminated, the broker shall
immediately notify the commissioner thereof in writing.
(c) Whenever a licensee acquires a business address different from
the address shown on his or her license he or she
shall mark out the former address on the face of the license
and type or write the new main office address in ink on the reverse
side, and date and initial same.
(d) Whenever a real estate salesman
salesperson enters the employ of a new real estate broker he
or she shall mark out the name of his or her
former broker on the face of the license and type or write the name
of the new employing broker in ink on the reverse side, and date and
initial same.
(e) This section shall repeal on July 1, 2018.
SEC. 96. Section 10161.8 is added to the
Business and Professions Code, to read:
10161.8. (a) A broker and a real estate licensee shall
immediately notify the commissioner in a manner designated by the
commissioner whenever any of the following occur:
(1) A real estate licensee affiliates as an independent contractor
with or is otherwise retained by a real estate broker to conduct
licensed activities.
(2) A real estate licensee's affiliation with a broker is
terminated.
(3) A real estate licensee affiliated with or retained by a broker
acquires a business address different from the address shown on the
records maintained by the commissioner.
(4) A real estate licensee affiliates as an independent
contractor, or is otherwise retained by, a new real estate broker to
conduct licensed activities.
(b) This section shall become operative on July 1, 2018.
SEC. 97. Section 10164 of the Business and
Professions Code is amended to read:
10164. (a) An employing broker or corporate designated broker
officer may appoint a licensee as a manager of a branch office or
division of the employing broker's or employing corporate designated
broker officer's real estate business and delegate to the appointed
manager the responsibility to oversee day-to-day operations,
supervise the licensed activities of licensees, and supervise
clerical staff employed in the branch office or division.
(b) Notwithstanding subdivision (a), nothing in this section shall
be construed to limit the responsibilities of an employing broker or
a corporate designated broker officer pursuant to subdivision (h) of
Section 10177. A licensee accepting appointment as a manager shall
be subject to disciplinary action pursuant to Section 10165 for
failure to properly supervise licensed activity pursuant to
subdivision (a).
(c) Appointment of a manager shall only be made by means of a
written contract in which the manager accepts the delegated
responsibility. The appointing employing broker or corporate
designated broker officer shall retain a copy of the contract and
send a notice to the department, in a form approved by the
commissioner, identifying the appointed manager and the branch office
or division the manager is appointed to supervise.
(d) A licensee shall not be appointed as a manager if any of the
following apply:
(1) The licensee holds a restricted license.
(2) The licensee is or has been subject to an order of debarment.
(3) The licensee is a salesperson with less than two years of
full-time real estate experience within five years preceding the
appointment.
(e) Whenever an appointment of a branch manager is terminated or
changed, the employing broker or corporate designated broker officer
shall immediately notify the commissioner thereof in writing.
(f) This section shall repeal on July, 1, 2018.
SEC. 98. Section 10164 is added to the Business
and Professions Code, to read:
10164. (a) A responsible broker or corporate designated broker
officer may appoint a licensee as a manager of a branch office or
division of the broker's real estate business and delegate to the
appointed manager the responsibility to oversee day-to-day
operations, supervise the licensed activities of licensees, and
supervise clerical staff employed in the branch office or division.
(b) Notwithstanding subdivision (a), nothing in this section shall
be construed to limit the responsibilities of a responsible broker
or a designated broker corporate officer pursuant to subdivision (h)
of Section 10177. A licensee accepting appointment as a manager shall
be subject to disciplinary action pursuant to Section 10165 for
failure to properly supervise licensed activity pursuant to
subdivision (a).
(c) Appointment of a manager shall only be made by means of a
written contract in which the manager accepts the delegated
responsibility. The appointing broker shall retain a copy of the
contract and send a notice to the department, in a form approved by
the commissioner, identifying the appointed manager and the branch
office or division the manager is appointed to supervise.
(d) A licensee shall not be appointed as a manager if any of the
following apply:
(1) The licensee holds a restricted license.
(2) The licensee is or has been subject to an order of debarment.
(3) The licensee is a salesperson with less than two years of
full-time real estate experience within five years preceding the
appointment.
(e) Whenever an appointment of a branch manager is terminated or
changed, the appointing broker shall immediately notify the
commissioner thereof in writing.
(f) This section shall become operative on July 1, 2018.
SEC. 99. Section 10166.03 of the Business and
Professions Code is amended to read:
10166.03. (a) A loan processor or underwriter who does not
represent to the public, through advertising or other means of
communicating or providing information, including the use of business
cards, stationery, brochures, signs, rate lists, or other
promotional items, that the individual can or will perform any of the
activities of a mortgage loan originator shall not be required to
obtain a license endorsement as a mortgage loan originator.
(b) An individual engaging solely in loan processor or underwriter
activities shall not represent to the public, through advertising or
other means of communicating or providing information including the
use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform any
of the activities of a mortgage loan originator.
(c) An independent contractor who is employed by a mortgage loan
originator may not engage in the activities of a loan processor or
underwriter for a residential mortgage loan unless the independent
contractor loan processor or underwriter obtains and maintains an
endorsement as a mortgage loan originator under this article. Each
independent contractor loan processor or underwriter who obtains and
maintains an endorsement as a mortgage loan originator under this
article shall have and maintain a valid unique identifier issued by
the Nationwide Mortgage Licensing System and Registry.
(d) This section shall repeal on July 1, 2018.
SEC. 100. Section 10166.03 is added to the
Business and Professions Code, to read:
10166.03. (a) A loan processor or underwriter who does not
represent to the public, through advertising or other means of
communicating or providing information, including the use of business
cards, stationery, brochures, signs, rate lists, or other
promotional items, that the individual can or will perform any of the
activities of a mortgage loan originator shall not be required to
obtain a license endorsement as a mortgage loan originator.
(b) An individual engaging solely in loan processor or underwriter
activities shall not represent to the public, through advertising or
other means of communicating or providing information including the
use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform any
of the activities of a mortgage loan originator.
(c) An independent contractor who is retained by a mortgage loan
originator may not engage in the activities of a loan processor or
underwriter for a residential mortgage loan unless the independent
contractor loan processor or underwriter obtains and maintains an
endorsement as a mortgage loan originator under this article. Each
independent contractor loan processor or underwriter who obtains and
maintains an endorsement as a mortgage loan originator under this
article shall have and maintain a valid unique identifier issued by
the Nationwide Mortgage Licensing System and Registry.
(d) This section shall become operative on July 1, 2018.
SEC. 101. Section 10176 of the Business and
Professions Code is amended to read:
10176. (a) The commissioner may, upon his or her own motion, and
shall, upon the verified complaint in writing of any person,
investigate the actions of any person engaged in the business or
acting in the capacity of a real estate licensee within this state,
and he or she may temporarily suspend or permanently revoke a real
estate license at any time where the licensee, while a real estate
licensee, in performing or attempting to perform any of the acts
within the scope of this chapter has been guilty of any of the
following:
(1) Making any substantial misrepresentation.
(2) Making any false promises of a character likely to influence,
persuade, or induce.
(3) A continued and flagrant course of misrepresentation or making
of false promises through real estate agents or salespersons.
(4) Acting for more than one party in a transaction without the
knowledge or consent of all parties thereto.
(5) Commingling with his or her own money or property the money or
other property of others which is received and held by him or her.
(6) Claiming, demanding, or receiving a fee, compensation, or
commission under any exclusive agreement authorizing or employing a
licensee to perform any acts set forth in Section 10131 for
compensation or commission where the agreement does not contain a
definite, specified date of final and complete termination.
(7) The claiming or taking by a licensee of any secret or
undisclosed amount of compensation, commission, or profit or the
failure of a licensee to reveal to the employer of the licensee the
full amount of the licensee's compensation, commission, or profit
under any agreement authorizing or employing the licensee to do any
acts for which a license is required under this chapter for
compensation or commission prior to or coincident with the signing of
an agreement evidencing the meeting of the minds of the contracting
parties, regardless of the form of the agreement, whether evidenced
by documents in an escrow or by any other or different procedure.
(8) The use by a licensee of any provision allowing the licensee
an option to purchase in an agreement authorizing or employing the
licensee to sell, buy, or exchange real estate or a business
opportunity for compensation or commission, except when the licensee
prior to or coincident with election to exercise the option to
purchase reveals in writing to the employer the full amount of the
licensee's profit and obtains the written consent of the employer
approving the amount of the profit.
(9) Any other conduct, whether of the same or a different
character than specified in this section, which constitutes fraud or
dishonest dealing.
(10) Obtaining the signature of a prospective purchaser to an
agreement which provides that the prospective purchaser shall either
transact the purchasing, leasing, renting, or exchanging of a
business opportunity property through the broker obtaining the
signature, or pay a compensation to the broker if the property is
purchased, leased, rented, or exchanged without the broker first
having obtained the written authorization of the owner of the
property concerned to offer the property for sale, lease, exchange,
or rent.
(11) Failing to disburse funds in accordance with a commitment to
make a mortgage loan that is accepted by the applicant when the real
estate broker represents to the applicant that the broker is either
of the following:
(A) The lender.
(B) Authorized to issue the commitment on behalf of the lender or
lenders in the mortgage loan transaction.
(12) Intentionally delaying the closing of a mortgage loan for the
sole purpose of increasing interest, costs, fees, or charges payable
by the borrower.
(13) Violating any section, division, or article of law which
provides that a violation of that section, division, or article of
law by a licensed person is a violation of that person's licensing
law, if it occurs within the scope of that person's duties as a
licensee.
(b) This section shall repeal on July 1, 2018.
SEC. 102. Section 10176 is added to the
Business and Professions Code, to read:
10176. (a) The commissioner may, upon his or her own motion, and
shall, upon the verified complaint in writing of any person,
investigate the actions of any person engaged in the business or
acting in the capacity of a real estate licensee within this state,
and he or she may temporarily suspend or permanently revoke a real
estate license at any time where the licensee, while a real estate
licensee, in performing or attempting to perform any of the acts
within the scope of this chapter has been guilty of any of the
following:
(1) Making any substantial misrepresentation.
(2) Making any false promises of a character likely to influence,
persuade, or induce.
(3) A continued and flagrant course of misrepresentation or making
of false promises through licensees.
(4) Acting for more than one party in a transaction without the
knowledge or consent of all parties thereto.
(5) Commingling with his or her own money or property the money or
other property of others which is received and held by him or her.
(6) Claiming, demanding, or receiving a fee, compensation, or
commission under any exclusive agreement authorizing or retaining a
licensee to perform any acts set forth in Section 10131 for
compensation or commission where the agreement does not contain a
definite, specified date of final and complete termination.
(7) The claiming or taking by a licensee of any secret or
undisclosed amount of compensation, commission, or profit or the
failure of a licensee to reveal to the principal retaining the
licensee the full amount of the licensee's compensation, commission,
or profit under any agreement authorizing or retaining the licensee
to do any acts for which a license is required under this chapter for
compensation or commission prior to or coincident with the signing
of an agreement evidencing the meeting of the minds of the
contracting parties, regardless of the form of the agreement, whether
evidenced by documents in an escrow or by any other or different
procedure.
(8) The use by a licensee of any
provision allowing the licensee an option to purchase in an agreement
authorizing or retaining the licensee to sell, buy, or exchange real
estate or a business opportunity for compensation or commission,
except when the licensee prior to or coincident with election to
exercise the option to purchase reveals in writing to the responsible
broker the full amount of the licensee's profit and obtains the
written consent of the responsible broker approving the amount of the
profit.
(9) Any other conduct, whether of the same or of a different
character than specified in this section, which constitutes fraud or
dishonest dealing.
(10) Obtaining the signature of a prospective purchaser to an
agreement which provides that the prospective purchaser shall either
transact the purchasing, leasing, renting, or exchanging of a
business opportunity property through the broker obtaining the
signature or pay a compensation to the broker if the property is
purchased, leased, rented, or exchanged without the broker first
having obtained the written authorization of the owner of the
property concerned to offer the property for sale, lease, exchange,
or rent.
(11) Failing to disburse funds in accordance with a commitment to
make a mortgage loan that is accepted by the applicant when the real
estate broker represents to the applicant that the broker is either
of the following:
(A) The lender.
(B) Authorized to issue the commitment on behalf of the lender or
lenders in the mortgage loan transaction.
(12) Intentionally delaying the closing of a mortgage loan for the
sole purpose of increasing interest, costs, fees, or charges payable
by the borrower.
(13) Violating any section, division, or article of law which
provides that a violation of that section, division, or article of
law by a licensed person is a violation of that person's licensing
law if it occurs within the scope of that person's duties as a
licensee.
(b) This section shall become operative on July 1, 2018.
SEC. 103. Section 10177 of the Business and
Professions Code is amended to read:
10177. The commissioner may suspend or revoke the license of a
real estate licensee, delay the renewal of a license of a real estate
licensee, or deny the issuance of a license to an applicant, who has
done any of the following, or may suspend or revoke the license of a
corporation, delay the renewal of a license of a corporation, or
deny the issuance of a license to a corporation, if an officer,
director, or person owning or controlling 10 percent or more of the
corporation's stock has done any of the following:
(a) Procured, or attempted to procure, a real estate license or
license renewal, for himself or herself or a salesperson, by fraud,
misrepresentation, or deceit, or by making a material misstatement of
fact in an application for a real estate license, license renewal,
or reinstatement.
(b) Entered a plea of guilty or nolo contendere to, or been found
guilty of, or been convicted of, a felony, or a crime substantially
related to the qualifications, functions, or duties of a real estate
licensee, and the time for appeal has elapsed or the judgment of
conviction has been affirmed on appeal, irrespective of an order
granting probation following that conviction, suspending the
imposition of sentence, or of a subsequent order under Section 1203.4
of the Penal Code allowing that licensee to withdraw his or her plea
of guilty and to enter a plea of not guilty, or dismissing the
accusation or information.
(c) Knowingly authorized, directed, connived at, or aided in the
publication, advertisement, distribution, or circulation of a
material false statement or representation concerning his or her
designation or certification of special education, credential, trade
organization membership, or business, or concerning a business
opportunity or a land or subdivision, as defined in Chapter 1
(commencing with Section 11000) of Part 2, offered for sale.
(d) Willfully disregarded or violated the Real Estate Law (Part 1
(commencing with Section 10000)) or Chapter 1 (commencing with
Section 11000) of Part 2 or the rules and regulations of the
commissioner for the administration and enforcement of the Real
Estate Law and Chapter 1 (commencing with Section 11000) of Part 2.
(e) Willfully used the term "realtor" or a trade name or insignia
of membership in a real estate organization of which the licensee is
not a member.
(f) Acted or conducted himself or herself in a manner that would
have warranted the denial of his or her application for a real estate
license, or either had a license denied or had a license issued by
another agency of this state, another state, or the federal
government revoked or suspended for acts that, if done by a real
estate licensee, would be grounds for the suspension or revocation of
a California real estate license, if the action of denial,
revocation, or suspension by the other agency or entity was taken
only after giving the licensee or applicant fair notice of the
charges, an opportunity for a hearing, and other due process
protections comparable to the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340), Chapter 4 (commencing with
Section 11370), and Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code), and only upon an
express finding of a violation of law by the agency or entity.
(g) Demonstrated negligence or incompetence in performing an act
for which he or she is required to hold a license.
(h) As a broker licensee, failed to exercise reasonable
supervision over the activities of his or her salespersons, or, as
the officer designated by a corporate broker licensee, failed to
exercise reasonable supervision and control of the activities of the
corporation for which a real estate license is required.
(i) Used his or her employment by a governmental agency in a
capacity giving access to records, other than public records, in a
manner that violates the confidential nature of the records.
(j) Engaged in any other conduct, whether of the same or a
different character than specified in this section, that constitutes
fraud or dishonest dealing.
(k) Violated any of the terms, conditions, restrictions, and
limitations contained in an order granting a restricted license.
(l) (1) Solicited or induced the sale, lease, or listing for sale
or lease of residential property on the ground, wholly or in part, of
loss of value, increase in crime, or decline of the quality of the
schools due to the present or prospective entry into the neighborhood
of a person or persons having a characteristic listed in subdivision
(a) or (d) of Section 12955 of the Government Code, as those
characteristics are defined in Sections 12926 and 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section
12955, and Section 12955.2 of the Government Code.
(2) Notwithstanding paragraph (1), with respect to familial
status, paragraph (1) shall not be construed to apply to housing for
older persons, as defined in Section 12955.9 of the Government Code.
With respect to familial status, nothing in paragraph (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 4760 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government
Code shall apply to paragraph (1).
(m) Violated the Franchise Investment Law (Division 5 (commencing
with Section 31000) of Title 4 of the Corporations Code) or
regulations of the Commissioner of Corporations pertaining thereto.
(n) Violated the Corporate Securities Law of 1968 (Division 1
(commencing with Section 25000) of Title 4 of the Corporations Code)
or the regulations of the Commissioner of Corporations pertaining
thereto.
(o) Failed to disclose to the buyer of real property, in a
transaction in which the licensee is an agent for the buyer, the
nature and extent of a licensee's direct or indirect ownership
interest in that real property. The direct or indirect ownership
interest in the property by a person related to the licensee by blood
or marriage, by an entity in which the licensee has an ownership
interest, or by any other person with whom the licensee has a special
relationship shall be disclosed to the buyer.
(p) Violated Article 6 (commencing with Section 10237).
(q) Violated or failed to comply with Chapter 2 (commencing with
Section 2920) of Title 14 of Part 4 of Division 3 of the Civil Code,
related to mortgages.
If a real estate broker that is a corporation has not done any of
the foregoing acts, either directly or through its employees, agents,
officers, directors, or persons owning or controlling 10 percent or
more of the corporation's stock, the commissioner may not deny the
issuance or delay the renewal of a real estate license to, or suspend
or revoke the real estate license of, the corporation, provided that
any offending officer, director, or stockholder, who has done any of
the foregoing acts individually and not on behalf of the
corporation, has been completely disassociated from any affiliation
or ownership in the corporation. A decision by the commissioner to
delay the renewal of a real estate license shall toll the expiration
of that license until the results of any pending disciplinary actions
against that licensee are final, or until the licensee voluntarily
surrenders his, her, or its license, whichever is earlier.
This section shall repeal on July 1, 2018.
SEC. 104. Section 10177 is added to the Business
and Professions Code, to read:
10177. The commissioner may suspend or revoke the license of a
real estate licensee, delay the renewal of a license of a real estate
licensee, or deny the issuance of a license to an applicant, who has
done any of the following, or may suspend or revoke the license of a
corporation, delay the renewal of a license of a corporation, or
deny the issuance of a license to a corporation, if an officer,
director, or person owning or controlling 10 percent or more of the
corporation's stock has done any of the following:
(a) Procured, or attempted to procure, a real estate license or
license renewal, for himself or herself or a salesperson, by fraud,
misrepresentation, or deceit or by making a material misstatement of
fact in an application for a real estate license, license renewal, or
reinstatement.
(b) Entered a plea of guilty or no contest to, or been found
guilty of, or been convicted of, a felony, or a crime substantially
related to the qualifications, functions, or duties of a real estate
licensee, and the time for appeal has elapsed or the judgment of
conviction has been affirmed on appeal, irrespective of an order
granting probation following that conviction, suspending the
imposition of sentence, or of a subsequent order under Section 1203.4
of the Penal Code allowing that licensee to withdraw his or her plea
of guilty and to enter a plea of not guilty, or dismissing the
accusation or information.
(c) Knowingly authorized, directed, connived at, or aided in the
publication, advertisement, distribution, or circulation of a
material false statement or representation concerning his or her
designation or certification of special education, credential, trade
organization membership, or business or concerning a business
opportunity or a land or subdivision, as defined in Chapter 1
(commencing with Section 11000) of Part 2, offered for sale.
(d) Willfully disregarded or violated the Real Estate Law (Part 1
(commencing with Section 10000)) or Chapter 1 (commencing with
Section 11000) of Part 2 or the rules and regulations of the
commissioner for the administration and enforcement of the Real
Estate Law and Chapter 1 (commencing with Section 11000) of Part 2.
(e) Willfully used the term "realtor" or a trade name or insignia
of membership in a real estate organization of which the licensee is
not a member.
(f) Acted or conducted himself or herself in a manner that would
have warranted the denial of his or her application for a real estate
license or either had a license denied or had a license issued by
another agency of this state, another state, or the federal
government revoked, surrendered, or suspended for acts that, if done
by a real estate licensee, would be grounds for the suspension or
revocation of a California real estate license, if the action of
denial, revocation, surrender, or suspension by the other agency or
entity was taken only after giving the licensee or applicant fair
notice of the charges, an opportunity for a hearing, and other due
process protections comparable to the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing
with Section 11370), and Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code) and only
upon an express finding of a violation of law by the agency or
entity.
(g) Demonstrated negligence or incompetence in performing an act
for which he or she is required to hold a license.
(h) As a broker licensee, failed to exercise reasonable
supervision over the activities of his or her salespersons, or, as
the officer designated by a corporate broker licensee, failed to
exercise reasonable supervision and control of the activities of the
corporation for which a real estate license is required.
(i) Used his or her employment by a governmental agency in a
capacity giving access to records, other than public records, in a
manner that violates the confidential nature of the records.
(j) Engaged in any other conduct, whether of the same or of a
different character than specified in this section, that constitutes
fraud or dishonest dealing.
(k) Violated any of the terms, conditions, restrictions, and
limitations contained in an order granting a restricted license.
(l) (1) Solicited or induced the sale, lease, or listing for sale
or lease of residential property on the grounds, wholly or in part,
of loss of value, increase in crime, or decline of the quality of the
schools due to the present or prospective entry into the
neighborhood of a person or persons having a characteristic listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as
those characteristics are defined in Sections 12926 and 12926.1 of,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955
of, and Section 12955.2 of, the Government Code.
(2) Notwithstanding paragraph (1), with respect to familial
status, paragraph (1) shall not be construed to apply to housing for
older persons, as defined in Section 12955.9 of the Government Code.
With respect to familial status, nothing in paragraph (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 4760 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government
Code shall apply to paragraph (1).
(m) Violated the Franchise Investment Law (Division 5 (commencing
with Section 31000) of Title 4 of the Corporations Code) or
regulations of the Commissioner of Corporations pertaining thereto.
(n) Violated the Corporate Securities Law of 1968 (Division 1
(commencing with Section 25000) of Title 4 of the Corporations Code)
or the regulations of the Commissioner of Corporations pertaining
thereto.
(o) Failed to disclose to the buyer of real property, in a
transaction in which the licensee is an agent for the buyer, the
nature and extent of a licensee's direct or indirect ownership
interest in that real property. The direct or indirect ownership
interest in the property by a person related to the licensee by blood
or marriage, by an entity in which the licensee has an ownership
interest, or by any other person with whom the licensee has a special
relationship shall be disclosed to the buyer.
(p) Violated Article 6 (commencing with Section 10237).
(q) Violated or failed to comply with Chapter 2 (commencing with
Section 2920) of Title 14 of Part 4 of Division 3 of the Civil Code,
relating to mortgages.
(r) Failure to surrender a license that was issued in error or by
mistake.
If a real estate broker that is a corporation has not done any of
the foregoing acts, either directly or through its employees, agents,
officers, directors, or persons owning or controlling 10 percent or
more of the corporation's stock, the commissioner may not deny the
issuance or delay the renewal of a real estate license to, or suspend
or revoke the real estate license of, the corporation, provided that
any offending officer, director, or stockholder, who has done any of
the foregoing acts individually and not on behalf of the
corporation, has been completely disassociated from any affiliation
or ownership in the corporation. A decision by the commissioner to
delay the renewal of a real estate license shall toll the expiration
of that license until the results of any pending disciplinary actions
against that licensee are final or until the licensee voluntarily
surrenders his, her, or its license, whichever is earlier.
This section shall become operative on July 1, 2018.
SEC. 105. SEC. 29. Section 10178 of
the Business and Professions Code is amended to read:
10178. (a) When any real
estate salesman salesperson is
discharged by his or her employer for a violation of any
of the provisions of this article prescribing a ground for
disciplinary action, a certified written statement of the facts with
reference thereto shall be filed forthwith with the commissioner by
the employer and if the employer fails to notify the commissioner as
required by this section, the commissioner may temporarily suspend or
permanently revoke the real estate license of the employer, in
accordance with the provisions of this part relating to hearings.
(b) This section shall repeal on July 1, 2018.
SEC. 106. Section 10178 is added to the
Business and Professions Code, to read:
10178. (a) When any real estate salesperson is discharged by his
employer for a violation of any of the provisions of this article
prescribing a ground for disciplinary action, a certified written
statement of the facts with reference thereto shall be filed
forthwith with the commissioner by the employer, and if the employer
fails to notify the commissioner as required by this section, the
commissioner may temporarily suspend or permanently revoke the real
estate license of the employer, in accordance with the provisions of
this part relating to hearings.
(b) This section shall become operative on July 1, 2018.
SEC. 107. SEC. 30. Section 10179 of
the Business and Professions Code is amended to read:
10179. (a) No violation of
any of the provisions of this part relating to real estate or of
Chapter 1 of Part 2 by any real estate salesman
salesperson or employee of any licensed real estate broker
shall cause the revocation or suspension of the license of the
employer of the salesman salesperson or
employee unless it appears upon a hearing by the commissioner that
the employer had guilty knowledge of such violation.
(b) This section shall repeal on July 1, 2018.
SEC. 108. Section 10179 is added to the
Business and Professions Code, to read:
10179. (a) No violation of any of the provisions of this part
relating to real estate or of Chapter 1 of Part 2 of this division by
any real estate salesperson or employee of any licensed real estate
broker shall cause the revocation or suspension of the license of the
employer of the salesperson or employee unless it appears upon a
hearing by the commissioner that the employer had guilty knowledge of
the violation.
(b) This section shall become operative on July 1, 2018.
SEC. 109. SEC. 31. Section 10186.2
of the Business and Professions Code is amended to read:
10186.2. (a) (1) A licensee shall report any of the following to
the department: bureau:
(A) The bringing of an indictment or information charging a felony
against the licensee.
(B) The conviction of the licensee, including any verdict of
guilty, or plea of guilty or no contest, of any felony or
misdemeanor.
(C) Any disciplinary action taken by another licensing entity or
authority of this state or of another state or an agency of the
federal government.
(2) The report required by this subdivision shall be made in
writing within 30 days of the date of the bringing of the indictment
or the charging of a felony, the conviction, or the disciplinary
action.
(b) Failure to make a report required by this section shall
constitute a cause for discipline.
(c) This section shall repeal on July 1, 2018.
SEC. 110. Section 10186.2 is added to the
Business and Professions Code, to read:
10186.2. (a) (1) A licensee shall report any of the following to
the bureau:
(A) The bringing of a criminal complaint, information, or
indictment charging a felony against the licensee.
(B) The conviction of the licensee, including any verdict of
guilty, or plea of guilty or no contest, of any felony or
misdemeanor.
(C) Any disciplinary action taken by another licensing entity or
authority of this state or of another state or an agency of the
federal government.
(2) The report required by this subdivision shall be made in
writing within 30 days of the date of the bringing of the indictment
or the charging of a felony, the conviction, or the disciplinary
action.
(b) Failure to make a report required by this section shall
constitute a cause for discipline.
(c) This section shall become operative on July 1, 2018.
SEC. 111. Section 10232.3 of the Business and
Professions Code is amended to read:
10232.3. (a) Any transaction that involves the sale of or offer
to sell a note secured directly by an interest in one or more parcels
of real property or the sale of an undivided interest in a note
secured directly by one or more parcels of real property shall adhere
to all of the following:
(1) Except as provided in paragraph (2), the aggregate principal
amount of the note or interest sold, together with the unpaid
principal amount of any encumbrances upon the real property senior
thereto, shall not exceed the following percentages of the current
market value of each parcel of the real property, as determined in
writing by the broker or appraiser pursuant to Section 10232.6, plus
the amount for which the payment of principal and interest in excess
of the percentage of current market value is insured for the benefit
of the holders of the note or interest by an insurer admitted to do
business in this state by the Insurance Commissioner:
(A) Single-family residence, owner occupied.. 80%
(B) Single-family residence, not owner 75%
occupied.................................
(C) Commercial properties and income-
producing properties not
described in (B) or (E).................. 65%
Single-family residentially zoned lot or
parcel that has installed offsite
improvements including drainage, curbs,
(D) 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%
Land that is not income producing but
(F) has been zoned for (and if required,
approved for subdivision as) commercial
or residential development............... 50%
(G) Other real property...................... 35%
(2) The percentage amounts specified in paragraph (1) may be
exceeded when and to the extent that the broker determines that the
encumbrance of the property in excess of these percentages is
reasonable and prudent considering all relevant factors pertaining to
the real property. However, in no event shall the aggregate
principal amount of the note or interest sold, together with the
unpaid principal amount of any encumbrances upon the property senior
thereto, exceed 80 percent of the current fair market value of
improved real property or 50 percent of the current fair market value
of unimproved real property, except in the case of a single-family
zoned lot or parcel as defined in paragraph (1), which shall not
exceed 65 percent of the current fair market value of that lot or
parcel, plus the amount insured as specified in paragraph (1). A
written statement shall be prepared by the broker that sets forth the
material considerations and facts that the broker relies upon for
his or her determination, which shall be retained as a part of the
broker's record of the transaction. Either a copy of the statement or
the information contained therein shall be included in the
disclosures required pursuant to Section 10232.5.
(3) A copy of the appraisal or the broker's evaluation, for each
parcel of real property securing the note or interest, shall be
delivered to the purchaser. The broker shall advise the purchaser of
his or her right to receive a copy. For purposes of this paragraph,
"appraisal" means a written estimate of value based upon the
assembling, analyzing, and reconciling of facts and value indicators
for the real property in question. A broker shall not purport to make
an appraisal unless the person so employed is qualified on the basis
of special training, preparation, or experience.
(4) For construction or rehabilitation loans, where the amount
withheld for construction or rehabilitation at the start of the
project exceeds one hundred thousand dollars ($100,000), the term
"current market value" may be deemed to be the value of the completed
project if all of the following safeguards are met:
(A) An independent neutral third-party escrow holder is used for
all deposits and disbursements relating to the construction or
rehabilitation of the secured property.
(B) The loan is fully funded, with the entire loan amount to be
deposited in escrow prior to recording of the deed or deeds of trust.
(C) A comprehensive, detailed draw schedule is used to ensure
proper and timely disbursements to allow for completion of the
project.
(D) The disbursement draws from the escrow account are based on
verification from an independent qualified person who certifies that
the work completed to date meets the related codes and standards and
that the draws were made in accordance with the construction contract
and draw schedule. For purposes of this subparagraph, "independent
qualified person" means a person who is not an employee, agent, or
affiliate of the broker and who is a licensed architect, general
contractor, structural engineer, or active local government building
inspector acting in his or her official capacity.
(E) An appraisal is completed by a qualified and licensed
appraiser in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP).
(F) The documentation includes a detailed description of the
actions that may be taken in the event of a failure to complete the
project, whether that failure is due to default, insufficiency of
funds, or other causes.
(G) The entire amount of the loan does not exceed two million five
hundred thousand dollars ($2,500,000).
(5) For construction or rehabilitation loans, where the amount
withheld for construction or rehabilitation at the start of the
project is one hundred thousand dollars ($100,000) or less, the term
"current market value" may be deemed to be the value of the completed
project if all of the following safeguards are met:
(A) The loan is fully funded, with the entire loan amount to be
deposited in escrow prior to recording of the deed or deeds of trust.
(B) A comprehensive, detailed draw schedule is used to ensure
proper and timely disbursements to allow for completion of the
project.
(C) An appraisal is completed by a qualified and licensed
appraiser in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP).
(D) The documentation includes a detailed description of the
actions that may be taken in the event of a failure to complete the
project, whether that failure is due to default, insufficiency of
funds, or other causes.
(E) The entire amount of the loan does not exceed two million five
hundred thousand dollars ($2,500,000).
(6) If a note or an interest will be secured by more than one
parcel of real property, for the purpose of determining the maximum
amount of the note or interest, each security property shall be
assigned a portion of the note or interest that shall not exceed the
percentage of current market value determined by, and in accordance
with, the provisions of paragraphs (1) and (2).
(b) The note or interest shall not be sold, unless the purchaser
meets one or both of the qualifications of income or net worth set
forth below and signs a statement, which shall be retained by the
broker 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''
(c) This section shall repeal on July 1, 2018.
SEC. 112. Section 10232.3 is added to the
Business and Professions Code, to read:
10232.3. (a) Any transaction that involves the sale of or offer
to sell a note secured directly by an interest in one or more parcels
of real property or the sale of an undivided interest in a note
secured directly by one or more parcels of real property shall adhere
to all of the following:
(1) Except as provided in paragraph (2), the aggregate principal
amount of the note or interest sold, together with the unpaid
principal amount of any encumbrances upon the real property senior
thereto, shall not exceed the following percentages of the current
market value of each parcel of the real property, as determined in
writing by the broker or appraiser pursuant to Section 10232.6, plus
the amount for which the payment of principal and interest in excess
of the percentage of current market value is insured for the benefit
of the holders of the note or interest by an insurer admitted to do
business in this state by the Insurance Commissioner:
(A) Single-family residence, owner occupied.. 80%
(B) Single-family residence, not owner 75%
occupied.................................
(C) Commercial properties and income-
producing properties not
described in (B) or (E).................. 65%
Single-family residentially zoned lot or
parcel that has installed offsite
improvements, including drainage, curbs,
(D) 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%
Land that is not income producing but
(F) has been zoned for (and, if required,
approved for subdivision as) commercial
or residential development............... 50%
(G) Other real property...................... 35%
(2) The percentage amounts specified in paragraph (1) may be
exceeded when and to the extent that the broker determines that the
encumbrance of the property in excess of these percentages is
reasonable and prudent considering all relevant factors pertaining to
the real property. However, in no event shall the aggregate
principal amount of the note or interest sold, together with the
unpaid principal amount of any encumbrances upon the property senior
thereto, exceed 80 percent of the current fair market value of
improved real property or 50 percent of the current fair market value
of unimproved real property, except in the case of a single-family
zoned lot or parcel as defined in paragraph (1), which shall not
exceed 65 percent of the current fair market value of that lot or
parcel, plus the amount insured as specified in paragraph (1). A
written statement shall be prepared by the broker that sets forth the
material considerations and facts that the broker relies upon for
his or her determination, which shall be retained as part of the
broker's record of the transaction. Either a copy of the statement or
the information contained therein shall be included in the
disclosures required pursuant to Section 10232.5.
(3) A copy of the appraisal or the broker's evaluation, for each
parcel of real property securing the note or interest, shall be
delivered to the purchaser. The broker shall advise the purchaser of
his or her right to receive a copy. For purposes of this paragraph,
"appraisal" means a written estimate of value based upon the
assembling, analyzing, and reconciling of facts and value indicators
for the real property in question. A broker shall not purport to make
an appraisal unless he or she is qualified on the basis of special
training, preparation, or experience.
(4) For construction or rehabilitation loans, where the amount
withheld for construction or rehabilitation at the start of the
project exceeds one hundred thousand dollars ($100,000), the term
"current market value" may be deemed to be the value of the completed
project if all of the following safeguards are met:
(A) An independent neutral third-party escrow holder is used for
all deposits and disbursements relating to the construction or
rehabilitation of the secured property.
(B) The loan is fully funded, with the entire loan amount to be
deposited in escrow prior to the recording of the deed or deeds of
trust.
(C) A comprehensive, detailed draw schedule is used to ensure
proper and timely disbursements to allow for completion of the
project.
(D) The disbursement draws from the escrow account are based on
verification from an independent qualified person who certifies that
the work completed to date meets the related codes and standards and
that the draws were made in accordance with the construction contract
and draw schedule. For purposes of this subparagraph, "independent
qualified person" means a person who is not an employee, agent, or
affiliate of the broker and who is a licensed architect, general
contractor, structural engineer, or active local government building
inspector acting in his or her official capacity.
(E) An appraisal is completed by a qualified and licensed
appraiser in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP).
(F) The documentation includes a detailed description of the
actions that may be taken in the event of a failure to complete the
project, whether that failure is due to default, insufficiency of
funds, or other causes.
(G) The entire amount of the loan does not exceed two million five
hundred thousand dollars ($2,500,000).
(5) For construction or rehabilitation loans, where the amount
withheld for construction or rehabilitation at the start of the
project is one hundred thousand dollars ($100,000) or less, the term
"current market value" may be deemed to be the value of the completed
project if all of the following safeguards are met:
(A) The loan is fully funded, with the entire loan amount to be
deposited in escrow prior to the recording of the deed or deeds of
trust.
(B) A comprehensive, detailed draw schedule is used to ensure
proper and timely disbursements to allow for completion of the
project.
(C) An appraisal is completed by a qualified and licensed
appraiser in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP).
(D) The documentation includes a detailed description of the
actions that may be taken in the event of a failure to complete the
project, whether that failure is due to default, insufficiency of
funds, or other causes.
(E) The entire amount of the loan does not exceed two million five
hundred thousand dollars ($2,500,000).
(6) If a note or an interest will be secured by more than one
parcel of real property, for the purpose of determining the maximum
amount of the note or interest, each security property shall be
assigned a portion of the note or interest that shall not exceed the
percentage of current market value determined by, and in accordance
with, the provisions of paragraphs (1) and (2).
(b) The note or interest shall not be sold, unless the purchaser
meets one or both of the qualifications of income or net worth set
forth below and signs a statement, which shall be retained by the
broker 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''
(c) This section shall become operative on July 1, 2018.
SEC. 113. Section 10238 of the Business and
Professions Code is amended to read:
10238. (a) A notice in the following form and containing the
following information shall be filed with the commissioner within 30
days after the first transaction and within 30 days of any material
change in the information required in the notice:
TO: Real Estate
Commissioner
Mortgage Loan
Section
1651 Exposition Boulevard
Sacramento, CA 95815
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):
_____________________________________________
# and Street City State ZIP Code
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
Corporate Broker
__________________________________
Type Name of Person(s) Signing
This Notice
NOTE: AN AMENDED NOTICE MUST BE FILED BY THE BROKER WITHIN 30 DAYS OF
ANY MATERIAL CHANGE IN THE INFORMATION REQUIRED TO BE SET FORTH
HEREIN.
(b) A broker or person who becomes the servicing agent for notes
or interests sold pursuant to this article, upon which payments due
during any period of three consecutive months in the aggregate exceed
one hundred twenty-five thousand dollars ($125,000) or the number of
persons entitled to the payments exceeds 120, shall file the notice
required by subdivision (a) with the commissioner within 30 days
after becoming the servicing agent.
(c) All advertising employed for transactions under this article
shall show the name of the broker and comply with Section 10235 of
this code and Sections 260.302 and 2848 of Title 10 of the California
Code of Regulations. Brokers and their agents are cautioned that a
reference to a prospective investor that a transaction is conducted
under this article may be deemed misleading or deceptive if this
representation may reasonably be construed by the investor as an
implication of merit or approval of the transaction.
(d) Each parcel of real property directly securing the notes or
interests shall be located in this state, the note or notes shall not
by their terms be subject to subordination to any subsequently
created deed of trust upon the real property, and the note or notes
shall not be promotional notes secured by liens on separate parcels
of real property in one subdivision or in contiguous subdivisions.
For purposes of this subdivision, a promotional note means a
promissory note secured by a trust deed, executed on unimproved real
property or executed after construction of an improvement of the
property but before the first purchase of the property as so
improved, or executed as a means of financing the first purchase of
the property as so improved, that is subordinate, or by its terms may
become subordinate, to any other trust deed on the property.
However, the term "promotional note" does not include either of the
following:
(1) A note that was executed in excess of three years prior to
being offered for sale.
(2) A note secured by a first trust deed on real property in a
subdivision that evidences a bona fide loan made in connection with
the financing of the usual cost of the development in a residential,
commercial, or industrial building or buildings on the property under
a written agreement providing for the disbursement of the loan funds
as costs are incurred or in relation to the progress of the work and
providing for title insurance insuring the priority of the security
as against mechanic's and materialmen's liens or for the final
disbursement of at least 10 percent of the loan funds after the
expiration of the period for the filing of mechanic's and materialmen'
s liens.
(e) The notes or interests shall be sold by or through a real
estate broker, as principal or agent. At the time the notes or
interests are originally sold or assigned, neither the broker nor an
affiliate of the broker shall have an interest as owner, lessor, or
developer of the property securing the loan, or any contractual right
to acquire, lease, or develop the property securing the loan. This
provision does not prohibit a broker from conducting the following
transactions if, in either case, the disclosure statement furnished
by the broker pursuant to subdivision ( l )
discloses the interest of the broker or affiliate in the transaction
and the circumstances under which the broker or affiliate acquired
the interest:
(1) A transaction in which the broker or an affiliate of the
broker is acquiring the property pursuant to a foreclosure under, or
sale pursuant to, a deed of trust securing a note for which the
broker is the servicing agent or that the broker sold to the holder
or holders.
(2) A transaction in which the broker or an affiliate of the
broker is reselling from inventory property acquired by the broker
pursuant to a foreclosure under, or sale pursuant to, a deed of trust
securing a note for which the broker is the servicing agent or that
the broker sold to the holder or holders.
(f) (1) The notes or interests shall not be sold to more than 10
persons, each of whom meets one or both of the qualifications of
income or net worth set forth below and signs a statement, which
shall be retained by the broker 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
(2) The number of offerees shall not be considered for the
purposes of this section.
(3) Spouses and their dependents, and an individual and his or her
dependents, shall be counted as one person.
(4) A retirement plan, trust, business trust, corporation, or
other entity that is wholly owned by an individual and the individual'
s spouse or the individual's dependents, or any combination thereof,
shall not be counted separately from the individual, but the
investments of these entities shall be aggregated with those of the
individual for the purposes of the statement required by paragraph
(1). If the investments of any entities are required to be aggregated
under this subdivision, the adjusted gross income or net worth of
these entities may also be aggregated with the net worth, income, or
both, of the individual.
(5) The "institutional investors" enumerated in subdivision (i) of
Section 25102 or subdivision (c) of Section 25104 of the
Corporations Code, or in a rule adopted pursuant thereto, shall not
be counted.
(6) A partnership, limited
liability company, corporation, or other organization that was not
specifically formed for the purpose of purchasing the security
offered in reliance upon this exemption from securities qualification
is counted as one person.
(g) The notes or interests of the purchasers shall be identical in
their underlying terms, including the right to direct or require
foreclosure, rights to and rate of interest, and other incidents of
being a lender, and the sale to each purchaser pursuant to this
section shall be upon the same terms, subject to adjustment for the
face or principal amount or percentage interest purchased and for
interest earned or accrued. This subdivision does not preclude
different selling prices for interests to the extent that these
differences are reasonably related to changes in the market value of
the loan occurring between the sales of these interests. The interest
of each purchaser shall be recorded pursuant to subdivisions (a) to
(c), inclusive, of Section 10234.
(h) (1) Except as provided in paragraph (2), the aggregate
principal amount of the notes or interests sold, together with the
unpaid principal amount of any encumbrances upon the real property
senior thereto, shall not exceed the following percentages of the
current market value of each parcel of the real property, as
determined in writing by the broker or appraiser pursuant to Section
10232.6, plus the amount for which the payment of principal and
interest in excess of the percentage of current market value is
insured for the benefit of the holders of the notes or interests by
an insurer admitted to do business in this state by the Insurance
Commissioner:
(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%
(2) The percentage amounts specified in paragraph (1) may be
exceeded when and to the extent that the broker determines that the
encumbrance of the property in excess of these percentages is
reasonable and prudent considering all relevant factors pertaining to
the real property. However, in no event shall the aggregate
principal amount of the notes or interests sold, together with the
unpaid principal amount of any encumbrances upon the property senior
thereto, exceed 80 percent of the current fair market value of
improved real property or 50 percent of the current fair market value
of unimproved real property, except in the case of a single-family
zoned lot or parcel as defined in paragraph (1), which shall not
exceed 65 percent of the current fair market value of that lot or
parcel, plus the amount insured as specified in paragraph (1). A
written statement shall be prepared by the broker that sets forth the
material considerations and facts that the broker relies upon for
his or her determination, which shall be retained as a part of the
broker's record of the transaction. Either a copy of the statement or
the information contained therein shall be included in the
disclosures required pursuant to subdivision (l).
(3) A copy of the appraisal or the broker's evaluation, for each
parcel of real property securing the notes or interests, shall be
delivered to each purchaser. The broker shall advise purchasers of
their right to receive a copy. For purposes of this paragraph,
"appraisal" means a written estimate of value based upon the
assembling, analyzing, and reconciling of facts and value indicators
for the real property in question. A broker shall not purport to make
an appraisal unless the person so employed is qualified on the basis
of special training, preparation, or experience.
(4) For construction or rehabilitation loans, the term "current
market value" may be deemed to be the value of the completed project
if the following safeguards are met:
(A) An independent neutral third-party escrow holder is used for
all deposits and disbursements.
(B) The loan is fully funded, with the entire loan amount to be
deposited in escrow prior to recording of the deed or deeds of trust.
(C) A comprehensive, detailed draw schedule is used to ensure
proper and timely disbursements to allow for completion of the
project.
(D) The disbursement draws from the escrow account are based on
verification from an independent qualified person who certifies that
the work completed to date meets the related codes and standards and
that the draws were made in accordance with the construction contract
and draw schedule. For purposes of this subparagraph, "independent
qualified person" means a person who is not an employee, agent, or
affiliate of the broker and who is a licensed architect, general
contractor, structural engineer, or active local government building
inspector acting in his or her official capacity.
(E) An appraisal is completed by a qualified and licensed
appraiser in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP).
(F) In addition to the transaction documentation required by
subdivision (i), the documentation shall include a detailed
description of actions that may be taken in the event of a failure to
complete the project, whether that failure is due to default,
insufficiency of funds, or other causes.
(G) The entire amount of the loan does not exceed two million five
hundred thousand dollars ($2,500,000).
(5) If a note or an interest will be secured by more than one
parcel of real property, for the purpose of determining the maximum
amount of the note or interest, each security property shall be
assigned a portion of the note or interest that shall not exceed the
percentage of current market value determined by, and in accordance
with, the provisions of paragraphs (1) and (2).
(i) The documentation of the transaction shall require that (1) a
default upon any note or interest is a default upon all notes or
interests and (2) the holders of more than 50 percent of the recorded
beneficial interests of the notes or interests may govern the
actions to be taken on behalf of all holders in accordance with
Section 2941.9 of the Civil Code in the event of default or
foreclosure for matters that require direction or approval of the
holders, including designation of the broker, servicing agent, or
other person acting on their behalf, and the sale, encumbrance, or
lease of real property owned by the holders resulting from
foreclosure or receipt of a deed in lieu of foreclosure. The terms
called for by this subdivision may be included in the deed of trust,
in the assignment of interests, or in any other documentation as is
necessary or appropriate to make them binding on the parties.
(j) (1) The broker shall not accept any purchase or loan funds or
other consideration from a prospective lender or purchaser, or
directly or indirectly cause the funds or other consideration to be
deposited in an escrow or trust account, except as to a specific loan
or note secured by a deed of trust that the broker owns, is
authorized to negotiate, or is unconditionally obligated to buy.
(2) All funds received by the broker from the purchasers or
lenders shall be handled in accordance with Section 10145 for
disbursement to the persons thereto entitled upon recordation of the
interests of the purchasers or lenders in the note and deed of trust.
No provision of this article shall be construed as modifying or
superseding applicable law regulating the escrow holder in any
transaction or the handling of the escrow account.
(3) The books and records of the broker or servicing agent, or
both, shall be maintained in a manner that readily identifies
transactions under this article and the receipt and disbursement of
funds in connection with these transactions.
(4) If required by paragraph (3) of subdivision (k), the review by
the independent certified public accountant shall include a sample
of transactions, as reflected in the records of the trust account
required pursuant to paragraph (1) of subdivision (k), and the bank
statements and supporting documents. These documents shall be
reviewed for compliance with this article with respect to the
handling and distribution of funds. The sample shall be selected at
random by the accountant from all these transactions and shall
consist of the following: (A) three sales made or 5 percent of the
sales made pursuant to this article during the period for which the
examination is conducted, whichever is greater, and (B) 10 payments
processed or 2 percent of payments processed under this article
during the period for which the examination is conducted, whichever
is greater.
(5) For the purposes of this subdivision, the transaction that
constitutes a "sale" is the series of transactions by which a series
of notes of a maker, or the interests in the note of a maker, are
sold or issued to their various purchasers under this article,
including all receipts and disbursements in that process of funds
received from the purchasers or lenders. The transaction that
constitutes a "payment," for the purposes of this subdivision, is the
receipt of a payment from the person obligated on the note or from
some other person on behalf of the person so obligated, including the
broker or servicing agent, and the distribution of that payment to
the persons entitled thereto. If a payment involves an advance paid
by the broker or servicing agent as the result of a dishonored check,
the inspection shall identify the source of funds from which the
payment was made or, in the alternative, the steps that are
reasonably necessary to determine that there was not a disbursement
of trust funds. The accountant shall inspect for compliance with the
following specific provisions of this section: paragraphs (1), (2),
and (3) of subdivision (j) and paragraphs (1) and (2) of subdivision
(k).
(6) Within 30 days of the close of the period for which the report
is made, or within any additional time as the commissioner may in
writing allow in a particular case, the accountant shall forward to
the broker or servicing agent, as the case may be, and to the
commissioner, the report of the accountant, stating that the
inspection was performed in accordance with this section, listing the
sales and the payments examined, specifying the nature of the
deficiencies, if any, noted by the accountant with respect to each
sale or payment, together with any further information as the
accountant may wish to include, such as corrective steps taken with
respect to any deficiency so noted, or stating that no deficiencies
were observed. If the broker meets the threshold criteria of Section
10232, the report of the accountant shall be submitted as part of the
quarterly reports required under Section 10232.25.
(k) The notes or interests shall be sold subject to a written
agreement that obligates a licensed real estate broker, or a person
exempted from the licensing requirement for real estate brokers under
this chapter, to act as agent for the purchasers or lenders to
service the note or notes and deed of trust, including the receipt
and transmission of payments and the institution of foreclosure
proceedings in the event of a default. A copy of this servicing
agreement shall be delivered to each purchaser. The broker shall
offer to the lenders or purchasers the services of the broker or one
or more affiliates of the broker, or both, as servicing agent for
each transaction conducted pursuant to this article. The agreement
shall require all of the following:
(1) (A) That payments received on the note or notes be deposited
immediately to a trust account maintained in accordance with this
section and with the provisions for trust accounts of licensed real
estate brokers contained in Section 10145 and Article 15 (commencing
with Section 2830.1) of Chapter 6 of Title 10 of the California Code
of Regulations.
(B) That payments deposited pursuant to subparagraph (A) shall not
be commingled with the assets of the servicing agent or used for any
transaction other than the transaction for which the funds are
received.
(2) That payments received on the note or notes shall be
transmitted to the purchasers or lenders pro rata according to their
respective interests within 25 days after receipt thereof by the
agent. If the source for the payment is not the maker of the note,
the agent shall inform the purchasers or lenders in writing of the
source for payment. A broker or servicing agent who transmits to the
purchaser or lenders the broker's or servicing agent's own funds to
cover payments due from the borrower but unpaid as a result of a
dishonored check may recover the amount of the advances from the
trust fund when the past due payment is received. However, this
article does not authorize the broker, servicing agent, or any other
person to issue, or to engage in any practice constituting, any
guarantee or to engage in the practice of advancing payments on
behalf of the borrower.
(3) If the broker or person who is or becomes the servicing agent
for notes or interests sold pursuant to this article upon which the
payments due during any period of three consecutive months in the
aggregate exceed one hundred twenty-five thousand dollars ($125,000)
or the number of persons entitled to the payments exceeds 120, the
trust account or accounts of that broker or affiliate shall be
inspected by an independent certified public accountant at no less
than three-month intervals during the time the volume is maintained.
Within 30 days after the close of the period for which the review is
made, the report of the accountant shall be forwarded as provided in
paragraph (6) of subdivision (j). If the broker is required to file
an annual report pursuant to subdivision (o) or pursuant to Section
10232.2, the quarterly report pursuant to this subdivision need not
be filed for the last quarter of the year for which the annual report
is made. For the purposes of this subdivision, an affiliate of a
broker is any person controlled by, controlling, or under common
control with the broker.
(4) Unless the servicing agent will receive notice pursuant to
Section 2924b of the Civil Code, the servicing agent shall file a
written request for notice of default upon any prior encumbrances and
promptly notify the purchasers or lenders of any default on the
prior encumbrances or on the note or notes subject to the servicing
agreement.
(5) The servicing agent shall promptly forward copies of the
following to each purchaser or lender:
(A) Any notice of trustee sale filed on behalf of the purchasers
or lenders.
(B) Any request for reconveyance of the deed of trust received on
behalf of the purchasers or lenders.
(l) The broker shall disclose in writing to each purchaser or
lender the material facts concerning the transaction on a disclosure
form adopted or approved by the commissioner pursuant to Section
10232.5, subject to the following:
(1) The disclosure form shall include a description of the terms
upon which the note and deed of trust are being sold, including the
terms of the undivided interests being offered therein, including the
following:
(A) In the case of the sale of an existing note:
(i) The aggregate sale price of the note.
(ii) The percent of the premium over or discount from the
principal balance plus accrued but unpaid interest.
(iii) The effective rate of return to the purchasers if the note
is paid according to its terms.
(iv) The name and address of the escrow holder for the
transaction.
(v) A description of, and the estimated amount of, each cost
payable by the seller in connection with the sale and a description
of, and the estimated amount of, each cost payable by the purchasers
in connection with the sale.
(B) In the case of the origination of a note:
(i) The name and address of the escrow holder for the transaction.
(ii) The anticipated closing date.
(iii) A description of, and the estimated amount of, each cost
payable by the borrower in connection with the loan and a description
of, and the estimated amount of, each cost payable by the lenders in
connection with the loan.
(C) In the case of a transaction involving a note or interest
secured by more than one parcel of real property, in addition to the
requirements of subparagraphs (A) and (B):
(i) The address, description, and estimated fair market value of
each property securing the loan.
(ii) The amount of the available equity in each property securing
the loan after the loan amount to be apportioned to each property is
assigned.
(iii) The loan to value percentage for each property after the
loan amount to be apportioned to each property is assigned pursuant
to subdivision (h).
(2) A copy of the written statement or information contained
therein, as required by paragraph (2) of subdivision (h), shall be
included in the disclosure form.
(3) Any interest of the broker or affiliate in the transaction, as
described in subdivision (e), shall be included with the disclosure
form.
(4) When the particular circumstances of a transaction make
information not specified in the disclosure form material or
essential to keep the information provided in the form from being
misleading, and the other information is known to the broker, the
other information shall also be provided by the broker.
(5) If more than one parcel of real property secures the notes or
interests, the disclosure form shall also fully disclose any risks to
investors associated with securing the notes or interests with
multiple parcels of real property.
(m) The broker or servicing agent shall furnish any purchaser of a
note or interest, upon request, with the names and addresses of the
purchasers of the other notes or interests in the loan.
(n) No agreement in connection with a transaction covered by this
article shall grant to the real estate broker, the servicing agent,
or any affiliate of the broker or agent the option or election to
acquire the interests of the purchasers or lenders or to acquire the
real property securing the interests. This subdivision shall not
prohibit the broker or affiliate from acquiring the interests, with
the consent of the purchasers or lenders whose interests are being
purchased, or the property, with the written consent of the
purchasers or lenders, if the consent is given at the time of the
acquisition.
(o) Each broker who conducts transactions under this article, or
broker or person who becomes the servicing agent for notes or
interests sold pursuant to this article, who meets the criteria of
paragraph (3) of subdivision (k) shall file with the commissioner an
annual report of a review of its trust account. The report shall be
prepared and filed in accordance with subdivision (a) of Section
10232.2 and the rules and procedures thereunder of the commissioner.
That report shall cover the broker's transactions under this article
and, if the broker also meets the threshold criteria set forth in
Section 10232, the broker's transactions subject to that section
shall be included as well.
(p) Each broker conducting transactions pursuant to this article,
or broker or person who becomes the servicing agent for notes or
interests sold pursuant to this article, who meets the criteria of
paragraph (3) of subdivision (k) shall file with the commissioner a
report of the transactions that is prepared in accordance with
subdivision (c) of Section 10232.2. If the broker also meets the
threshold criteria of Section 10232, the report shall also include
the transactions subject to that section. This report shall be
confidential pursuant to subdivision (f) of Section 10232.2.
(q) This section shall repeal on July 1, 2018.
SEC. 114. Section 10238 is added to the
Business and Professions Code, to read:
10238. (a) A notice in the following form and containing the
following information shall be filed with the commissioner within 30
days after the first transaction and within 30 days of any material
change in the information required in the notice:
TO: Real Estate
Commissioner
Mortgage Loan
Section
1651 Exposition Boulevard
Sacramento, CA 95815
This notice is filed pursuant to Sections 10237
and 10238 of the Business and Professions Code.
( ) Original Notice ( ) Amended Notice
1. Name of Responsible 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):
_____________________________________________
# and Street City State ZIP Code
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 Responsible Broker
__________________________________
Type Name of Person(s) Signing
This Notice
NOTE: AN AMENDED NOTICE MUST BE FILED BY THE BROKER WITHIN 30 DAYS OF
ANY MATERIAL CHANGE IN THE INFORMATION REQUIRED TO BE SET FORTH
HEREIN.
(b) A broker or person who becomes the servicing agent for notes
or interests sold pursuant to this article, upon which payments due
during any period of three consecutive months in the aggregate exceed
one hundred twenty-five thousand dollars ($125,000) or the number of
persons entitled to the payments exceeds 120, shall file the notice
required by subdivision (a) with the commissioner within 30 days
after becoming the servicing agent.
(c) All advertising used for transactions under this article shall
show the name of the broker and comply with Section 10235 of this
code and Sections 260.302 and 2848 of Title 10 of the California Code
of Regulations. Brokers and their agents are cautioned that a
reference to a prospective investor that a transaction is conducted
under this article may be deemed misleading or deceptive if this
representation may reasonably be construed by the investor as an
implication of merit or approval of the transaction.
(d) Each parcel of real property directly securing the notes or
interests shall be located in this state, the note or notes shall not
by their terms be subject to subordination to any subsequently
created deed of trust upon the real property, and the note or notes
shall not be promotional notes secured by liens on separate parcels
of real property in one subdivision or in contiguous subdivisions.
For purposes of this subdivision, a promotional note means a
promissory note secured by a trust deed, executed on unimproved real
property or executed after construction of an improvement of the
property but before the first purchase of the property as so
improved, or executed as a means of financing the first purchase of
the property as so improved, that is subordinate, or by its terms may
become subordinate, to any other trust deed on the property.
However, the term "promotional note" does not include either of the
following:
(1) A note that was executed in excess of three years prior to
being offered for sale.
(2) A note secured by a first trust deed on real property in a
subdivision that evidences a bona fide loan made in connection with
the financing of the usual cost of the development in a residential,
commercial, or industrial building or buildings on the property under
a written agreement providing for the disbursement of the loan funds
as costs are incurred or in relation to the progress of the work and
providing for title insurance insuring
the priority of the security as against mechanic's and
materialmen's liens or for the final disbursement of at least 10
percent of the loan funds after the expiration of the period for the
filing of mechanic's and materialmen's liens.
(e) The notes or interests shall be sold by or through a real
estate broker, as principal or agent. At the time the notes or
interests are originally sold or assigned, neither the broker nor an
affiliate of the broker shall have an interest as owner, lessor, or
developer of the property securing the loan or any contractual right
to acquire, lease, or develop the property securing the loan. This
provision does not prohibit a broker from conducting the following
transactions if, in either case, the disclosure statement furnished
by the broker pursuant to subdivision ( l )
discloses the interest of the broker or affiliate in the transaction
and the circumstances under which the broker or affiliate acquired
the interest:
(1) A transaction in which the broker or an affiliate of the
broker is acquiring the property pursuant to a foreclosure under, or
sale pursuant to, a deed of trust securing a note for which the
broker is the servicing agent or that the broker sold to the holder
or holders.
(2) A transaction in which the broker or an affiliate of the
broker is reselling from inventory property acquired by the broker
pursuant to a foreclosure under, or sale pursuant to, a deed of trust
securing a note for which the broker is the servicing agent or that
the broker sold to the holder or holders.
(f) (1) The notes or interests shall not be sold to more than 10
persons, each of whom meets one or both of the qualifications of
income or net worth set forth below and signs a statement, which
shall be retained by the broker 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
(2) The number of offerees shall not be considered for the
purposes of this section.
(3) Spouses and their dependents, and an individual and his or her
dependents, shall be counted as one person.
(4) A retirement plan, trust, business trust, corporation, or
other entity that is wholly owned by an individual and the individual'
s spouse or the individual's dependents, or any combination thereof,
shall not be counted separately from the individual, but the
investments of these entities shall be aggregated with those of the
individual for the purposes of the statement required by paragraph
(1). If the investments of any entities are required to be aggregated
under this subdivision, the adjusted gross income or net worth of
these entities may also be aggregated with the net worth, income, or
both, of the individual.
(5) The "institutional investors" enumerated in subdivision (i) of
Section 25102 or subdivision (c) of Section 25104 of the
Corporations Code, or in a rule adopted pursuant thereto, shall not
be counted.
(6) A partnership, limited liability company, corporation, or
other organization that was not specifically formed for the purpose
of purchasing the security offered in reliance upon this exemption
from securities qualification is counted as one person.
(g) The notes or interests of the purchasers shall be identical in
their underlying terms, including the right to direct or require
foreclosure, rights to and rate of interest, and other incidents of
being a lender, and the sale to each purchaser pursuant to this
section shall be upon the same terms, subject to adjustment for the
face or principal amount or percentage interest purchased and for
interest earned or accrued. This subdivision does not preclude
different selling prices for interests to the extent that these
differences are reasonably related to changes in the market value of
the loan occurring between the sales of these interests. The interest
of each purchaser shall be recorded pursuant to subdivisions (a) to
(c), inclusive, of Section 10234.
(h) (1) Except as provided in paragraph (2), the aggregate
principal amount of the notes or interests sold, together with the
unpaid principal amount of any encumbrances upon the real property
senior thereto, shall not exceed the following percentages of the
current market value of each parcel of the real property, as
determined in writing by the broker or appraiser pursuant to Section
10232.6, plus the amount for which the payment of principal and
interest in excess of the percentage of current market value is
insured for the benefit of the holders of the notes or interests by
an insurer admitted to do business in this state by the Insurance
Commissioner:
(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%
(2) The percentage amounts specified in paragraph (1) may be
exceeded when and to the extent that the broker determines that the
encumbrance of the property in excess of these percentages is
reasonable and prudent considering all relevant factors pertaining to
the real property. However, in no event shall the aggregate
principal amount of the notes or interests sold, together with the
unpaid principal amount of any encumbrances upon the property senior
thereto, exceed 80 percent of the current fair market value of
improved real property or 50 percent of the current fair market value
of unimproved real property, except in the case of a single-family
zoned lot or parcel as defined in paragraph (1), which shall not
exceed 65 percent of the current fair market value of that lot or
parcel, plus the amount insured as specified in paragraph (1). A
written statement shall be prepared by the broker that sets forth the
material considerations and facts that the broker relies upon for
his or her determination, which shall be retained as part of the
broker's record of the transaction. Either a copy of the statement or
the information contained therein shall be included in the
disclosures required pursuant to subdivision (l).
(3) A copy of the appraisal or the broker's evaluation, for each
parcel of real property securing the notes or interests, shall be
delivered to each purchaser. For purposes of this paragraph,
"appraisal" means a written estimate of value based upon the
assembling, analyzing, and reconciling of facts and value indicators
for the real property in question. A broker shall not purport to make
an appraisal unless he or she is qualified on the basis of special
training, preparation, or experience.
(4) For construction or rehabilitation loans, the term "current
market value" may be deemed to be the value of the completed project
if the following safeguards are met:
(A) An independent neutral third-party escrow holder is used for
all deposits and disbursements.
(B) The loan is fully funded, with the entire loan amount to be
deposited in escrow prior to the recording of the deed or deeds of
trust.
(C) A comprehensive, detailed draw schedule is used to ensure
proper and timely disbursements to allow for completion of the
project.
(D) The disbursement draws from the escrow account are based on
verification from an independent qualified person who certifies that
the work completed to date meets the related codes and standards and
that the draws were made in accordance with the construction contract
and draw schedule. For purposes of this subparagraph, "independent
qualified person" means a person who is not an employee, agent, or
affiliate of the broker and who is a licensed architect, general
contractor, structural engineer, or active local government building
inspector acting in his or her official capacity.
(E) An appraisal is completed by a qualified and licensed
appraiser in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP).
(F) In addition to the transaction documentation required by
subdivision (i), the documentation shall include a detailed
description of actions that may be taken in the event of a failure to
complete the project, whether that failure is due to default,
insufficiency of funds, or other causes.
(G) The entire amount of the loan does not exceed two million five
hundred thousand dollars ($2,500,000).
(5) If a note or an interest will be secured by more than one
parcel of real property, for the purpose of determining the maximum
amount of the note or interest, each security property shall be
assigned a portion of the note or interest that shall not exceed the
percentage of current market value determined by, and in accordance
with, the provisions of paragraphs (1) and (2).
(i) The documentation of the transaction shall require both of the
following:
(1) A default upon any note or interest is a default upon all
notes or interests.
(2) The holders of more than 50 percent of the recorded beneficial
interests of the notes or interests may govern the actions to be
taken on behalf of all holders in accordance with Section 2941.9 of
the Civil Code in the event of default or foreclosure for matters
that require direction or approval of the holders, including
designation of the broker, servicing agent, or other person acting on
their behalf, and the sale, encumbrance, or lease of real property
owned by the holders resulting from foreclosure or receipt of a deed
in lieu of foreclosure. The terms called for by this subdivision may
be included in the deed of trust, in the assignment of interests, or
in any other documentation as is necessary or appropriate to make
them binding on the parties.
(j) (1) The broker shall not accept any purchase or loan funds or
other consideration from a prospective lender or purchaser, or
directly or indirectly cause the funds or other consideration to be
deposited in an escrow or trust account, except as to a specific loan
or note secured by a deed of trust that the broker owns, is
authorized to negotiate, or is unconditionally obligated to buy.
(2) All funds received by the broker from the purchasers or
lenders shall be handled in accordance with Section 10145 for
disbursement to the persons thereto entitled upon recordation of the
interests of the purchasers or lenders in the note and deed of trust.
No provision of this article shall be construed as modifying or
superseding applicable law regulating the escrow holder in any
transaction or the handling of the escrow account.
(3) The books and records of the broker or servicing agent, or
both, shall be maintained in a manner that readily identifies
transactions under this article and the receipt and disbursement of
funds in connection with these transactions.
(4) If required by paragraph (3) of subdivision (k), the review by
the independent certified public accountant shall include a sample
of transactions, as reflected in the records of the trust account
required pursuant to paragraph (1) of subdivision (k), and the bank
statements and supporting documents. These documents shall be
reviewed for compliance with this article with respect to the
handling and distribution of funds. The sample shall be selected at
random by the accountant from all these transactions and shall
consist of both of the following:
(A) Three sales made or 5 percent of the sales made pursuant to
this article during the period for which the examination is
conducted, whichever is greater.
(B) Ten payments processed or 2 percent of payments processed
under this article during the period for which the examination is
conducted, whichever is greater.
(5) For the purposes of this subdivision, the transaction that
constitutes a "sale" is the series of transactions by which a series
of notes of a maker, or the interests in the note of a maker, are
sold or issued to their various purchasers under this article,
including all receipts and disbursements in that process of funds
received from the purchasers or lenders. The transaction that
constitutes a "payment," for the purposes of this subdivision, is the
receipt of a payment from the person obligated on the note or from
some other person on behalf of the person so obligated, including the
broker or servicing agent, and the distribution of that payment to
the persons entitled thereto. If a payment involves an advance paid
by the broker or servicing agent as the result of a dishonored check,
the inspection shall identify the source of funds from which the
payment was made or, in the alternative, the steps that are
reasonably necessary to determine that there was not a disbursement
of trust funds. The accountant shall inspect for compliance with the
following specific provisions of this section: paragraphs (1), (2),
and (3) of this subdivision and paragraphs (1) and (2) of subdivision
(k).
(6) Within 30 days of the close of the period for which the report
is made, or within any additional time as the commissioner may in
writing allow in a particular case, the accountant shall forward to
the broker or servicing agent, as the case may be, and to the
commissioner, the report of the accountant, stating that the
inspection was performed in accordance with this section, listing the
sales and the payments examined, specifying the nature of the
deficiencies, if any, noted by the accountant with respect to each
sale or payment, together with any further information as the
accountant may wish to include, such as corrective steps taken with
respect to any deficiency so noted, or stating that no deficiencies
were observed. If the broker meets the threshold criteria of Section
10232, the report of the accountant shall be submitted as part of the
quarterly reports required under Section 10232.25.
(k) The notes or interests shall be sold subject to a written
agreement that obligates a licensed real estate broker, or a person
exempted from the licensing requirement for real estate brokers under
this chapter, to act as agent for the purchasers or lenders to
service the note or notes and deed of trust, including the receipt
and transmission of payments and the institution of foreclosure
proceedings in the event of a default. A copy of this servicing
agreement shall be delivered to each purchaser. The broker shall
offer to the lenders or purchasers the services of the broker or one
or more affiliates of the broker, or both, as servicing agent for
each transaction conducted pursuant to this article. The agreement
shall require all of the following:
(1) (A) That payments received on the note or notes be deposited
immediately to a trust account maintained in accordance with this
section and with the provisions for trust accounts of licensed real
estate brokers contained in Section 10145 and Article 15 (commencing
with Section 2830.1) of Chapter 6 of Title 10 of the California Code
of Regulations.
(B) That payments deposited pursuant to subparagraph (A) shall not
be commingled with the assets of the servicing agent or used for any
transaction other than the transaction for which the funds are
received.
(2) That payments received on the note or notes shall be
transmitted to the purchasers or lenders pro rata according to their
respective interests within 25 days after receipt thereof by the
agent. If the source for the payment is not the maker of the note,
the agent shall inform the purchasers or lenders in writing of the
source for payment. A broker or servicing agent who transmits to the
purchaser or lenders the broker's or servicing agent's own funds to
cover payments due from the borrower but unpaid as a result of a
dishonored check may recover the amount of the advances from the
trust fund when the past due payment is received. However, this
article does not authorize the broker, servicing agent, or any other
person to issue, or to engage in any practice constituting, any
guarantee or to engage in the practice of advancing payments on
behalf of the borrower.
(3) If the broker or person who is or becomes the servicing agent
for notes or interests sold pursuant to this article upon which the
payments due during any period of three consecutive months in the
aggregate exceed one hundred twenty-five thousand dollars ($125,000)
or the number of persons entitled to the payments exceeds 120, the
trust account or accounts of that broker or affiliate shall be
inspected by an independent certified public accountant at no less
than three-month intervals during the time the volume is maintained.
Within 30 days after the close of the period for which the review is
made, the report of the accountant shall be forwarded as provided in
paragraph (6) of subdivision (j). If the broker is required to file
an annual report pursuant to subdivision (o) or pursuant to Section
10232.2, the quarterly report pursuant to this subdivision need not
be filed for the last quarter of the year for which the annual report
is made. For the purposes of this subdivision, an affiliate of a
broker is any person controlled by, controlling, or under common
control with the broker.
(4) Unless the servicing agent will receive notice pursuant to
Section 2924b of the Civil Code, the servicing agent shall file a
written request for notice of default upon any prior encumbrances and
promptly notify the purchasers or lenders of any default on the
prior encumbrances or on the note or notes subject to the servicing
agreement.
(5) The servicing agent shall promptly forward copies of both of
the following to each purchaser or lender:
(A) Any notice of trustee sale filed on behalf of the purchasers
or lenders.
(B) Any request for reconveyance of the deed of trust received on
behalf of the purchasers or lenders.
(l) The broker shall disclose in writing to each purchaser or
lender the material facts concerning the transaction on a disclosure
form adopted or approved by the commissioner pursuant to Section
10232.5, subject to the following:
(1) The disclosure form shall include a description of the terms
upon which the note and deed of trust are being sold, including the
terms of the undivided interests being offered therein, including the
following:
(A) In the case of the sale of an existing note:
(i) The aggregate sale price of the note.
(ii) The percent of the premium over or discount from the
principal balance plus accrued but unpaid interest.
(iii) The effective rate of return to the purchasers if the note
is paid according to its terms.
(iv) The name and address of the escrow holder for the
transaction.
(v) A description of, and the estimated amount of, each cost
payable by the seller in connection with the sale and a description
of, and the estimated amount of, each cost payable by the purchasers
in connection with the sale.
(B) In the case of the origination of a note:
(i) The name and address of the escrow holder for the transaction.
(ii) The anticipated closing date.
(iii) A description of, and the estimated amount of, each cost
payable by the borrower in connection with the loan and a description
of, and the estimated amount of, each cost payable by the lenders in
connection with the loan.
(C) In the case of a transaction involving a note or interest
secured by more than one parcel of real property, in addition to the
requirements of subparagraphs (A) and (B):
(i) The address, description, and estimated fair market value of
each property securing the loan.
(ii) The amount of the available equity in each property securing
the loan after the loan amount to be apportioned to each property is
assigned.
(iii) The loan to value percentage for each property after the
loan amount to be apportioned to each property is assigned pursuant
to subdivision (h).
(2) A copy of the written statement or information contained
therein, as required by paragraph (2) of subdivision (h), shall be
included in the disclosure form.
(3) Any interest of the broker or affiliate in the transaction, as
described in subdivision (e), shall be included with the disclosure
form.
(4) When the particular circumstances of a transaction make
information not specified in the disclosure form material or
essential to keep the information provided in the form from being
misleading, and the other information is known to the broker, the
other information shall also be provided by the broker.
(5) If more than one parcel of real property secures the notes or
interests, the disclosure form shall also fully disclose any risks to
investors associated with securing the notes or interests with
multiple parcels of real property.
(m) The broker or servicing agent shall furnish any purchaser of a
note or interest, upon request, with the names and addresses of the
purchasers of the other notes or interests in the loan.
(n) No agreement in connection with a transaction covered by this
article shall grant to the real estate broker, the servicing agent,
or any affiliate of the broker or agent the option or election to
acquire the interests of the purchasers or lenders or to acquire the
real property securing the interests. This subdivision shall not
prohibit the broker or affiliate from acquiring the interests, with
the consent of the purchasers or lenders whose interests are being
purchased, or the property, with the written consent of the
purchasers or lenders if the consent is given at the time of the
acquisition.
(o) Each broker who conducts transactions under this article, or
broker or person who becomes the servicing agent for notes or
interests sold pursuant to this article, who meets the criteria of
paragraph (3) of subdivision (k), shall file with the commissioner an
annual report of a review of its trust account. The report shall be
prepared and filed in accordance with subdivision (a) of Section
10232.2 and the rules and procedures thereunder of the commissioner.
That report shall cover the broker's transactions under this article
and, if the broker also meets the threshold criteria set forth in
Section 10232, the broker's transactions subject to that section
shall be included as well.
(p) Each broker conducting transactions pursuant to this article,
or broker or person who becomes the servicing agent for notes or
interests sold pursuant to this article, who meets the criteria of
paragraph (3) of subdivision (k), shall file with the commissioner a
report of the transactions that is prepared in accordance with
subdivision (c) of Section 10232.2. If the broker also meets the
threshold criteria of Section 10232, the report shall also include
the transactions subject to that section. This report shall be
confidential pursuant to subdivision (f) of Section 10232.2.
(q) This section shall become operative on July 1, 2018.
SEC. 115. Section 10243 of the Business and
Professions Code is amended to read:
10243. If the loan is not consummated due to the failure of the
borrower to disclose the outstanding liens of record or the correct
current vested title which is material to the loan upon the real
property as provided by subdivision (c) of Section 10241, the
borrower shall be liable for the costs and expenses provided in
subdivision (a) of Section 10241 which have been paid or incurred,
and shall be liable for the payment of one-half of the charges
provided in subdivision (b) of Section 10241. An exclusive agreement
authorizing or employing a licensee to negotiate a loan secured
directly or collaterally by a lien on real property shall be limited
to a term of not more than 45 days.
If the loan is not consummated and the broker is entitled to any
charges, costs or expenses authorized by this article, he or she may
not record a lien or encumbrance against the borrower's property
except subsequent to the filing of a legal action pursuant to the
Code of Civil Procedure to recover said charges, costs or expenses.
However, nothing contained herein shall prohibit a broker from
recording a lien pursuant to a voluntary lien agreement in
conjunction with a stipulation to dismiss an actual or proposed
complaint for damages entitling the broker to such charges, costs or
expenses after written notice to the borrower that the broker
proposes or has initiated a complaint for damages pursuant to the
Code of Civil Procedure.
This section shall repeal on July 1, 2018.
SEC. 116. Section 10243 is added to the
Business and Professions Code, to read:
10243. If the loan is not consummated due to the failure of the
borrower to disclose the outstanding liens of record or the correct
current vested title which is material to the loan upon the real
property as provided by subdivision (c) of Section 10241, the
borrower shall be liable for the costs and expenses provided in
subdivision (a) of Section 10241 that have been paid or incurred and
shall be liable for the payment of one-half of the charges provided
in subdivision (b) of Section 10241. An exclusive agreement
authorizing or retaining a licensee to negotiate a loan secured
directly or collaterally by a lien on real property shall be limited
to a term of not more than 45 days.
If the loan is not consummated
and the broker is entitled to any charges, costs, or expenses
authorized by this article, he or she may not record a lien or
encumbrance against the borrower's property except subsequent to the
filing of a legal action pursuant to the Code of Civil Procedure to
recover said charges, costs, or expenses. However, nothing contained
herein shall prohibit a broker from recording a lien pursuant to a
voluntary lien agreement in conjunction with a stipulation to dismiss
an actual or proposed complaint for damages entitling the broker to
such charges, costs, or expenses after written notice to the borrower
that the broker proposes or has initiated a complaint for damages
pursuant to the Code of Civil Procedure.
This section shall become operative on July 1, 2018.
SEC. 117. Section 10509 of the Business and
Professions Code is amended to read:
10509. (a) It is unlawful for a mineral, oil, and gas broker or a
real estate broker to employ or compensate, directly or indirectly,
any person who is not a mineral, oil, and gas broker or a licensed
real estate salesperson in the employ of the real estate broker for
performing any acts for which a mineral, oil, and gas broker license
is required.
(b) It is a misdemeanor, punishable by a fine of not exceeding one
hundred dollars ($100) for each offense, for any person, whether
obligor, escrow holder or otherwise, to pay or deliver compensation
to a person for performing any acts for which a mineral, oil, and gas
broker license is required unless that person is known by the payer
to be or has presented evidence to the payer that he or she was a
licensed mineral, oil, and gas broker at the time the compensation
was earned.
(c) This section shall repeal on July 1, 2018.
SEC. 118. Section 10509 is added to the
Business and Professions Code, to read:
10509. (a) It is unlawful for a mineral, oil, and gas broker or a
real estate broker to compensate, directly or indirectly, any person
who is not a mineral, oil, and gas broker or a licensed real estate
salesperson retained by the real estate broker for performing any
acts for which a mineral, oil, and gas broker license is required.
(b) It is a misdemeanor, punishable by a fine of not exceeding one
hundred dollars ($100) for each offense, for any person, whether
obligor, escrow holder or otherwise, to pay or deliver compensation
to a person for performing any acts for which a mineral, oil, and gas
broker license is required unless that person is known by the payer
to be or has presented evidence to the payer that he or she was a
licensed mineral, oil, and gas broker at the time the compensation
was earned.
(c) This section shall become operative on July 1, 2018.
SEC. 119. Section 10561 of the Business and
Professions Code is amended to read:
10561. (a) The commissioner may, upon his own motion, and shall,
upon the verified complaint in writing of any person, investigate the
actions of any person engaged in the business or acting in the
capacity of a mineral, oil and gas licensee, within this state, and
he may temporarily suspend or permanently revoke a mineral, oil and
gas license at any time if the licensee, while a mineral, oil and gas
licensee, in performing or attempting to perform any of the acts
within the scope of this chapter, has been guilty of any of the
following:
(1) Making any substantial misrepresentation.
(2) Making any false promises of a character likely to influence,
persuade or induce.
(3) Acting for more than one party in a transaction without the
knowledge or consent of all parties thereto.
(4) Commingling with his own money or property the money or
property of others which is received and held by him.
(5) Claiming or demanding a fee, compensation or commission under
any exclusive agreement authorizing or employing a licensee to sell,
buy or exchange mineral, oil or gas property for compensation, or
commission where such agreement does not contain a definite,
specified date of final and complete termination.
(6) The claiming or taking by a licensee of any secret or
undisclosed amount of compensation, commission or profit or the
failure of a licensee to reveal to the employer of such licensee the
full amount of such licensee's compensation, commission, or profit
under any agreement authorizing or employing such licensee to do any
acts for which a license is required under this chapter for
compensation or commission prior to or coincident with the signing of
an agreement evidencing the meeting of the minds of the contracting
parties, regardless of the form of such agreement, whether evidenced
by documents in an escrow or by any other or different procedure.
(7) The use by a licensee of any provision allowing the licensee
an option to purchase in an agreement authorizing or employing such
licensee to sell, buy or exchange mineral, oil or gas property for
compensation or commission, except when such licensee prior to or
coincident with election to exercise such option to purchase reveals
in writing to the employer the full amount of licensee's profit and
obtains the written consent of the employer approving the amount of
such profit.
(8) Any other conduct, whether of the same or a different
character than specified in this section, which constitutes fraud or
dishonest dealing.
(b) This section shall repeal on July 1, 2018.
SEC. 120. Section 10561 is added to the
Business and Professions Code, to read:
10561. (a) The commissioner may, upon his own motion, and shall,
upon the verified complaint in writing of any person, investigate the
actions of any person engaged in the business or acting in the
capacity of a mineral, oil, and gas licensee within this state, and
he may temporarily suspend or permanently revoke a mineral, oil, and
gas license at any time if the licensee, while a mineral, oil, and
gas licensee, in performing or attempting to perform any of the acts
within the scope of this chapter has been guilty of any of the
following:
(1) Making any substantial misrepresentation.
(2) Making any false promises of a character likely to influence,
persuade, or induce.
(3) Acting for more than one party in a transaction without the
knowledge or consent of all parties thereto.
(4) Commingling with his or her own money or property or the money
or property of others that is received and held by him or her.
(5) Claiming or demanding a fee, compensation, or commission under
any exclusive agreement authorizing or retaining a licensee to sell,
buy, or exchange mineral, oil, or gas property for compensation, or
commission where that agreement does not contain a definite,
specified date of final and complete termination.
(6) Claiming or taking by a licensee of any secret or undisclosed
amount of compensation, commission, or profit or the failure of a
licensee to reveal to the principal retaining the licensee the full
amount of the licensee's compensation, commission, or profit under
any agreement retaining the licensee to do any acts for which a
license is required under this chapter for compensation or commission
prior to or coincident with the signing of an agreement evidencing
the meeting of the minds of the contracting parties, regardless of
the form of such agreement, whether evidenced by documents in an
escrow or by any other or different procedure.
(7) The use by a licensee of any provision allowing the licensee
an option to purchase in an agreement authorizing or retaining the
licensee to sell, buy, or exchange mineral, oil, or gas property for
compensation or commission, except when the licensee prior to or
coincident with election to exercise the option to purchase reveals
in writing to the responsible broker the full amount of the licensee'
s profit and obtains the written consent of the responsible broker
approving the amount of that profit.
(8) Any other conduct, whether of the same or a different
character than specified in this section, that constitutes fraud or
dishonest dealing.
(b) This section shall become operative on July 1, 2018.
SEC. 121. SEC. 32. Section 11212 of
the Business and Professions Code is amended to read:
11212. As used in this chapter, the following definitions apply:
(a) "Accommodation" means any apartment, condominium or
cooperative unit, cabin, lodge, hotel or motel room, or other private
or commercial structure containing toilet facilities therein that is
designed and available, pursuant to applicable law, for use and
occupancy as a residence by one or more individuals, or any unit or
berth on a commercial passenger ship, which is included in the
offering of a time-share plan.
(b) "Advertisement" means any written, oral, or electronic
communication that is directed to or targeted to persons within the
state or such a communication made from this state or relating to a
time-share plan located in this state and contains a promotion,
inducement, or offer to sell a time-share plan, including, but not
limited to, brochures, pamphlets, radio and television scripts,
electronic media, telephone and direct mail solicitations, and other
means of promotion.
(c) "Association" means the organized body consisting of the
purchasers of time-share interests in a time-share plan.
(d) "Assessment" means the share of funds required for the payment
of common expenses which that is
assessed from time to time against each purchaser by the managing
entity.
(e) "Bureau" means the Bureau of Real Estate.
(e)
(f) "Commissioner" means the Real Estate Commissioner.
(f)
(g) "Component site" means a specific geographic
location where accommodations that are part of a multisite time-share
plan are located. Separate phases of a time-share property in a
specific geographic location and under common management shall not be
deemed a component site.
(g)
(h) "Conspicuous type" means either of the following:
(1) Type in upper and lower case letters two point sizes larger
than the nearest nonconspicuous type, exclusive of headings, on the
page on which it appears but in at least 10-point type.
(2) Conspicuous type may be utilized in contracts for purchase or
public permits only where required by law or as authorized by the
commissioner.
(h) "Department" means the Department of Real Estate.
(i) "Developer" means and includes any person who creates a
time-share plan or is in the business of selling time-share
interests, other than those employees or agents of the developer who
sell time-share interests on the developer's behalf, or employs
agents to do the same, or any person who succeeds to the interest of
a developer by sale, lease, assignment, mortgage, or other transfer,
but the term includes only those persons who offer time-share
interests for disposition in the ordinary course of business.
(j) "Dispose" or "disposition" means a voluntary transfer or
assignment of any legal or equitable interest in a time-share plan,
other than the transfer, assignment, or release of a security
interest.
(k) "Exchange company" means any person owning or operating, or
both owning and operating, an exchange program.
( l ) "Exchange program" means any method, arrangement,
or procedure for the voluntary exchange of time-share interests or
other property interests. The term does not include the assignment of
the right to use and occupy accommodations to owners of time-share
interests within a single site time-share plan. Any method,
arrangement, or procedure that otherwise meets this definition in
which the purchaser's total contractual financial obligation exceeds
three thousand dollars ($3,000) per any individual, recurring
time-share period, shall be regulated as a time-share plan in
accordance with this chapter. For purposes of determining the
purchaser's total contractual financial obligation, amounts to be
paid as a result of renewals and options to renew shall be included
in the term except for the following: (1) amounts to be paid as a
result of any optional renewal that a purchaser, in his or her sole
discretion may elect to exercise, (2) amounts to be paid as a result
of any automatic renewal in which the purchaser has a right to
terminate during the renewal period at any time and receive a pro
rata refund for the remaining unexpired renewal term, or (3) amounts
to be paid as a result of an automatic renewal in which the purchaser
receives a written notice no less than 30 nor more than 90 days
prior to the date of renewal informing the purchaser of the right to
terminate prior to the date of renewal. Notwithstanding these
exceptions, if the contractual financial obligation exceeds three
thousand dollars ($3,000) for any three-year period of any renewal
term, amounts to be paid as a result of that renewal shall be
included in determining the purchaser's total contractual financial
obligation.
(m) "Incidental benefit" is an accommodation, product, service,
discount, or other benefit, other than an exchange program, that is
offered to a prospective purchaser of a time-share interest prior to
the end of the rescission period set forth in Section 11238, the
continuing availability of which for the use and enjoyment of owners
of time-share interests in the time-share plan is limited to a term
of not more than three years, subject to renewal or extension. The
term shall not include an offer of the use of the accommodation,
product, service, discount, or other benefit on a free or discounted
one-time basis.
(n) "Managing entity" means the person who undertakes the duties,
responsibilities, and obligations of the management of a time-share
plan.
(o) "Offer" means any inducement, solicitation, or other attempt,
whether by marketing, advertisement, oral or written presentation, or
any other means, to encourage a person to acquire a time-share
interest in a time-share plan, other than as security for an
obligation.
(p) "Person" means a natural person, corporation, limited
liability company, partnership, joint venture, association, estate,
trust, government, governmental subdivision or agency, or other legal
entity, or any combination thereof.
(q) "Promotion" means a plan or device, including one involving
the possibility of a prospective purchaser receiving a vacation,
discount vacation, gift, or prize, used by a developer, or an agent,
independent contractor, or employee of any of the same on behalf of
the developer, in connection with the offering and sale of time-share
interests in a time-share plan.
(r) "Public report" means a preliminary public report, conditional
public report, final public report, or other such disclosure
document authorized for use in connection with the offering of
time-share interests pursuant to this chapter.
(s) "Purchaser" means any person, other than a developer, who by
means of a voluntary transfer for consideration acquires a legal or
equitable interest in a time-share plan other than as security for an
obligation.
(t) "Purchase contract" means a document pursuant to which a
developer becomes legally obligated to sell, and a purchaser becomes
legally obligated to buy, a time-share interest.
(u) "Reservation system" means the method, arrangement, or
procedure by which a purchaser, in order to reserve the use or
occupancy of any accommodation of a multisite time-share plan for one
or more time-share periods, is required to compete with other
purchasers in the same multisite time-share plan, regardless of
whether the reservation system is operated and maintained by the
multisite time-share plan managing entity, an exchange company, or
any other person. If a purchaser is required to use an exchange
program as the purchaser's principal means of obtaining the right to
use and occupy accommodations in a multisite time-share plan, that
arrangement shall be deemed a reservation system. When an exchange
company utilizes a mechanism for the exchange of use of time-share
periods among members of an exchange program, that utilization is not
a reservation system of a multisite time-share plan.
(v) "Short-term product" means the right to use accommodations on
a one-time or recurring basis for a period or periods not to exceed
30 days per stay and for a term of three years or less, and that
includes an agreement that all or a portion of the consideration paid
by a person for the short-term product will be applied to or
credited against the price of a future purchase of a time-share
interest or that the cost of a future purchase of a time-share
interest will be fixed or locked-in at a specified price.
(w) "Time-share instrument" means one or more documents, by
whatever name denominated, creating or governing the operation of a
time-share plan and includes the declaration dedicating
accommodations to the time-share plan.
(x) "Time-share interest" means and includes either of the
following:
(1) A "time-share estate," which is the right to occupy a
time-share property, coupled with a freehold estate or an estate for
years with a future interest in a time-share property or a specified
portion thereof.
(2) A "time-share use," which is the right to occupy a time-share
property, which right is neither coupled with a freehold interest,
nor coupled with an estate for years with a future interest, in a
time-share property.
(y) "Time-share period" means the period or periods of time when
the purchaser of a time-share plan is afforded the opportunity to use
the accommodations of a time-share plan.
(z) "Time-share plan" means any arrangement, plan, scheme, or
similar device, other than an exchange program, whether by membership
agreement, sale, lease, deed, license, right to use agreement, or by
any other means, whereby a purchaser, in exchange for consideration,
receives ownership rights in or the right to use accommodations for
a period of time less than a full year during any given year, on a
recurring basis for more than one year, but not necessarily for
consecutive years. A time-share plan may be either of the following:
(1) A "single site time-share plan," which is the right to use
accommodations at a single time-share property.
(2) A "multisite time-share plan," which includes either of the
following:
(A) A "specific time-share interest," which is the right to use
accommodations at a specific time-share property, together with use
rights in accommodations at one or more other component sites created
by or acquired through the time-share plan's reservation system.
(B) A "nonspecific time-share interest," which is the right to use
accommodations at more than one component site created by or
acquired through the time-share plan's reservation system, but
including no specific right to use any particular accommodations.
(aa) "Time-share property" means one or more accommodations
subject to the same time-share instrument, together with any other
property or rights to property appurtenant to those accommodations.
This section shall repeal on July 1, 2018.
SEC. 122. Section 11212 is added to the
Business and Professions Code, to read:
11212. As used in this chapter, the following definitions apply:
(a) "Accommodation" means any apartment, condominium, or
cooperative unit, cabin, lodge, hotel or motel room, or other private
or commercial structure containing toilet facilities therein that is
designed and available, pursuant to applicable law, for use and
occupancy as a residence by one or more individuals, or any unit or
berth on a commercial passenger ship that is included in the offering
of a time-share plan.
(b) "Advertisement" means any written, oral, or electronic
communication that is directed to or targeted to persons within the
state or such a communication made from this state or relating to a
time-share plan located in this state and contains a promotion,
inducement, or offer to sell a time-share plan, including, but not
limited to, brochures, pamphlets, radio and television scripts,
electronic media, telephone and direct mail solicitations, and other
means of promotion.
(c) "Association" means the organized body consisting of the
purchasers of time-share interests in a time-share plan.
(d) "Assessment" means the share of funds required for the payment
of common expenses that is assessed from time to time against each
purchaser by the managing entity.
(e) "Bureau" means the Bureau of Real Estate.
(f) "Commissioner" means the Real Estate Commissioner.
(g) "Component site" means a specific geographic location where
accommodations that are part of a multisite time-share plan are
located. Separate phases of a time-share property in a specific
geographic location and under common management shall not be deemed a
component site.
(h) "Conspicuous type" means either of the following:
(1) Type in uppercase and lowercase letters two point sizes larger
than the nearest nonconspicuous type, exclusive of headings, on the
page on which it appears but in at least 10-point type.
(2) Conspicuous type may be utilized in contracts for purchase or
public permits only where required by law or as authorized by the
commissioner.
(i) "Developer" means and includes any person who creates a
time-share plan or is in the business of selling time-share
interests, other than those employees or agents of the developer who
sell time-share interests on the developer's behalf, or retains
agents to do the same, or any person who succeeds to the interest of
a developer by sale, lease, assignment, mortgage, or other transfer,
but the term includes only those persons who offer time-share
interests for disposition in the ordinary course of business.
(j) "Dispose" or "disposition" means a voluntary transfer or
assignment of any legal or equitable interest in a time-share plan,
other than the transfer, assignment, or release of a security
interest.
(k) "Exchange company" means any person owning or operating, or
both owning and operating, an exchange program.
( l ) "Exchange program" means any method,
arrangement, or procedure for the voluntary exchange of time-share
interests or other property interests. The term does not include the
assignment of the right to use and occupy accommodations to owners of
time-share interests within a single-site time-share plan. Any
method, arrangement, or procedure that otherwise meets this
definition in which the purchaser's total contractual financial
obligation exceeds three thousand dollars ($3,000) per any
individual, recurring time-share period, shall be regulated as a
time-share plan in accordance with this chapter. For purposes of
determining the purchaser's total contractual financial obligation,
amounts to be paid as a result of renewals and options to renew shall
be included in the term except for the following: (1) amounts to be
paid as a result of any optional renewal that a purchaser, in his or
her sole discretion may elect to exercise, (2) amounts to be paid as
a result of any automatic renewal in which the purchaser has a right
to terminate during the renewal period at any time and receive a pro
rata refund for the remaining unexpired renewal term, or (3) amounts
to be paid as a result of an automatic renewal in which the purchaser
receives a written notice no less than 30 nor more than 90 days
prior to the date of renewal informing the purchaser of the right to
terminate prior to the date of renewal. Notwithstanding these
exceptions, if the contractual financial obligation exceeds three
thousand dollars ($3,000) for any three-year period of any renewal
term, amounts to be paid as a result of that renewal shall be
included in determining the purchaser's total contractual financial
obligation.
(m) "Incidental benefit" is an accommodation, product, service,
discount, or other benefit, other than an exchange program, that is
offered to a prospective purchaser of a time-share interest prior to
the end of the rescission period set forth in Section 11238, the
continuing availability of which for the use and enjoyment of owners
of time-share interests in the time-share plan is limited to a term
of not more than three years, subject to renewal or extension. The
term shall not include an offer of the use of the accommodation,
product, service, discount, or other benefit on a free or discounted
one-time basis.
(n) "Managing entity" means the person who undertakes the duties,
responsibilities, and obligations of the management of a time-share
plan.
(o) "Offer" means any inducement, solicitation, or other attempt,
whether by marketing, advertisement, oral or written presentation, or
any other means, to encourage a person to acquire a time-share
interest in a time-share plan, other than as security for an
obligation.
(p) "Person" means a natural person, corporation, limited
liability company, partnership, joint venture, association, estate,
trust, government, governmental subdivision or agency, or other legal
entity, or any combination thereof.
(q) "Promotion"
means a plan or device, including one involving the possibility of a
prospective purchaser receiving a vacation, discount vacation, gift,
or prize, used by a developer, or an agent, independent contractor,
or employee of any of the same on behalf of the developer, in
connection with the offering and sale of time-share interests in a
time-share plan.
(r) "Public report" means a preliminary public report, conditional
public report, final public report, or other such disclosure
document authorized for use in connection with the offering of
time-share interests pursuant to this chapter.
(s) "Purchaser" means any person, other than a developer, who by
means of a voluntary transfer for consideration acquires a legal or
equitable interest in a time-share plan other than as security for an
obligation.
(t) "Purchase contract" means a document pursuant to which a
developer becomes legally obligated to sell, and a purchaser becomes
legally obligated to buy, a time-share interest.
(u) "Reservation system" means the method, arrangement, or
procedure by which a purchaser, in order to reserve the use or
occupancy of any accommodation of a multisite time-share plan for one
or more time-share periods, is required to compete with other
purchasers in the same multisite time-share plan regardless of
whether the reservation system is operated and maintained by the
multisite time-share plan managing entity, an exchange company, or
any other person. If a purchaser is required to use an exchange
program as the purchaser's principal means of obtaining the right to
use and occupy accommodations in a multisite time-share plan, that
arrangement shall be deemed a reservation system. When an exchange
company utilizes a mechanism for the exchange of use of time-share
periods among members of an exchange program, that utilization is not
a reservation system of a multisite time-share plan.
(v) "Short-term product" means the right to use accommodations on
a one-time or recurring basis for a period or periods not to exceed
30 days per stay and for a term of three years or less, and that
includes an agreement that all or a portion of the consideration paid
by a person for the short-term product will be applied to or
credited against the price of a future purchase of a time-share
interest or that the cost of a future purchase of a time-share
interest will be fixed or locked-in at a specified price.
(w) "Time-share instrument" means one or more documents, by
whatever name denominated, creating or governing the operation of a
time-share plan and includes the declaration dedicating
accommodations to the time-share plan.
(x) "Time-share interest" means and includes either of the
following:
(1) A "time-share estate," which is the right to occupy a
time-share property, coupled with a freehold estate or an estate for
years with a future interest in a time-share property or a specified
portion thereof.
(2) A "time-share use," which is the right to occupy a time-share
property, which right is neither coupled with a freehold interest,
nor coupled with an estate for years with a future interest, in a
time-share property.
(y) "Time-share period" means the period or periods of time when
the purchaser of a time-share plan is afforded the opportunity to use
the accommodations of a time-share plan.
(z) "Time-share plan" means any arrangement, plan, scheme, or
similar device, other than an exchange program, whether by membership
agreement, sale, lease, deed, license, right to use agreement, or by
any other means, whereby a purchaser, in exchange for consideration,
receives ownership rights in or the right to use accommodations for
a period of time less than a full year during any given year, on a
recurring basis for more than one year, but not necessarily for
consecutive years. A time-share plan may be either of the following:
(1) A "single-site time-share plan" that is the right to use
accommodations at a single time-share property.
(2) A "multisite time-share plan" that includes either of the
following:
(A) A "specific time-share interest" that is the right to use
accommodations at a specific time-share property, together with use
rights in accommodations at one or more other component sites created
by or acquired through the time-share plan's reservation system.
(B) A "nonspecific time-share interest" that is the right to use
accommodations at more than one component site created by or acquired
through the time-share plan's reservation system, but including no
specific right to use any particular accommodations.
(aa) "Time-share property" means one or more accommodations
subject to the same time-share instrument, together with any other
property or rights to property appurtenant to those accommodations.
This section shall become operative on July 1, 2018.
SEC. 123. Section 11267 of the Business and
Professions Code is amended to read:
11267. (a) The time-share instruments shall require the
employment of a managing entity for the time-share plan or component
site pursuant to a written management agreement that shall include
all of the following provisions:
(1) Delegation of authority to the managing entity to carry out
the duties and obligations of the association or the developer to the
time-share interest owners.
(2) Authority of the managing entity to employ subagents, if
applicable.
(3) A term of not more than five years with automatic renewals for
successive three-year periods after expiration of the first term
unless the association by the vote or written assent of a majority of
the voting power residing in members other than the developer
determines not to renew the contract and gives appropriate notice of
that determination. However, in those time-share plans where the
association is controlled by owners other than the developer, the
management agreement shall not be subject to the term limitations set
forth in this section, and any longer term shall not be grounds for
denial of a public report, unless the longer term of the management
contract is the result of the developer exercising control.
(4) Termination for cause at any time by the governing body of the
association. If the single site time-share plan or the component
site of a multisite time-share plan is located within the state, then
that termination provision shall include a provision for arbitration
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association if requested by or on behalf of the managing
entity.
(5) Not less than 90 days' written notice to the association of
the intention of the managing entity to resign.
(6) Enumeration of the powers and duties of the managing entity in
the operation of time-share plan and the maintenance of the
accommodations comprising the time-share plan.
(7) Compensation to be paid to the managing entity.
(8) Records to be maintained by the managing entity.
(9) A requirement that the managing entity provide a policy for
fidelity insurance or bond for the activities of the managing entity,
payable to the association, which shall be in an amount no less than
the sum of the largest amount of funds expected to be held or
controlled by the managing entity at any time during the year,
pursuant to the budget. The commissioner may provide a reduction in
the insurance policy or bond amounts required by this paragraph.
(10) Errors and omissions insurance coverage for the managing
entity, if available.
(11) Delineation of the authority of the managing entity and
persons authorized by the managing entity to enter into
accommodations of the time-share plan for the purpose of cleaning,
maid service, maintenance and repair including emergency repairs, and
for the purpose of abating a nuisance or dangerous, unlawful, or
prohibited activity being conducted in the accommodation.
(12) Description of the duties of the managing entity, including,
but not limited to, the following:
(A) Collection of all assessments as provided in the time-share
instruments.
(B) Maintenance of all books and records concerning the time-share
plan.
(C) Scheduling occupancy of accommodations, when purchasers are
not entitled to use specific time-share periods, so that all
purchasers will be provided the opportunity for use and possession of
the accommodations of the time-share plan, that they have purchased.
(D) Providing for the annual meeting of the association of owners.
(E) Performing any other functions and duties related to the
maintenance of the accommodations or that are required by the
time-share instrument.
(b) Any written management agreement in existence as of the
effective date of this chapter shall not be subject to the term
limitations set forth above.
(c) For single site time-share plans and component sites of a
multisite time-share plan located outside of the state, the
time-share instruments shall include the subject matter set forth in
subdivision (a). The time-share instruments shall be in compliance
with the applicable laws of the state or jurisdiction in which the
time-share property or component site is located, and if a conflict
exists between laws of the situs state and the requirements set forth
in this section, the law of the situs state shall control. If the
time-share instruments provide for the matters contained in
subdivision (a), the time-share instruments shall be deemed to be in
compliance with the requirements of subdivision (a) and the developer
shall not be required to make revisions in order to comply with
subdivision (a) and this subdivision.
(d) This section shall repeal on July 1, 2018.
SEC. 124. Section 11267 is added to the
Business and Professions Code, to read:
11267. (a) The time-share instruments shall require the use of a
managing entity for the time-share plan or component site pursuant to
a written management agreement that shall include all of the
following provisions:
(1) Delegation of authority to the managing entity to carry out
the duties and obligations of the association or the developer to the
time-share interest owners.
(2) Authority of the managing entity to use subagents, if
applicable.
(3) A term of not more than five years with automatic renewals for
successive three-year periods after expiration of the first term
unless the association by the vote or written assent of a majority of
the voting power residing in members other than the developer
determines not to renew the contract and gives appropriate notice of
that determination. However, in those time-share plans where the
association is controlled by owners other than the developer, the
management agreement shall not be subject to the term limitations set
forth in this section, and any longer term shall not be grounds for
denial of a public report, unless the longer term of the management
contract is the result of the developer exercising control.
(4) Termination for cause at any time by the governing body of the
association. If the single-site time-share plan or the component
site of a multisite time-share plan is located within the state, then
that termination provision shall include a provision for arbitration
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association if requested by or on behalf of the managing
entity.
(5) Not less than 90 days' written notice to the association of
the intention of the managing entity to resign.
(6) Enumeration of the powers and duties of the managing entity in
the operation of the time-share plan and the maintenance of the
accommodations comprising the time-share plan.
(7) Compensation to be paid to the managing entity.
(8) Records to be maintained by the managing entity.
(9) A requirement that the managing entity provide a policy for
fidelity insurance or bond for the activities of the managing entity,
payable to the association, that shall be in an amount no less than
the sum of the largest amount of funds expected to be held or
controlled by the managing entity at any time during the year,
pursuant to the budget. The commissioner may provide a reduction in
the insurance policy or bond amounts required by this paragraph.
(10) Errors and omissions of insurance coverage for the managing
entity, if available.
(11) Delineation of the authority of the managing entity and
persons authorized by the managing entity to enter into
accommodations of the time-share plan for the purpose of cleaning,
maid service, maintenance, and repair, including emergency repairs,
and for the purpose of abating a nuisance or dangerous, unlawful, or
prohibited activity being conducted in the accommodation.
(12) Description of the duties of the managing entity, including,
but not limited to, the following:
(A) Collection of all assessments as provided in the time-share
instruments.
(B) Maintenance of all books and records concerning the time-share
plan.
(C) Scheduling occupancy of accommodations, when purchasers are
not entitled to use specific time-share periods, so that all
purchasers will be provided the opportunity for use and possession of
the accommodations of the time-share plan, that they have purchased.
(D) Providing for the annual meeting of the association of owners.
(E) Performing any other functions and duties related to the
maintenance of the accommodations or that are required by the
time-share instrument.
(b) Any written management agreement in existence as of the
effective date of this chapter shall not be subject to the term
limitations set forth above.
(c) For single-site time-share plans and component sites of a
multisite time-share plan located outside of the state, the
time-share instruments shall include the subject matter set forth in
subdivision (a). The time-share instruments shall be in compliance
with the applicable laws of the state or jurisdiction in which the
time-share property or component site is located, and if a conflict
exists between laws of the situs state and the requirements set forth
in this section, the law of the situs state shall control. If the
time-share instruments provide for the matters contained in
subdivision (a), the time-share instruments shall be deemed to be in
compliance with the requirements of subdivision (a), and the
developer shall not be required to make revisions in order to comply
with subdivision (a) and this subdivision.
(d) This section shall become operative on July 1, 2018.
SEC. 125. Article 6 (commencing with Section
1086) is added to Chapter 1 of Title 4 of Part 4 of Division 2 of the
Civil Code, to read:
Article 6. Real Estate License Listings for the Transfer of
Certain Property
1086. (a) For the purposes of this article, the definitions in
Chapter 1 (commencing with Section 10000) of Part 1 of Division 4 of
the Business and Professions Code shall apply.
1087. (a) A multiple listing service (MLS) is a facility of
cooperation of real estate brokers and appraisers, operating through
an intermediary that does not itself act as a real estate licensee or
appraiser, through which real estate brokers establish express or
implied contracts for compensation between real estate brokers that
are MLS participants in accordance with its MLS rules with respect to
listed properties, or that may be used by real estate licensees and
appraisers, pursuant to the rules of the service, to prepare market
evaluations and appraisals of real property.
1088. A listing may not be placed in a multiple listing service
unless authorized or directed by the owner in the listing.
If a real estate licensee or appraiser places a listing or other
information in the multiple listing service, that real estate
licensee or appraiser shall be responsible for the truth of all
representations and statements made by the real estate licensee or
appraiser of which that real estate licensee or appraiser had
knowledge or reasonably should have had knowledge to anyone injured
by their falseness or inaccuracy.
1089.5. Subject to the limitations, conditions, and requirements
of Chapter 18 (commencing with Section 10000) of Part 5 of Division 7
of the Probate Code, this article applies to real property defined
in Section 1086 that is covered by a contract described in Section
10150 of the Probate Code.
1090. Nothing in this article shall preclude a listing licensee
from also being the buyer's licensee.
1090.2. This article shall become operative on July 1, 2018.
SEC. 126. Section 1090.2 is added to the Civil
Code, to read:
1090.2. This article shall repeal on July 1, 2018.
SEC. 127. Section 1102 of the Civil Code is
amended to read:
1102. (a) Except as provided in Section 1102.2, this article
applies to any transfer by sale, exchange, installment land sale
contract, as defined in Section 2985, lease with an option to
purchase, any other option to purchase, or ground lease coupled with
improvements, of real property or residential stock cooperative,
improved with or consisting of not less than one nor more than four
dwelling units.
(b) Except as provided in Section 1102.2, this article shall apply
to a resale transaction entered into on or after January 1, 2000,
for a manufactured home, as defined in Section 18007 of the Health
and Safety Code, or a mobilehome, as defined in Section 18008 of the
Health and Safety Code, which manufactured home or mobilehome is
classified as personal property and intended for use as a residence.
(c) Any waiver of the requirements of this article is void as
against public policy.
(d) This section shall repeal on July 1, 2018.
SEC. 128. Section 1102 is added to the Civil
Code, to read:
1102. (a) Except as provided in Section 1102.2, this article
applies to any sales of residential property.
(b) For the purposes of this article, the definitions in Chapter 1
(commencing with Section 10000) of Part 1 of Division 4 of the
Business and Professions Code shall apply.
(c) Any waiver of the requirements of this article is void as
against public policy.
(d) This section shall become operative on July 1, 2018.
SEC. 129. Section 1102.1 of the Civil Code is
amended to read:
1102.1. (a) In enacting Chapter 817 of the Statutes of 1994, it
was the intent of the Legislature to clarify and facilitate the use
of the real estate disclosure statement, as specified in Section
1102.6. The Legislature intended the statement to be used by
transferors making disclosures required under this article and by
agents making disclosures required by Section 2079 on the agent's
portion of the real estate disclosure statement, in transfers subject
to this article. In transfers not subject to this article, agents
may make required disclosures in a separate writing. The Legislature
did not intend to affect the existing obligations of the parties to a
real estate contract, or their agents, to disclose any fact
materially affecting the value and desirability of the property,
including, but not limited to, the physical conditions of the
property and previously received reports of physical inspections
noted on the disclosure form set forth in Section 1102.6 or 1102.6a,
and that nothing in this article shall be construed to change the
duty of a real estate broker or salesperson pursuant to Section 2079.
It is also the intent of the Legislature that the delivery of a
real estate transfer disclosure statement may not be waived in an "as
is" sale, as held in Loughrin v. Superior Court (1993) 15 Cal. App.
4th 1188.
(b) In enacting Chapter 677 of the Statutes of 1996, it was the
intent of the Legislature to clarify and facilitate the use of the
manufactured home and mobilehome transfer disclosure statement
applicable to the resale of a manufactured home or mobilehome
pursuant to subdivision (b) of Section 1102. The Legislature intended
the statements to be used by transferors making disclosures required
under this article and by agents making disclosures required by
Section 2079 on the agent's portion of the disclosure statement and
as required by Section 18046 of the Health and Safety Code on the
dealer's portion of the manufactured home and mobilehome transfer
disclosure statement, in transfers subject to this article. In
transfers not subject to this article, agents may make required
disclosures in a separate writing. The Legislature did not intend to
affect the existing obligations of the parties to a real estate
contract, or their agents, to disclose any fact materially affecting
the value and desirability of the property, including, but not
limited to, the physical conditions of the property and previously
received reports of physical inspections noted on the disclosure form
set forth in Section 1102.6 or 1102.6a or to affect the existing
obligations of the parties to a manufactured home or mobilehome
purchase contract, and nothing in this article shall be construed to
change the duty of a real estate broker or salesperson pursuant to
Section 2079 or the duty of a manufactured home or mobilehome dealer
or salesperson pursuant to Section 18046 of the Health and Safety
Code.
It is also the intent of the Legislature that the delivery of a
mobilehome transfer disclosure statement may not be waived in an "as
is" sale.
(c) It is the intent of the Legislature that manufactured home and
mobilehome dealers and salespersons and real estate brokers and
salespersons use the form provided pursuant to Section 1102.6d. It is
also the intent of the Legislature for sellers of manufactured homes
or mobilehomes who are neither manufactured home dealers or
salespersons nor real estate brokers or salespersons to use the
Manufactured Home/Mobilehome Transfer Disclosure Statement contained
in Section 1102.6d.
(d) This section shall repeal on July 1, 2018.
SEC. 130. Section 1102.1 is added to the Civil
Code, to read:
1102.1. (a) In enacting Chapter 817 of the Statutes of 1994, it
was the intent of the Legislature to clarify and facilitate the use
of the real estate disclosure statement, as specified in Section
1102.6. The Legislature intended the statement to be used by sellers
making disclosures required under this article and by real estate
licensees making disclosures required by Section 2079 on the real
estate licensee's portion of the real estate disclosure statement, in
transfers subject to this article. In transfers not subject to this
article, real estate licensees may make required disclosures in a
separate writing. The Legislature did not intend to affect the
existing obligations of the parties to a real estate contract, or
their retained real estate licensees, to disclose any known fact
materially affecting the value and desirability of the property,
including, but not limited to, the physical conditions of the
property and previously received reports of physical inspections
noted on the disclosure form set forth in Section 1102.6 or 1102.6a,
and that nothing in this article shall be construed to change the
duty of a real estate broker or salesperson pursuant to Section 2079.
It is also the intent of the Legislature that the delivery of a
real estate transfer disclosure statement may not be waived in an "as
is" sale, as held in Loughrin v. Superior Court (1993) 15
Cal.App.4th 1188.
(b) In enacting Chapter 677 of the Statutes of 1996, it was the
intent of the Legislature to clarify and facilitate the use of the
manufactured home and mobilehome transfer disclosure statement
applicable to the resale of a manufactured home or mobilehome
pursuant to subdivision (b) of Section 1102. The Legislature intended
the statements to be used by sellers making disclosures required
under this article and by real estate licensees making disclosures
required by Section 2079 on the real
estate licensee's portion of the disclosure statement
and as required by Section 18046 of the Health and Safety Code on
the dealer's portion of the manufactured home and mobilehome transfer
disclosure statement, in transfers subject to this article. In
transfers not subject to this article, real estate licensees may make
required disclosures in a separate writing. The Legislature did not
intend to affect the existing obligations of the parties to a real
estate contract, or their real estate licensees, to disclose any fact
materially affecting the value and desirability of the property,
including, but not limited to, the physical conditions of the
property and previously received reports of physical inspections
noted on the disclosure form set forth in Section 1102.6 or 1102.6a
or to affect the existing obligations of the parties to a
manufactured home or mobilehome purchase contract, and nothing in
this article shall be construed to change the duty of a real estate
broker or salesperson pursuant to Section 2079 or the duty of a
manufactured home or mobilehome dealer or salesperson pursuant to
Section 18046 of the Health and Safety Code.
It is also the intent of the Legislature that the delivery of a
mobilehome transfer disclosure statement may not be waived in an "as
is" sale.
(c) It is the intent of the Legislature that manufactured home and
mobilehome dealers and salespersons and real estate brokers and
salespersons use the form provided pursuant to Section 1102.6d. It is
also the intent of the Legislature for sellers of manufactured homes
or mobilehomes who are neither manufactured home dealers or
salespersons nor real estate brokers or salespersons to use the
Manufactured Home/Mobilehome Transfer Disclosure Statement contained
in Section 1102.6d.
(d) This section shall become operative on July 1, 2018.
SEC. 131. Section 1102.2 of the Civil Code is
amended to read:
1102.2. This article does not apply to the following:
(a) Transfers which are required to be preceded by the furnishing
to a prospective transferee of a copy of a public report pursuant to
Section 11018.1 of the Business and Professions Code and transfers
which can be made without a public report pursuant to Section 11010.4
of the Business and Professions Code.
(b) Transfers pursuant to court order, including, but not limited
to, transfers ordered by a probate court in the administration of an
estate, transfers pursuant to a writ of execution, transfers by any
foreclosure sale, transfers by a trustee in bankruptcy, transfers by
eminent domain, and transfers resulting from a decree for specific
performance.
(c) Transfers to a mortgagee by a mortgagor or successor in
interest who is in default, transfers to a beneficiary of a deed of
trust by a trustor or successor in interest who is in default,
transfers by any foreclosure sale after default, transfers by any
foreclosure sale after default in an obligation secured by a
mortgage, transfers by a sale under a power of sale or any
foreclosure sale under a decree of foreclosure after default in an
obligation secured by a deed of trust or secured by any other
instrument containing a power of sale, transfers by a mortgagee or a
beneficiary under a deed of trust who has acquired the real property
at a sale conducted pursuant to a power of sale under a mortgage or
deed of trust or a sale pursuant to a decree of foreclosure or has
acquired the real property by a deed in lieu of foreclosure,
transfers to the legal owner or lienholder of a manufactured home or
mobilehome by a registered owner or successor in interest who is in
default, or transfers by reason of any foreclosure of a security
interest in a manufactured home or mobilehome.
(d) Transfers by a fiduciary in the course of the administration
of a decedent's estate, guardianship, conservatorship, or trust. This
exemption shall not apply to a transfer if the trustee is a natural
person who is sole trustee of a revocable trust and he or she is a
former owner of the property or an occupant in possession of the
property within the preceding year.
(e) Transfers from one coowner to one or more other coowners.
(f) Transfers made to a spouse, or to a person or persons in the
lineal line of consanguinity of one or more of the transferors.
(g) Transfers between spouses resulting from a judgment of
dissolution of marriage or of legal separation or from a property
settlement agreement incidental to that judgment.
(h) Transfers by the Controller in the course of administering
Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the
Code of Civil Procedure.
(i) Transfers under Chapter 7 (commencing with Section 3691) or
Chapter 8 (commencing with Section 3771) of Part 6 of Division 1 of
the Revenue and Taxation Code.
(j) Transfers or exchanges to or from any governmental entity.
This section shall repeal on July 1, 2018.
SEC. 132. Section 1102.2 is added to the Civil
Code, to read:
1102.2. This article does not apply to the following:
(a) Sales which are required to be preceded by the furnishing to a
prospective buyer of a copy of a public report pursuant to Section
11018.1 of the Business and Professions Code and transfers that can
be made without a public report pursuant to Section 11010.4 of the
Business and Professions Code.
(b) Sales pursuant to court order, including, but not limited to,
sales ordered by a probate court in the administration of an estate,
sales pursuant to a writ of execution, transfers by any foreclosure
sale, sales by a trustee in bankruptcy, sales by eminent domain, and
sales resulting from a decree for specific performance.
(c) Sales to a mortgagee by a mortgagor or successor in interest
who is in default, sales to a beneficiary of a deed of trust by a
trustor or successor in interest who is in default, sales by any
foreclosure sale after default, sales by any foreclosure sale after
default in an obligation secured by a mortgage, a sale under a power
of sale or any foreclosure sale under a decree of foreclosure after
default in an obligation secured by a deed of trust or secured by any
other instrument containing a power of sale, sales by a mortgagee or
a beneficiary under a deed of trust who has acquired the real
property at a sale conducted pursuant to a power of sale under a
mortgage or deed of trust or a sale pursuant to a decree of
foreclosure or has acquired the real property by a deed in lieu of
foreclosure, sales to the legal owner or lienholder of a manufactured
home or mobilehome by a registered owner or successor in interest
who is in default, or sales by reason of any foreclosure of a
security interest in a manufactured home or mobilehome.
(d) Sales by a fiduciary in the course of the administration of a
trust, guardianship, conservatorship, or decedent's estate. This
exemption shall not apply to a transfer if the trustee is a natural
person who is sole trustee of a revocable trust and he or she is a
former owner of the property or an occupant in possession of the
property within the preceding year.
(e) Sales from one coowner to one or more other coowners.
(f) Sales made to a spouse, or to a person or persons in the
lineal line of consanguinity of one or more of the sellers.
(g) Sales between spouses resulting from a judgment of dissolution
of marriage or of legal separation or from a property settlement
agreement incidental to that judgment.
(h) Sales by the Controller in the course of administering Chapter
7 (commencing with Section 1500) of Title 10 of Part 3 of the Code
of Civil Procedure.
(i) Sales under Chapter 7 (commencing with Section 3691) or
Chapter 8 (commencing with Section 3771) of Part 6 of Division 1 of
the Revenue and Taxation Code.
(j) Transfers or exchanges to or from any governmental entity.
(k) With regard to transfers of multiuse properties, the transfer
of any portion of the property not constituting residential property
with one-to-four dwelling units.
This section shall become operative on July 1, 2018.
SEC. 133. Section 1102.3 of the Civil Code is
amended to read:
1102.3. The transferor of any real property subject to this
article shall deliver to the prospective transferee the written
statement required by this article, as follows:
(a) In the case of a sale, as soon as practicable before transfer
of title.
(b) In the case of transfer by a real property sales contract, as
defined in Section 2985, or by a lease together with an option to
purchase, or a ground lease coupled with improvements, as soon as
practicable before execution of the contract. For the purpose of this
subdivision, "execution" means the making or acceptance of an offer.
With respect to any transfer subject to subdivision (a) or (b),
the transferor shall indicate compliance with this article either on
the receipt for deposit, the real property sales contract, the lease,
or any addendum attached thereto or on a separate document.
If any disclosure, or any material amendment of any disclosure,
required to be made by this article, is delivered after the execution
of an offer to purchase, the transferee shall have three days after
delivery in person or five days after delivery by deposit in the
mail, to terminate his or her offer by delivery of a written notice
of termination to the transferor or the transferor's agent.
This section shall repeal on July 1, 2018.
SEC. 134. Section 1102.3 is added to the Civil
Code, to read:
1102.3. The seller of any real property subject to this article
shall deliver to the prospective buyer the written statement required
by this article, as follows:
(a) In the case of a sale, as soon as practicable before transfer
of title.
(b) In the case of sale by a real property sales contract, as
defined in Section 2985, or by a lease together with an option to
purchase, or a ground lease coupled with improvements, as soon as
practicable before execution of the contract. For the purpose of this
subdivision, "execution" means the making or acceptance of an offer.
(c) With respect to any sale subject to subdivision (a) or (b),
the seller shall indicate compliance with this article on the real
property sales contract, the lease, or any addendum attached thereto
or on a separate document.
If any disclosure, or any material amendment of any disclosure,
required to be made by this article, is delivered after the execution
of an offer to purchase, the prospective buyer shall have three days
after delivery in person or five days after delivery by deposit in
the mail, to terminate his or her offer by delivery of a written
notice of termination to the seller or the seller's licensee. The
disclosure is complete when sections I, II, and III in the form
described in Section 1102.6 are completed and delivered. A real
estate licensee may complete his or her portion of the required
disclosure by using a comparable form that includes all of the
information on the licensee's inspection disclosure set forth in
Section 1102.6.
This section shall become operative on July 1, 2018.
SEC. 135. Section 1102.4 of the Civil Code is
amended to read:
1102.4. (a) Neither the transferor nor any listing or selling
agent shall be liable for any error, inaccuracy, or omission of any
information delivered pursuant to this article 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 other persons providing
information as specified in subdivision (c) that is required to be
disclosed pursuant to this article, and ordinary care was exercised
in obtaining and transmitting it.
(b) The delivery of any information required to be disclosed by
this article to a prospective transferee by a public agency or other
person providing information required to be disclosed pursuant to
this article shall be deemed to comply with the requirements of this
article and shall relieve the transferor or any listing or selling
agent of any further duty under this article with respect to that
item of information.
(c) The delivery of a report or opinion prepared by a licensed
engineer, land surveyor, geologist, structural pest control operator,
contractor, or other expert, dealing with matters within the scope
of the professional's license or expertise, shall be sufficient
compliance for application of the exemption provided by subdivision
(a) if the information is provided to the prospective transferee
pursuant to a request therefor, whether written or oral. In
responding to such a request, an expert may indicate, in writing, an
understanding that the information provided will be used in
fulfilling the requirements of Section 1102.6 and, if so, shall
indicate the required disclosures, or parts thereof, to which the
information being furnished is applicable. Where such a statement is
furnished, the expert shall not be responsible for any items of
information, or parts thereof, other than those expressly set forth
in the statement.
(d) This section shall repeal on July 1, 2018.
SEC. 136. Section 1102.4 is added to the Civil
Code, to read:
1102.4. (a) Neither the seller nor any listing or buyer's
licensee shall be liable for any error, inaccuracy, or omission of
any information delivered pursuant to this article if the error,
inaccuracy, or omission was not within the personal knowledge of the
seller or that listing or buyer's licensee, was based on information
timely provided by public agencies or by other persons providing
information as specified in subdivision (c) that is required to be
disclosed pursuant to this article, and ordinary care was exercised
in obtaining and transmitting it.
(b) The delivery of any information required to be disclosed by
this article to a prospective buyer by a public agency or other
person providing information required to be disclosed pursuant to
this article shall be deemed to comply with the requirements of this
article and shall relieve the seller or any listing or buyer's
licensee of any further duty under this article with respect to that
item of information.
(c) The delivery of a report or opinion prepared by a licensed
engineer, land surveyor, geologist, structural pest control operator,
contractor, or other expert, dealing with matters within the scope
of the professional's license or expertise, shall be sufficient
compliance for application of the exemption provided by subdivision
(a) if the information is provided to the prospective buyer pursuant
to a request therefor, whether written or oral.
(d) This section shall become operative on July 1, 2018.
SEC. 137. Section 1102.5 of the Civil Code is
amended to read:
1102.5. (a) If information disclosed in accordance with this
article is subsequently rendered inaccurate as a result of any act,
occurrence, or agreement subsequent to the delivery of the required
disclosures, the inaccuracy resulting therefrom does not constitute a
violation of this article. If at the time the disclosures are
required to be made, an item of information required to be disclosed
is unknown or not available to the transferor, and the transferor or
his or her agent has made a reasonable effort to ascertain it, the
transferor may use an approximation of the information, provided the
approximation is clearly identified as such, is reasonable, is based
on the best information available to the transferor or his or her
agent, and is not used for the purpose of circumventing or evading
this article.
(b) This section shall repeal on July 1, 2018.
SEC. 138. Section 1102.5 is added to the Civil
Code, to read:
1102.5. (a) If information disclosed in accordance with this
article is subsequently rendered inaccurate as a result of any act,
occurrence, or agreement subsequent to the delivery of the required
disclosures, any inaccuracy resulting therefrom does not constitute a
violation of this article. If at the time the disclosures are
required to be made, an item of information required to be disclosed
is unknown or not available to the seller, and the seller or his or
her real estate licensee has made a reasonable effort to ascertain
it, the seller may use an approximation of the information, provided
the approximation is clearly identified as such, is reasonable, is
based on the best information reasonably available to the seller or
his or her real estate licensee, and is not used for the purpose of
circumventing or evading this article.
(b) This section shall become operative on July 1, 2018.
SEC. 139. Section 1102.6a of the Civil Code is
amended to read:
1102.6a. (a) On and after July 1, 1990, any city or county may
elect to require disclosures on the form set forth in subdivision (b)
in addition to those disclosures required by Section 1102.6.
However, this section does not affect or limit the authority of a
city or county to require disclosures on a different disclosure form
in connection with transactions subject to this article pursuant to
an ordinance adopted prior to July 1, 1990. An ordinance like this
adopted prior to July 1, 1990, may be amended thereafter to revise
the disclosure requirements of the ordinance, in the discretion of
the city council or county board of supervisors.
(b) Disclosures required pursuant to this section pertaining to
the property proposed to be transferred, shall be set forth in, and
shall be made on a copy of, the following disclosure form:
GRAPHIC INSERT HERE: SEE PRINTED VERSION OF THE BILL]
(c) This section does not preclude the use of addenda to the form
specified in subdivision (b) to facilitate the required disclosures.
This section does not preclude a city or county from using the
disclosure form specified in subdivision (b) for a purpose other than
that specified in this section.
(d) (1) On and after January 1, 2005, if a city or county adopts a
different or additional disclosure form pursuant to this section
regarding the proximity or effects of an airport, the statement in
that form shall contain, at a minimum, the information in the
statement "Notice of Airport in Vicinity" found in Section 11010 of
the Business and Professions Code, or Section 1103.4 or 4255.
(2) On and after January 1, 2006, if a city or county does not
adopt a different or additional disclosure form pursuant to this
section, then the provision of an "airport influence area" disclosure
pursuant to Section 11010 of the Business and Professions Code, or
Section 1103.4 or 4255, or if there is not a current airport
influence map, a written disclosure of an airport within two statute
miles, shall be deemed to satisfy any city or county requirements for
the disclosure of airports in connection with transfers of real
property.
(e) This section shall repeal on July 1, 2018.
SEC. 140. Section 1102.6a is added to the Civil
Code, to read:
1102.6a. (a) Any city or county may elect to require disclosures
on the form set forth in subdivision (b) in addition to those
disclosures required by Section 1102.6. However, this section does
not affect or limit the authority of a city or county to require
disclosures on a different disclosure form in connection with
transactions subject to this article pursuant to an ordinance adopted
prior to July 1, 1990.
(b) Disclosures required pursuant to this section pertaining to
the property proposed to be sold, shall be set forth in, and shall be
made on a copy of, the following disclosure form: GRAPHIC INSERT
HERE: SEE PRINTED VERSION OF THE BILL]
(c) This section does not preclude the use of addenda to the form
specified in subdivision (b) to facilitate the required disclosures.
This section does not preclude a city or county from using the
disclosure form specified in subdivision (b) for a purpose other than
that specified in this section.
(d) (1) On and after January 1, 2005, if a city or county adopts a
different or additional disclosure form pursuant to this section
regarding the proximity or effects of an airport, the statement in
that form shall contain, at a minimum, the information in the
statement "Notice of Airport in Vicinity" found in Section 11010 of
the Business and Professions Code, or Section 1103.4 or 4255.
(2) On and after January 1, 2006, if a city or county does not
adopt a different or additional disclosure form pursuant to this
section, then the provision of an "airport influence area" disclosure
pursuant to Section 11010 of the Business and Professions Code, or
Section 1103.4 or 4255, or if there is not a current airport
influence map, a written disclosure of an airport within two statute
miles, shall be deemed to satisfy any city or county requirements for
the disclosure of airports in connection with sales of real
property.
(e) This section shall become operative on July 1, 2018.
SEC. 141. Section 1102.6b of the Civil Code is
amended to read:
1102.6b. (a) This section applies to all transfers of real
property for which all of the following apply:
(1) The transfer is subject to this article.
(2) The property being transferred is subject to a continuing lien
securing the levy of special taxes pursuant to the Mello-Roos
Community Facilities Act (Chapter 2.5 (commencing with Section 53311)
of Part 1 of Division 2 of Title 5 of the Government Code), to a
fixed lien assessment collected in installments to secure bonds
issued pursuant to the Improvement Bond Act of 1915 (Division 10
(commencing with Section 8500) of the Streets and Highways Code), or
to a contractual assessment program authorized pursuant to Chapter 29
(commencing with Section 5898.10) of Part 3 of Division 7 of the
Streets and Highway Code.
(3) A notice is not required pursuant to Section 53341.5 of the
Government Code.
(b) In addition to any other disclosure required pursuant to this
article, the seller of any real property subject to this section
shall make a good faith effort to obtain a disclosure notice
concerning the special tax as provided for in Section 53340.2 of the
Government Code, or a disclosure notice concerning an assessment
installment as provided in Section 53754 of the Government Code, from
each local agency that levies a special tax pursuant to the
Mello-Roos Community Facilities Act, or that collects assessment
installments to secure bonds issued pursuant to the Improvement Bond
Act of 1915 (Division 10 (commencing with Section 8500) of the
Streets and Highways Code), or a disclosure notice concerning the
contractual assessment as provided in Section 5898.24 of the Streets
and Highways Code, on the property being transferred, and shall
deliver that notice or those notices to the prospective purchaser, as
long as the notices are made available by the local agency.
(c) (1) The seller of real property subject to this section may
satisfy the disclosure notice requirements in regard to the bonds
issued pursuant to the Improvement Bond Act of 1915 (Division 10
(commencing with Section
8500) of the Streets and Highways Code) by delivering a disclosure
notice that is substantially equivalent and obtained from another
source, until December 31, 2004.
(2) The seller of real property subject to this section may
satisfy the disclosure notice requirements in regard to the
assessments collected under the contractual assessment program
authorized pursuant to Chapter 29 (commencing with Section 5898.10)
of Part 3 of Division 7 of the Streets and Highway Code by delivering
a disclosure notice that is substantially equivalent and obtained
from another source.
(3) For the purposes of this section, a substantially equivalent
disclosure notice includes, but is not limited to, a copy of the most
recent year's property tax bill or an itemization of current
assessment amounts applicable to the property.
(d) (1) Notwithstanding subdivision (c), at any time after the
effective date of this section, the seller of real property subject
to this section may satisfy the disclosure notice requirements of
this section by delivering a disclosure notice obtained from a
nongovernmental source that satisfies the requirements of paragraph
(2).
(2) A notice provided by a private entity other than a designated
office, department, or bureau of the levying entity may be modified
as needed to clearly and accurately describe a special tax pursuant
to the Mello-Roos Community Facilities Act levied against the
property or to clearly and accurately consolidate information about
two or more districts that levy or are authorized to levy a special
tax pursuant to the Mello-Roos Community Facilities Act against the
property, and shall include the name of the Mello-Roos entity levying
taxes against the property, the annual tax due for the Mello-Roos
entity for the current tax year, the maximum tax that may be levied
against the property in any year, the percentage by which the maximum
tax for the Mello-Roos entity may increase per year, and the date
until the tax may be levied against the property for the Mello-Roos
entity and a contact telephone number, if available, for further
information about the Mello-Roos entity. A notice provided by a
private entity other than a designated office, department, or bureau
of the levying entity may be modified as needed to clearly and
accurately describe special assessments and bonds pursuant to the
Improvement Bond Act of 1915 levied against the property, or to
clearly and accurately consolidate information about two or more
districts that levy or are authorized to levy special assessments and
bonds pursuant to the Improvement Bond Act of 1915 against the
property, and shall include the name of the special assessments and
bonds issued pursuant to the Improvement Bond Act of 1915, the
current annual tax on the property for the special assessments and
bonds issued pursuant to the Improvement Bond Act of 1915 and a
contact telephone number, if available, for further information about
the special assessments and bonds issued pursuant to the Improvement
Bond Act of 1915.
(3) This section does not change the ability to make disclosures
pursuant to Section 1102.4 of the Civil Code.
(e) If a disclosure received pursuant to subdivision (b), (c), or
(d) has been delivered to the transferee, a seller or his or her
agent is not required to provide additional information concerning,
and information in the disclosure shall be deemed to satisfy the
responsibility of the seller or his or her agent to inform the
transferee regarding the special tax or assessment installments and
the district. Notwithstanding subdivision (b), (c), or (d), nothing
in this section imposes a duty to discover a special tax or
assessment installments or the existence of any levying district not
actually known to the agents.
(f) This section shall repeal on July 1, 2018.
SEC. 142. Section 1102.6b is added to the Civil
Code, to read:
1102.6b. (a) This section applies to all sales of real property
for which all of the following apply:
(1) The sale is subject to this article.
(2) The property being sold is subject to a continuing lien
securing the levy of special taxes pursuant to the Mello-Roos
Community Facilities Act (Chapter 2.5 (commencing with Section 53311)
of Part 1 of Division 2 of Title 5 of the Government Code), to a
fixed lien assessment collected in installments to secure bonds
issued pursuant to the Improvement Bond Act of 1915 (Division 10
(commencing with Section 8500) of the Streets and Highways Code), or
to a contractual assessment program authorized pursuant to Chapter 29
(commencing with Section 5898.10) of Part 3 of Division 7 of the
Streets and Highway Code.
(3) A notice is not required pursuant to Section 53341.5 of the
Government Code.
(b) In addition to any other disclosure required pursuant to this
article, the seller of any real property subject to this section
shall make a good faith effort to obtain a disclosure notice
concerning the special tax as provided for in Section 53340.2 of the
Government Code, or a disclosure notice concerning an assessment
installment as provided in Section 53754 of the Government Code from
each local agency that levies a special tax pursuant to the
Mello-Roos Community Facilities Act, or that collects assessment
installments to secure bonds issued pursuant to the Improvement Bond
Act of 1915 (Division 10 (commencing with Section 8500) of the
Streets and Highways Code), or a disclosure notice concerning the
contractual assessment as provided in Section 5898.24 of the Streets
and Highways Code on the property being sold and shall deliver that
notice or those notices to the prospective buyer, as long as the
notices are made available by the local agency.
(c) (1) The seller of real property subject to this section may
satisfy the disclosure notice requirements in regard to the bonds
issued pursuant to the Improvement Bond Act of 1915 (Division 10
(commencing with Section 8500) of the Streets and Highways Code) by
delivering a disclosure notice that is substantially equivalent and
obtained from another source.
(2) The seller of real property subject to this section may
satisfy the disclosure notice requirements in regard to the
assessments collected under the contractual assessment program
authorized pursuant to Chapter 29 (commencing with Section 5898.10)
of Part 3 of Division 7 of the Streets and Highway Code by delivering
a disclosure notice that is substantially equivalent and obtained
from another source.
(3) For the purposes of this section, a substantially equivalent
disclosure notice includes, but is not limited to, a copy of the most
recent year's property tax bill or an itemization of current
assessment amounts applicable to the property.
(d) (1) Notwithstanding subdivision (c), the seller of real
property subject to this section may satisfy the disclosure notice
requirements of this section by delivering a disclosure notice
obtained from a nongovernmental source that satisfies the
requirements of paragraph (2).
(2) A notice provided by a private entity other than a designated
office, department, or bureau of the levying entity may be modified
as needed to clearly and accurately describe a special tax pursuant
to the Mello-Roos Community Facilities Act levied against the
property or to clearly and accurately consolidate information about
two or more districts that levy or are authorized to levy a special
tax pursuant to the Mello-Roos Community Facilities Act against the
property, and shall include the name of the Mello-Roos entity levying
taxes against the property, the annual tax due for the Mello-Roos
entity for the current tax year, the maximum tax that may be levied
against the property in any year, the percentage by which the maximum
tax for the Mello-Roos entity may increase per year, and the date
until the tax may be levied against the property for the Mello-Roos
entity and a contact telephone number, if available, for further
information about the Mello-Roos entity. A notice provided by a
private entity other than a designated office, department, or bureau
of the levying entity may be modified as needed to clearly and
accurately describe special assessments and bonds pursuant to the
Improvement Bond Act of 1915 levied against the property, or to
clearly and accurately consolidate information about two or more
districts that levy or are authorized to levy special assessments and
bonds pursuant to the Improvement Bond Act of 1915 against the
property, and shall include the name of the special assessments and
bonds issued pursuant to the Improvement Bond Act of 1915, the
current annual tax on the property for the special assessments and
bonds issued pursuant to the Improvement Bond Act of 1915, and a
contact telephone number, if available, for further information about
the special assessments and bonds issued pursuant to the Improvement
Bond Act of 1915.
(3) This section does not change the ability to make disclosures
pursuant to Section 1102.4 of the Civil Code.
(e) If a disclosure received pursuant to subdivision (b), (c), or
(d) has been delivered to the buyer, a seller or his or her real
estate licensee is not required to provide additional information
concerning, and information in the disclosure shall be deemed to
satisfy the responsibility of the seller or his or her real estate
licensee to inform the buyer regarding the special tax or assessment
installments and the district. Notwithstanding subdivision (b), (c),
or (d), nothing in this section imposes a duty to discover a special
tax or assessment installments or the existence of any levying
district not actually known to the real estate licensees.
(f) This section shall become operative on July 1, 2018.
SEC. 143. Section 1102.6c of the Civil Code is
amended to read:
1102.6c. (a) In addition to any other disclosure required
pursuant to this article, it shall be the sole responsibility of the
seller of any real property subject to this article, or his or her
agent, to deliver to the prospective purchaser a disclosure notice
that includes both of the following:
(1) A notice, in at least 12-point type or a contrasting color, as
follows:
"California property tax law requires the Assessor to revalue real
property at the time the ownership of the property changes. Because
of this law, you may receive one or two supplemental tax bills,
depending on when your loan closes.
The supplemental tax bills are not mailed to your lender. If you
have arranged for your property tax payments to be paid through an
impound account, the supplemental tax bills will not be paid by your
lender. It is your responsibility to pay these supplemental bills
directly to the Tax Collector.
If you have any question concerning this matter, please call your
local Tax Collector's Office."
(2) A title, in at least 14-point type or a contrasting color,
that reads as follows: "Notice of Your 'Supplemental' Property Tax
Bill."
(b) The disclosure notice requirements of this section may be
satisfied by delivering a disclosure notice pursuant to Section
1102.6b that satisfies the requirements of subdivision (a).
(c) This section shall repeal on July 1, 2018.
SEC. 144. Section 1102.6c is added to the Civil
Code, to read:
1102.6c. (a) In addition to any other disclosure required
pursuant to this article, it shall be the sole responsibility of the
seller of any real property subject to this article, or his or her
real estate licensee, to deliver to the prospective buyer a
disclosure notice that includes both of the following:
(1) A notice, in at least 12-point type or a contrasting color, as
follows:
"California property tax law requires the Assessor to revalue real
property at the time the ownership of the property changes. Because
of this law, you may receive one or two supplemental tax bills,
depending on when your loan closes.
The supplemental tax bills are not mailed to your lender. If you
have arranged for your property tax payments to be paid through an
impound account, the supplemental tax bills will not be paid by your
lender. It is your responsibility to pay these supplemental bills
directly to the tax collector.
If you have any question concerning this matter, please call your
local tax collector's office."
(2) A title, in at least 14-point type or a contrasting color,
that reads as follows: "Notice of Your 'Supplemental' Property Tax
Bill."
(b) The disclosure notice requirements of this section may be
satisfied by delivering a disclosure notice pursuant to Section
1102.6b that satisfies the requirements of subdivision (a).
(c) This section shall become operative on July 1, 2018.
SEC. 145. Section 1102.9 of the Civil Code is
amended to read:
1102.9. (a) Any disclosure made pursuant to this article may be
amended in writing by the transferor or his or her agent, but the
amendment shall be subject to Section 1102.3 or 1102.3a.
(b) This section shall repeal on July 1, 2018.
SEC. 146. Section 1102.9 is added to the Civil
Code, to read:
1102.9. (a) Any disclosure made pursuant to this article may be
amended in writing by the seller or his or her real estate licensee,
but the amendment shall be subject to Section 1102.3 or 1102.3a.
(b) This section shall become operative on July 1, 2018.
SEC. 147. Section 1102.12 of the Civil Code is
amended to read:
1102.12. (a) If more than one licensed real estate broker is
acting as an agent in a transaction subject to this article, the
broker who has obtained the offer made by the transferee shall,
except as otherwise provided in this article, deliver the disclosure
required by this article to the transferee, unless the transferor has
given other written instructions for delivery.
(b) If a licensed real estate broker responsible for delivering
the disclosures under this section cannot obtain the disclosure
document required and does not have written assurance from the
transferee that the disclosure has been received, the broker shall
advise the transferee in writing of his or her rights to the
disclosure. A licensed real estate broker responsible for delivering
disclosures under this section shall maintain a record of the action
taken to effect compliance in accordance with Section 10148 of the
Business and Professions Code.
(c) This section shall repeal on July 1, 2018.
SEC. 148. Section 1102.12 is added to the Civil
Code, to read:
1102.12. (a) If more than one licensed real estate broker is
acting as a real estate licensee in a transaction subject to this
article, the buyer's licensee shall, except as otherwise provided in
this article, deliver the disclosure required by this article to the
buyer unless the seller has given other written instructions for
delivery. If there is only one real estate licensee in a transaction
subject to this article, that real estate licensee shall deliver the
disclosure required by this article to the buyer. If there is no real
estate licensee in a transaction, the seller shall deliver the
disclosure required by this article to the buyer.
(b) If a real estate licensee responsible for delivering the
disclosures under this section cannot obtain the disclosure document
required and does not have written assurance from the buyer that the
disclosure has been received, the real estate licensee shall advise
the buyer in writing of his or her rights to the disclosure. A real
estate licensee responsible for delivering disclosures under this
section shall maintain a record of the action taken to effect
compliance in accordance with Section 10148 of the Business and
Professions Code.
(c) This section shall become operative on July 1, 2018.
SEC. 149. Section 1102.14 of the Civil Code is
amended to read:
1102.14. (a) As used in this article, "listing agent" means
listing agent as defined in subdivision (f) of Section 1086.
(b) As used in this article, "selling agent" means selling agent
as defined in subdivision (g) of Section 1086, exclusive of the
requirement that the agent be a participant in a multiple listing
service as defined in Section 1087.
(c) This section shall repeal on July 1, 2018.
SEC. 150. Section 1102.155 of the Civil Code is
amended to read:
1102.155. (a) (1) The seller of residential real property subject
to this article shall disclose, in writing, that Section 1101.4 of
the Civil Code requires that California single-family residences be
equipped with water-conserving plumbing fixtures on or before January
1, 2017, and shall disclose whether the property includes any
noncompliant plumbing fixtures.
(2) The seller shall affirm that this representation is that of
the seller and not a representation of any agent, and that this
disclosure is not intended to be part of any contract between the
buyer and the seller. The seller shall further affirm that this
disclosure is not a warranty of any kind by the seller or any agent
representing any principal in the transaction and is not a substitute
for any inspections that or warranties any principal may wish to
obtain.
(b) This section shall become operative on January 1, 2017.
(c) This section shall repeal on July 1, 2018.
SEC. 151. Section 1102.155 is added to the
Civil Code, to read:
1102.155. (a) (1) The seller of residential property subject to
this article shall disclose, in writing, that Section 1101.4 requires
that California single-family residences be equipped with
water-conserving plumbing fixtures on or before January 1, 2017, and
shall disclose whether the property includes any noncompliant
plumbing fixtures as defined in subdivision (c) of Section 1101.3.
(2) The seller shall affirm that this representation is that of
the seller and not a representation of any real estate licensee and
that this disclosure is not intended to be part of any contract
between the buyer and the seller. The seller shall further affirm
that this disclosure is not a warranty of any kind by the seller or
any real estate licensee representing any principal in the
transaction and is not a substitute for any inspections or warranties
that any principal may wish to obtain.
(b) This section shall become operative on July 1, 2018.
SEC. 152. Section 1103 of the Civil Code is
amended to read:
1103. (a) Except as provided in Section 1103.1, this article
applies to the transfer by sale, exchange, installment land sale
contract, as defined in Section 2985, lease with an option to
purchase, any other option to purchase, or ground lease coupled with
improvements, of any real property described in subdivision (c), or
residential stock cooperative, improved with or consisting of not
less than one nor more than four dwelling units.
(b) Except as provided in Section 1103.1, this article shall apply
to a resale transaction entered into on or after January 1, 2000,
for a manufactured home, as defined in Section 18007 of the Health
and Safety Code, that is classified as personal property intended for
use as a residence, or a mobilehome, as defined in Section 18008 of
the Health and Safety Code, that is classified as personal property
intended for use as a residence, if the real property on which the
manufactured home or mobilehome is located is real property described
in subdivision (c).
(c) This article shall apply to the transactions described in
subdivisions (a) and (b) only if the transferor or his or her agent
is required by one or more of the following to disclose the property'
s location within a hazard zone:
(1) A person who is acting as an agent for a transferor of real
property that is located within a special flood hazard area (any type
Zone "A" or "V") designated by the Federal Emergency Management
Agency, or the transferor if he or she is acting without an agent,
shall disclose to any prospective transferee the fact that the
property is located within a special flood hazard area if either:
(A) The transferor, or the transferor's agent, has actual
knowledge that the property is within a special flood hazard area.
(B) The local jurisdiction has compiled a list, by parcel, of
properties that are within the special flood hazard area and a notice
has been posted at the offices of the county recorder, county
assessor, and county planning agency that identifies the location of
the parcel list.
(2) A person who is acting as an agent for a transferor of real
property that is located within an area of potential flooding
designated pursuant to Section 8589.5 of the Government Code, or the
transferor if he or she is acting without an agent, shall disclose to
any prospective transferee the fact that the property is located
within an area of potential flooding if either:
(A) The transferor, or the transferor's agent, has actual
knowledge that the property is within an inundation area.
(B) The local jurisdiction has compiled a list, by parcel, of
properties that are within the inundation area and a notice has been
posted at the offices of the county recorder, county assessor, and
county planning agency that identifies the location of the parcel
list.
(3) A transferor of real property that is located within a very
high fire hazard severity zone, designated pursuant to Section 51178
of the Government Code, shall disclose to any prospective transferee
the fact that the property is located within a very high fire hazard
severity zone and is subject to the requirements of Section 51182 of
the Government Code if either:
(A) The transferor, or the transferor's agent, has actual
knowledge that the property is within a very high fire hazard
severity zone.
(B) A map that includes the property has been provided to the
local agency pursuant to Section 51178 of the Government Code and a
notice has been posted at the offices of the county recorder, county
assessor, and county planning agency that identifies the location of
the map and any information regarding changes to the map received by
the local agency.
(4) A person who is acting as an agent for a transferor of real
property that is located within an earthquake fault zone, designated
pursuant to Section 2622 of the Public Resources Code, or the
transferor if he or she is acting without an agent, shall disclose to
any prospective transferee the fact that the property is located
within a delineated earthquake fault zone if either:
(A) The transferor, or the transferor's agent, has actual
knowledge that the property is within a delineated earthquake fault
zone.
(B) A map that includes the property has been provided to the city
or county pursuant to Section 2622 of the Public Resources Code and
a notice has been posted at the offices of the county recorder,
county assessor, and county planning agency that identifies the
location of the map and any information regarding changes to the map
received by the county.
(5) A person who is acting as an agent for a transferor of real
property that is located within a seismic hazard zone, designated
pursuant to Section 2696 of the Public Resources Code, or the
transferor if he or she is acting
without an agent, shall disclose to any prospective transferee
the fact that the property is located within a seismic hazard zone
if either:
(A) The transferor, or the transferor's agent, has actual
knowledge that the property is within a seismic hazard zone.
(B) A map that includes the property has been provided to the city
or county pursuant to Section 2696 of the Public Resources Code and
a notice has been posted at the offices of the county recorder,
county assessor, and county planning agency that identifies the
location of the map and any information regarding changes to the map
received by the county.
(6) A transferor of real property that is located within a state
responsibility area determined by the board, pursuant to Section 4125
of the Public Resources Code, shall disclose to any prospective
transferee the fact that the property is located within a wildland
area that may contain substantial forest fire risks and hazards and
is subject to the requirements of Section 4291 if either:
(A) The transferor, or the transferor's agent, has actual
knowledge that the property is within a wildland fire zone.
(B) A map that includes the property has been provided to the city
or county pursuant to Section 4125 of the Public Resources Code and
a notice has been posted at the offices of the county recorder,
county assessor, and county planning agency that identifies the
location of the map and any information regarding changes to the map
received by the county.
(d) Any waiver of the requirements of this article is void as
against public policy.
(e) This section shall repeal on July 1, 2018.
SEC. 153. Section 1103 is added to the Civil
Code, to read:
1103. (a) Except as provided in Section 1103.1, this article
applies to a sale, exchange, installment land sale contract, as
defined in Section 2985, lease with an option to purchase, any other
option to purchase, or ground lease coupled with improvements, of any
real property described in subdivision (c), or residential stock
cooperative, improved with or consisting of not less than one nor
more than four dwelling units.
(b) Except as provided in Section 1103.1, this article applies to
a resale transaction entered into for a manufactured home, as defined
in Section 18007 of the Health and Safety Code, that is classified
as personal property intended for use as a residence, or a
mobilehome, as defined in Section 18008 of the Health and Safety
Code, that is classified as personal property intended for use as a
residence, if the real property on which the manufactured home or
mobilehome is located is real property described in subdivision (c).
(c) This article shall apply to the transactions described in
subdivisions (a) and (b) only if the seller or his or her real estate
licensee is required by one or more of the following to disclose the
property's location within a hazard zone:
(1) A person who is acting as a real estate licensee for a seller
of real property that is located within a special flood hazard area
(any type Zone "A" or "V") designated by the Federal Emergency
Management Agency, or the seller if he or she is acting without a
real estate licensee, shall disclose to any prospective buyer the
fact that the property is located within a special flood hazard area
if either:
(A) The seller, or the seller's real estate licensee, has actual
knowledge that the property is within a special flood hazard area.
(B) The local jurisdiction has compiled a list, by parcel, of
properties that are within the special flood hazard area and a notice
has been posted at the offices of the county recorder, county
assessor, and county planning agency that identifies the location of
the parcel list.
(2) A person who is acting as a real estate licensee for a seller
of real property that is located within an area of potential flooding
designated pursuant to Section 8589.5 of the Government Code, or the
seller if he or she is acting without a real estate licensee, shall
disclose to any prospective buyer the fact that the property is
located within an area of potential flooding if either:
(A) The seller, or the seller's real estate licensee, has actual
knowledge that the property is within an inundation area.
(B) The local jurisdiction has compiled a list, by parcel, of
properties that are within the inundation area and a notice has been
posted at the offices of the county recorder, county assessor, and
county planning agency that identifies the location of the parcel
list.
(3) A seller of real property that is located within a very high
fire hazard severity zone, designated pursuant to Section 51178 of
the Government Code, shall disclose to any prospective buyer the fact
that the property is located within a very high fire hazard severity
zone and is subject to the requirements of Section 51182 of the
Government Code if either:
(A) The seller, or the seller's real estate licensee, has actual
knowledge that the property is within a very high fire hazard
severity zone.
(B) A map that includes the property has been provided to the
local agency pursuant to Section 51178 of the Government Code and a
notice has been posted at the offices of the county recorder, county
assessor, and county planning agency that identifies the location of
the map and any information regarding changes to the map received by
the local agency.
(4) A person who is acting as a real estate licensee for a seller
of real property that is located within an earthquake fault zone,
designated pursuant to Section 2622 of the Public Resources Code, or
the seller if he or she is acting without a real estate licensee,
shall disclose to any prospective buyer the fact that the property is
located within a delineated earthquake fault zone if either:
(A) The seller, or the seller's real estate licensee, has actual
knowledge that the property is within a delineated earthquake fault
zone.
(B) A map that includes the property has been provided to the city
or county pursuant to Section 2622 of the Public Resources Code and
a notice has been posted at the offices of the county recorder,
county assessor, and county planning agency that identifies the
location of the map and any information regarding changes to the map
received by the county.
(5) A person who is acting as a real estate licensee for a seller
of real property that is located within a seismic hazard zone,
designated pursuant to Section 2696 of the Public Resources Code, or
the seller if he or she is acting without a real estate licensee,
shall disclose to any prospective buyer the fact that the property is
located within a seismic hazard zone if either:
(A) The seller, or the seller's real estate licensee, has actual
knowledge that the property is within a seismic hazard zone.
(B) A map that includes the property has been provided to the city
or county pursuant to Section 2696 of the Public Resources Code and
a notice has been posted at the offices of the county recorder,
county assessor, and county planning agency that identifies the
location of the map and any information regarding changes to the map
received by the county.
(6) A seller of real property that is located within a state
responsibility area determined by the board, pursuant to Section 4125
of the Public Resources Code, shall disclose to any prospective
buyer the fact that the property is located within a wildland area
that may contain substantial forest fire risks and hazards and is
subject to the requirements of Section 4291 of the Public Resources
Code if either:
(A) The seller, or the seller's real estate licensee, has actual
knowledge that the property is within a wildland fire zone.
(B) A map that includes the property has been provided to the city
or county pursuant to Section 4125 of the Public Resources Code and
a notice has been posted at the offices of the county recorder,
county assessor, and county planning agency that identifies the
location of the map and any information regarding changes to the map
received by the county.
(d) Any waiver of the requirements of this article is void as
against public policy.
(e) This section shall become operative on July 1, 2018.
SEC. 154. Section 1103.1 of the Civil Code is
amended to read:
1103.1. (a) This article does not apply to the following
transfers:
(1) Transfers pursuant to court order, including, but not limited
to, transfers ordered by a probate court in administration of an
estate, transfers pursuant to a writ of execution, transfers by any
foreclosure sale, transfers by a trustee in bankruptcy, transfers by
eminent domain, and transfers resulting from a decree for specific
performance.
(2) Transfers to a mortgagee by a mortgagor or successor in
interest who is in default, transfers to a beneficiary of a deed of
trust by a trustor or successor in interest who is in default,
transfers by any foreclosure sale after default, transfers by any
foreclosure sale after default in an obligation secured by a
mortgage, transfers by a sale under a power of sale or any
foreclosure sale under a decree of foreclosure after default in an
obligation secured by a deed of trust or secured by any other
instrument containing a power of sale, or transfers by a mortgagee or
a beneficiary under a deed of trust who has acquired the real
property at a sale conducted pursuant to a power of sale under a
mortgage or deed of trust or a sale pursuant to a decree of
foreclosure or has acquired the real property by a deed in lieu of
foreclosure.
(3) Transfers by a fiduciary in the course of the administration
of a decedent's estate, guardianship, conservatorship, or trust.
(4) Transfers from one coowner to one or more other coowners.
(5) Transfers made to a spouse, or to a person or persons in the
lineal line of consanguinity of one or more of the transferors.
(6) Transfers between spouses resulting from a judgment of
dissolution of marriage or of legal separation of the parties or from
a property settlement agreement incidental to that judgment.
(7) Transfers by the Controller in the course of administering
Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the
Code of Civil Procedure.
(8) Transfers under Chapter 7 (commencing with Section 3691) or
Chapter 8 (commencing with Section 3771) of Part 6 of Division 1 of
the Revenue and Taxation Code.
(9) Transfers or exchanges to or from any governmental entity.
(b) Transfers not subject to this article may be subject to other
disclosure requirements, including those under Sections 8589.3,
8589.4, and 51183.5 of the Government Code and Sections 2621.9, 2694,
and 4136 of the Public Resources Code. In transfers not subject to
this article, agents may make required disclosures in a separate
writing.
(c) This section shall repeal on July 1, 2018.
SEC. 155. Section 1103.1 is added to the Civil
Code, to read:
1103.1. (a) This article does not apply to the following sales:
(1) Sales pursuant to court order, including, but not limited to,
sales ordered by a probate court in administration of an estate,
sales pursuant to a writ of execution, sales by any foreclosure sale,
sales by a trustee in bankruptcy, sales by eminent domain, and sales
resulting from a decree for specific performance.
(2) Sales to a mortgagee by a mortgagor or successor in interest
who is in default, sales to a beneficiary of a deed of trust by a
trustor or successor in interest who is in default, sales by any
foreclosure sale after default, sales by any foreclosure sale after
default in an obligation secured by a mortgage, sale under a power of
sale or any foreclosure sale under a decree of foreclosure after
default in an obligation secured by a deed of trust or secured by any
other instrument containing a power of sale, or sales by a mortgagee
or a beneficiary under a deed of trust who has acquired the real
property at a sale conducted pursuant to a power of sale under a
mortgage or deed of trust or a sale pursuant to a decree of
foreclosure or has acquired the real property by a deed in lieu of
foreclosure.
(3) Sales by a fiduciary in the course of the administration of a
trust, guardianship, conservatorship, or the decedent's estate. This
exemption shall not apply to a sale if the trustee is a natural
person who is a trustee of a revocable trust and he or she is a
former owner of the property or an occupant in possession of the
property within the preceding year.
(4) Sales from one coowner to one or more other coowners.
(5) Sales made to a spouse, or to a person or persons in the
lineal line of consanguinity of one or more of the sellers.
(6) Sales between spouses resulting from a judgment of dissolution
of marriage or of legal separation of the parties or from a property
settlement agreement incidental to that judgment.
(7) Sales by the Controller in the course of administering Chapter
7 (commencing with Section 1500) of Title 10 of Part 3 of the Code
of Civil Procedure.
(8) Sales under Chapter 7 (commencing with Section 3691) or
Chapter 8 (commencing with Section 3771) of Part 6 of Division 1 of
the Revenue and Taxation Code.
(9) Sales or exchanges to or from any governmental entity.
(b) Sales not subject to this article may be subject to other
disclosure requirements, including those under Sections 8589.3,
8589.4, and 51183.5 of the Government Code and Sections 2621.9, 2694,
and 4136 of the Public Resources Code. In sales not subject to this
article, real estate licensees may make required disclosures in a
separate writing.
(c) This section shall become operative on July 1, 2018.
SEC. 156. Section 1103.1.5 is added to the
Civil Code, to read:
1103.1.5. (a) For the purposes of this article, the definitions
in Chapter 1 (commencing with Section 10000) of Part 1 of Division 4
of the Business and Professions Code shall apply.
(b) This section shall become operative on July 1, 2018.
SEC. 157. Section 1103.2 of the Civil Code is
amended to read:
1103.2. (a) The disclosures required by this article are set
forth in, and shall be made on a copy of, the following Natural
Hazard Disclosure 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
HAZARDOUS AREA(S):
A SPECIAL FLOOD HAZARD AREA (Any type Zone
""A'' or ""V'') designated by the Federal
Emergency Management Agency.
Yes ____ No ____ Do not know
and
information
not
available from
local
jurisdiction
____
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
information not
available from
local
jurisdiction
____
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
Resources Code.
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:
( ) Transferor(s) and their agent(s)
represent that the information
herein is true and correct to the best of
their knowledge as of the
date signed by the transferor(s) and agent(s).
( ) Transferor(s) and their agent(s)
acknowledge that they have
exercised good faith in the selection of a
third-party report provider
as required in Civil Code Section 1103.7, and
that the
representations made in this Natural Hazard
Disclosure Statement
are based upon information provided by the
independent third-party
disclosure provider as a substituted
disclosure pursuant to Civil Code
Section 1103.4. Neither transferor(s) nor
their agent(s) (1) has
independently verified the information
contained in this statement
and report or (2) is personally aware of any
errors or inaccuracies
in the information contained on the
statement. This statement was
prepared by the provider below:
Third-Party
Disclosure Provider(s)________ Date___________
Transferee represents that he or she has read
and understands this
document. Pursuant to Civil Code Section
1103.8, the
representations made in this Natural Hazard
Disclosure Statement
do not constitute all of the transferor's or
agent's disclosure
obligations in this transaction.
Signature of Transferee(s)____ Date___________
Signature of Transferee(s)____ Date___________
(b) If an earthquake fault zone, seismic hazard zone, very high
fire hazard severity zone, or wildland fire area map or accompanying
information is not of sufficient accuracy or scale that a reasonable
person can determine if the subject real property is included in a
natural hazard area, the transferor or transferor's agent shall mark
"Yes" on the Natural Hazard Disclosure Statement. The transferor or
transferor's agent may mark "No" on the Natural Hazard Disclosure
Statement if he or she attaches a report prepared pursuant to
subdivision (c) of Section 1103.4 that verifies the property is not
in the hazard zone. Nothing in this subdivision is intended to limit
or abridge any existing duty of the transferor or the transferor's
agents to exercise reasonable care in making a determination under
this subdivision.
(c) If the Federal Emergency Management Agency has issued a Letter
of Map Revision confirming that a property is no longer within a
special flood hazard area, then the transferor or transferor's agent
may mark "No" on the Natural Hazard Disclosure Statement, even if the
map has not yet been updated. The transferor or transferor's agent
shall attach a copy of the Letter of Map Revision to the disclosure
statement.
(d) If the Federal Emergency Management Agency has issued a Letter
of Map Revision confirming that a property is within a special flood
hazard area and the location of the letter has been posted pursuant
to subdivision (g) of Section 8589.3 of the Government Code, then the
transferor or transferor's agent shall mark "Yes" on the Natural
Hazard Disclosure Statement, even if the map has not yet been
updated. The transferor or transferor's agent shall attach a copy of
the Letter of Map Revision to the disclosure statement.
(e) The disclosure required pursuant to this article may be
provided by the transferor and the transferor's agent in the Local
Option Real Estate Disclosure Statement described in Section 1102.6a,
provided that the Local Option Real Estate Disclosure Statement
includes substantially the same information and substantially the
same warnings that are required by this section.
(f) (1) The legal effect of a consultant's report delivered to
satisfy the exemption provided by Section 1103.4 is not changed when
it is accompanied by a Natural Hazard Disclosure Statement.
(2) A consultant's report shall always be accompanied by a
completed and signed Natural Hazard Disclosure Statement.
(3) In a disclosure statement required by this section, an agent
and third-party provider may cause his or her name to be preprinted
in lieu of an original signature in the portions of the form reserved
for signatures. The use of a preprinted name shall not change the
legal effect of the acknowledgment.
(g) The disclosure required by this article is only a disclosure
between the transferor, the transferor's agents, and the transferee,
and shall not be used by any other party, including, but not limited
to, insurance companies, lenders, or governmental agencies, for any
purpose.
(h) In any transaction in which a transferor has accepted, prior
to June 1, 1998, an offer to purchase, the transferor, or his or her
agent, shall be deemed to have complied with the requirement of
subdivision (a) if the transferor or agent delivers to the
prospective transferee a statement that includes substantially the
same information and warning as the Natural Hazard Disclosure
Statement.
(i) This section shall repeal on July 1, 2018.
SEC. 158. Section 1103.2 is added to the Civil
Code, to read:
1103.2. (a) The disclosures required by this article are set
forth in, and shall be made on a copy of, the following Natural
Hazard Disclosure 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
HAZARDOUS AREA(S):
A SPECIAL FLOOD HAZARD AREA (Any type Zone
""A'' or ""V'') designated by the Federal
Emergency Management Agency.
Yes ____ No ____ Do not know
and
information
not
available from
local
jurisdiction
____
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
information not
available from
local
jurisdiction
____
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
Resources Code.
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:
( ) Seller(s) and their real estate
licensee(s) represent that the information
herein is true and correct to the best of
their knowledge as of the
date signed by the seller(s) and real estate
licensee(s).
( ) Seller(s) and their real estate
licensee(s) acknowledge that they have
exercised good faith in the selection of a
third-party report provider
as required in Civil Code Section 1103.7, and
that the
representations made in this Natural Hazard
Disclosure Statement
are based upon information provided by the
independent third-party
disclosure provider as a substituted
disclosure pursuant to Civil Code
Section 1103.4. Neither seller(s) nor their
real estate licensee(s) (1) has
independently verified the information
contained in this statement
and report or (2) is personally aware of any
errors or inaccuracies
in the information contained on the
statement. This statement was
prepared by the provider below:
Third-Party
Disclosure Provider(s)_______ Date____________
Buyer represents that he or she has read and
understands this
document. Pursuant to Civil Code Section
1103.8, the
representations made in this Natural Hazard
Disclosure Statement
do not constitute all of the seller's or real
estate licensee's disclosure
obligations in this transaction.
Signature of Buyer(s)________ Date____________
Signature of Buyer(s)________ Date____________
(b) If an earthquake fault zone, seismic hazard zone, very high
fire hazard severity zone, or wildland fire area map or accompanying
information is not of sufficient accuracy or scale that a reasonable
person can determine if the subject real property is included in a
natural hazard area, the seller or seller's real estate licensee
shall mark "Yes" on the Natural Hazard Disclosure Statement. The
seller or seller's real estate licensee may mark "No" on the Natural
Hazard Disclosure Statement if he or she attaches a report prepared
pursuant to subdivision (c) of Section 1103.4 that verifies the
property is not in the hazard zone. Nothing in this subdivision is
intended to limit or abridge any existing duty of the seller or the
seller's real estate licensees to exercise reasonable care in making
a determination under this subdivision.
(c) If the Federal Emergency Management Agency has issued a Letter
of Map Revision confirming that a property is no longer within a
special flood hazard area, then the seller or seller's real estate
licensee may mark "No" on the Natural Hazard Disclosure Statement,
even if the map has not yet been updated. The seller or seller's real
estate licensee shall attach a copy of the Letter of Map Revision to
the disclosure statement.
(d) If the Federal Emergency Management Agency has issued a Letter
of Map Revision confirming that a property is within a special flood
hazard area and the location of the letter has been posted pursuant
to subdivision (g) of Section 8589.3 of the Government Code, then the
seller or seller's's real estate licensee shall mark "Yes" on the
Natural Hazard Disclosure Statement, even if the map has not yet been
updated. The seller or seller's real estate licensee shall attach a
copy of the Letter of Map Revision to the disclosure statement.
(e) The disclosure required pursuant to this article may be
provided by the seller or seller's real estate licensee in the Local
Option Real Estate Disclosure Statement described in Section 1102.6a,
provided that the Local Option Real Estate Disclosure Statement
includes substantially the same information and substantially the
same warnings that are required by this section.
(f) (1) The legal effect of a consultant's report delivered to
satisfy the exemption provided by Section 1103.4 is not changed when
it is accompanied by a Natural Hazard Disclosure Statement.
(2) A consultant's report shall always be accompanied by a
completed and signed Natural Hazard Disclosure Statement.
(3) In a disclosure statement required by this section, a real
estate licensee and third-party provider may cause his or her name to
be preprinted in lieu of an original signature in the portions of
the form reserved for signatures. The use of a preprinted name shall
not change the legal effect of the acknowledgment.
(g) The disclosure required by this article is only a disclosure
between the seller, the seller's real estate licensees, and the
prospective buyer, and shall not be used by any other party,
including, but not limited to, insurance companies, lenders, or
governmental agencies, for any purpose.
(h) In any transaction in which a seller has accepted, prior to
June 1, 1998, an offer to purchase, the seller, or his or her real
estate licensee, shall be deemed to have complied with the
requirement of subdivision (a) if the seller or real estate licensee
delivers to the prospective buyer a statement that includes
substantially the same information and warning as the Natural Hazard
Disclosure Statement.
(i) This section shall become operative on July 1, 2018.
SEC. 159. Section 1103.3 of the Civil Code is
amended to read:
1103.3. (a) The transferor of any real property subject to this
article shall deliver to the prospective transferee the written
statement required by this article, as follows:
(1) In the case of a sale, as soon as practicable before transfer
of title.
(2) In the case of transfer by a real property sales contract, as
defined in Section 2985, or by a lease together with an option to
purchase, or a ground lease coupled with improvements, as soon as
practicable before execution of the contract. For the purpose of this
subdivision, "execution" means the making or acceptance of an offer.
(b) The transferor shall indicate compliance with this article
either on the receipt for deposit, the real property sales contract,
the lease, any addendum attached thereto, or on a separate document.
(c) If any disclosure, or any material amendment of any
disclosure, required to be made pursuant to this article is delivered
after the execution of an offer to purchase, the transferee shall
have three days after delivery in person or five days after delivery
by deposit in the mail to terminate his or her offer by delivery of a
written notice of termination to the transferor or the transferor's
agent.
(d) This section shall repeal on July 1, 2018.
SEC. 160. Section 1103.3 is added to the Civil
Code, to read:
1103.3. (a) The seller of any real property subject to this
article shall deliver to the prospective buyer the written statement
required by this article, as follows:
(1) In the case of a sale, as soon as practicable before transfer
of title.
(2) In the case of sale by a real property sales contract, as
defined in Section 2985, or by a lease together with an option to
purchase, or a ground lease coupled with improvements, as soon as
practicable before the prospective buyer's execution of the contract.
For the purpose of this subdivision, "execution" means the making or
acceptance of an offer.
(b) The seller shall indicate compliance with this article on the
real property sales contract, the lease, any addendum attached
thereto, or on a separate document.
(c) If any disclosure, or any material amendment of any
disclosure, required to be made pursuant to this article is delivered
after the execution of an offer to purchase, the prospective buyer
shall have three days after delivery in person or five days after
delivery by deposit in the mail to terminate his or her offer by
delivery of a written notice of termination to the seller or the
seller's real estate licensee.
(d) This section shall become operative on July 1, 2018.
SEC. 161. Section 1103.4 of the Civil Code is
amended to read:
1103.4. (a) Neither the transferor nor any listing or selling
agent shall be liable for any error, inaccuracy, or omission of any
information delivered pursuant to this article if the error,
inaccuracy, or omission was not within the personal knowledge of the
transferor or the listing or selling agent, and was based on
information timely provided by public agencies or by other persons
providing information as specified in subdivision (c) that is
required to be disclosed pursuant to this article, and ordinary care
was exercised in obtaining and transmitting the information.
(b) The delivery of any information required to be disclosed by
this article to a prospective transferee by a public agency or other
person providing information required to be disclosed pursuant to
this article shall be deemed to comply with the requirements of this
article and shall relieve the transferor or any listing or selling
agent of any further duty under this article with respect to that
item of information.
(c) The delivery of a report or opinion prepared by a licensed
engineer, land surveyor, geologist, or expert in natural hazard
discovery dealing with matters within the scope of the professional's
license or expertise shall be sufficient compliance for application
of the exemption provided by subdivision (a) if the information is
provided to the prospective transferee pursuant to a request
therefor, whether written or oral. In responding to that request, an
expert may indicate, in writing, an understanding that the
information provided will be used in fulfilling the requirements of
Section 1103.2 and, if so, shall indicate the required disclosures,
or parts thereof, to which the information being furnished is
applicable. Where that statement is furnished, the expert shall not
be responsible for any items of information, or parts thereof, other
than those expressly set forth in the statement.
(1) In responding to the request, the expert shall determine
whether the property is within an airport influence area as defined
in subdivision (b) of Section 11010 of the Business and Professions
Code. If the property is within an airport influence area, the report
shall contain the following statement:
NOTICE OF AIRPORT IN VICINITY
This property is presently located in the
vicinity of an
airport, within what is known as an airport
influence area. For that
reason, the property may be subject to some of
the annoyances or
inconveniences associated with proximity to
airport operations
(for example: noise, vibration, or odors).
Individual sensitivities
to those annoyances can vary from person to
person. You may wish to
consider what airport annoyances, if any, are
associated with the
property before you complete your purchase and
determine whether they
are acceptable to you.
(2) In responding to the request, the expert shall determine
whether the property is within the jurisdiction of the San Francisco
Bay Conservation and Development Commission, as defined in Section
66620 of the Government Code. If the property is within the
commission's jurisdiction, the report shall contain the following
notice:
NOTICE OF SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT COMMISSION
JURISDICTION
This property is located within the jurisdiction of the San
Francisco Bay Conservation and Development Commission. Use and
development of property within the commission's jurisdiction may be
subject to special regulations, restrictions, and permit
requirements. You may wish to investigate and determine whether they
are acceptable to you and your intended use of the property before
you complete your transaction.
(3) In responding to the request, the expert shall determine
whether the property is presently located within one mile of a parcel
of real property designated as "Prime Farmland," "Farmland of
Statewide Importance," "Unique Farmland," "Farmland of Local
Importance," or "Grazing Land" on the most current "Important
Farmland Map" issued by the California Department of Conservation,
Division of Land Resource Protection, utilizing solely the
county-level GIS map data, if any, available on the Farmland Mapping
and Monitoring Program Web site. If the residential property is
within one mile of a designated farmland area, the report shall
contain the following notice:
NOTICE OF RIGHT TO FARM
This property is located within one mile of a farm or ranch land
designated on the current county-level GIS "Important Farmland Map,"
issued by the California Department of Conservation, Division of Land
Resource Protection. Accordingly, the property may be subject to
inconveniences or discomforts resulting from agricultural operations
that are a normal and necessary aspect of living in a community with
a strong rural character and a healthy agricultural sector. Customary
agricultural practices in farm operations may include, but are not
limited to, noise, odors, dust, light, insects, the operation of
pumps and machinery, the storage and disposal of manure, bee
pollination, and the ground or aerial application of fertilizers,
pesticides, and herbicides. These agricultural practices may occur at
any time during the 24-hour day. Individual sensitivities to those
practices can vary from person to person. You may wish to consider
the impacts of such agricultural practices before you complete your
purchase. Please be advised that you may be barred from obtaining
legal remedies against agricultural practices conducted in a manner
consistent with proper and accepted customs and standards pursuant to
Section 3482.5 of the Civil Code or any pertinent local ordinance.
(4) In responding to the request, the expert shall determine,
utilizing map coordinate data made available by the Office of Mine
Reclamation, whether the property is presently located within one
mile of a mine operation for which map coordinate data has been
reported to the director pursuant to Section 2207 of the Public
Resources Code. If the expert determines, from the available map
coordinate data, that the residential property is located within one
mile of a mine operation, the report shall contain the following
notice:
NOTICE OF MINING OPERATIONS:
This property is located within one mile of a mine operation for
which the mine owner or operator has reported mine location data to
the Department of Conservation pursuant to Section 2207 of the Public
Resources Code. Accordingly, the property may be subject to
inconveniences resulting from mining operations. You may wish to
consider the impacts of these practices before you complete your
transaction.
(d) This section shall repeal on July 1, 2018.
SEC. 162. Section 1103.4 is added to the Civil
Code, to read:
1103.4. (a) Neither the seller nor any listing licensee or buyer'
s licensee shall be liable for any error, inaccuracy, or omission of
any information delivered pursuant to this article if the error,
inaccuracy, or omission was not within the personal knowledge of the
seller or the listing licensee or buyer's licensee, and was based on
information timely provided by public agencies or by other persons
providing information as specified in subdivision (c) that is
required to be disclosed pursuant to this article, and ordinary care
was exercised in obtaining and transmitting the information.
(b) The delivery of any information required to be disclosed by
this article to a prospective buyer by a public agency or other
person providing information required to be disclosed pursuant to
this article shall be deemed to comply with the requirements of this
article and shall relieve the seller and buyer's licensee of any
further duty under this article with respect to that item of
information.
(c) The delivery of a report or opinion prepared by a licensed
engineer, land surveyor, geologist, or expert in natural hazard
discovery dealing with matters within the scope of the professional's
license or expertise shall be sufficient compliance for application
of the exemption provided by subdivision (a) if the information is
provided to the prospective buyer pursuant to a request therefor,
whether written or oral.
(1) In responding to the request, the expert shall determine
whether the property is within an airport influence area as defined
in subdivision (b) of Section 11010 of the Business and Professions
Code. If the property is within an airport influence area, the report
shall contain the following statement:
NOTICE OF AIRPORT IN VICINITY
This property is presently located in the
vicinity of an
airport, within what is known as an airport
influence area. For that
reason, the property may be subject to some of
the annoyances or
inconveniences associated with proximity to
airport operations
(for example: noise, vibration, or odors).
Individual sensitivities
to those annoyances can vary from person
to person. You may wish to
consider what airport annoyances, if any, are
associated with the
property before you complete your purchase and
determine whether they
are acceptable to you.
(2) In responding to the request, the expert shall determine
whether the property is within the jurisdiction of the San Francisco
Bay Conservation and Development Commission, as defined in Section
66620 of the Government Code. If the property is within the
commission's jurisdiction, the report shall contain the following
notice:
NOTICE OF SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT COMMISSION
JURISDICTION
This property is located within the jurisdiction of the San
Francisco Bay Conservation and Development Commission. Use and
development of property within the commission's jurisdiction may be
subject to special regulations, restrictions, and permit
requirements. You may wish to investigate and determine whether they
are acceptable to you and your intended use of the property before
you complete your transaction.
(3) In responding to the request, the expert shall determine
whether the property is presently located within one mile of a parcel
of real property designated as "Prime Farmland," "Farmland of
Statewide Importance," "Unique Farmland," "Farmland of Local
Importance," or "Grazing Land" on the most current "Important
Farmland Map" issued by the California Department of Conservation,
Division of Land Resource Protection, utilizing solely the
county-level GIS map data, if any, available on the Farmland Mapping
and Monitoring Program Web site. If the residential property is
within one mile of a designated farmland area, the report shall
contain the following notice:
NOTICE OF RIGHT TO FARM
This property is located within one mile of a farm or ranch land
designated on the current county-level GIS "Important Farmland Map,"
issued by the California Department of Conservation, Division of Land
Resource Protection. Accordingly, the property may be subject to
inconveniences or discomforts resulting from agricultural operations
that are a normal and necessary aspect of living in a community with
a strong rural character and a healthy agricultural sector. Customary
agricultural practices in farm operations may include, but are not
limited to, noise, odors, dust, light, insects, the operation of
pumps and machinery, the storage and disposal of manure, bee
pollination, and the ground or aerial application of fertilizers,
pesticides, and herbicides. These agricultural practices may occur at
any time during the 24-hour day. Individual sensitivities to those
practices can vary from person to person. You may wish to consider
the impacts of such agricultural practices before you complete your
purchase. Please be advised that you may be barred from obtaining
legal remedies against agricultural practices conducted in a manner
consistent with proper and accepted customs and standards pursuant to
Section 3482.5 of the Civil Code or any
pertinent local ordinance.
(4) In responding to the request, the expert shall determine,
utilizing map coordinate data made available by the Office of Mine
Reclamation, whether the property is presently located within one
mile of a mine operation for which map coordinate data has been
reported to the director pursuant to Section 2207 of the Public
Resources Code. If the expert determines, from the available map
coordinate data, that the residential property is located within one
mile of a mine operation, the report shall contain the following
notice:
NOTICE OF MINING OPERATIONS:
This property is located within one mile of a mine operation for
which the mine owner or operator has reported mine location data to
the Department of Conservation pursuant to Section 2207 of the Public
Resources Code. Accordingly, the property may be subject to
inconveniences resulting from mining operations. You may wish to
consider the impacts of these practices before you complete your
transaction.
(d) This section shall become operative on July 1, 2018.
SEC. 163. Section 1103.5 of the Civil Code is
amended to read:
1103.5. (a) After a transferor and his or her agent comply with
Section 1103.2, they shall be relieved of further duty under this
article with respect to those items of information. The transferor
and his or her agent shall not be required to provide notice to the
transferee if the information provided subsequently becomes
inaccurate as a result of any governmental action, map revision,
changed information, or other act or occurrence, unless the
transferor or agent has actual knowledge that the information has
become inaccurate.
(b) If information disclosed in accordance with this article is
subsequently rendered inaccurate as a result of any governmental
action, map revision, changed information, or other act or occurrence
subsequent to the delivery of the required disclosures, the
inaccuracy resulting therefrom does not constitute a violation of
this article.
(c) This section shall repeal on July 1, 2018.
SEC. 164. Section 1103.5 is added to the Civil
Code, to read:
1103.5. (a) After a seller and his or her real estate licensee
comply with Section 1103.2, they shall be relieved of further duty
under this article with respect to those items of information. The
seller and his or her real estate licensee shall not be required to
provide notice to the prospective buyer if the information provided
subsequently becomes inaccurate as a result of any governmental
action, map revision, changed information, or other act or
occurrence, unless the seller or real estate licensee has actual
knowledge that the information has become inaccurate.
(b) If information disclosed in accordance with this article is
subsequently rendered inaccurate as a result of any governmental
action, map revision, changed information, or other act or occurrence
subsequent to the delivery of the required disclosures, the
inaccuracy resulting therefrom does not constitute a violation of
this article.
(c) This section shall become operative on July 1, 2018.
SEC. 165. Section 1103.8 of the Civil Code is
amended to read:
1103.8. (a) The specification of items for disclosure in this
article does not limit or abridge any obligation for disclosure
created by any other provision of law or that may exist in order to
avoid fraud, misrepresentation, or deceit in the transfer
transaction. The Legislature does not intend to affect the existing
obligations of the parties to a real estate contract, or their
agents, to disclose any fact materially affecting the value and
desirability of the property, including, but not limited to, the
physical condition of the property and previously received reports of
physical inspection noted on the disclosure form provided pursuant
to Section 1102.6 or 1102.6a.
(b) Nothing in this article shall be construed to change the duty
of a real estate broker or salesperson pursuant to Section 2079.
(c) This section shall repeal on July 1, 2018.
SEC. 166. Section 1103.8 is added to the Civil
Code, to read:
1103.8. (a) The specification of items for disclosure in this
article does not limit or abridge any obligation for disclosure
created by any other provision of law or that may exist in order to
avoid fraud, misrepresentation, or deceit in the sale transaction.
The Legislature does not intend to affect the existing obligations of
the parties to a real estate contract, or their licensees, to
disclose any fact materially affecting the value and desirability of
the property, including, but not limited to, the physical condition
of the property and previously received reports of physical
inspection noted on the disclosure form provided pursuant to Section
1102.6 or 1102.6a.
(b) Nothing in this article shall be construed to change the duty
of a real estate licensee pursuant to Section 2079.
(c) This section shall become operative on July 1, 2018.
SEC. 167. Section 1103.9 of the Civil Code is
amended to read:
1103.9. (a) Any disclosure made pursuant to this article may be
amended in writing by the transferor or his or her agent, but the
amendment shall be subject to Section 1103.3.
(b) This section shall repeal on July 1, 2018.
SEC. 168. Section 1103.9 is added to the Civil
Code, to read:
1103.9. (a) Any disclosure made pursuant to this article may be
amended in writing by the seller or his or her real estate licensee,
but the amendment shall be subject to Section 1103.3.
(b) This section shall become operative on July 1, 2018.
SEC. 169. Section 1103.12 of the Civil Code is
amended to read:
1103.12. (a) If more than one licensed real estate broker is
acting as an agent in a transaction subject to this article, the
broker who has obtained the offer made by the transferee shall,
except as otherwise provided in this article, deliver the disclosure
required by this article to the transferee, unless the transferor has
given other written instructions for delivery.
(b) If a licensed real estate broker responsible for delivering
the disclosures under this section cannot obtain the disclosure
document required and does not have written assurance from the
transferee that the disclosure has been received, the broker shall
advise the transferee in writing of his or her rights to the
disclosure. A licensed real estate broker responsible for delivering
disclosures under this section shall maintain a record of the action
taken to effect compliance in accordance with Section 10148 of the
Business and Professions Code.
(c) This section shall repeal on July 1, 2018.
SEC. 170. Section 1103.12 is added to the Civil
Code, to read:
1103.12. (a) If more than one real estate broker is acting in a
transaction subject to this article, the buyer's licensee shall,
except as otherwise provided in this article, deliver the disclosure
required by this article to the buyer, unless the seller has given
other written instructions for delivery.
(b) If a licensed real estate broker responsible for delivering
the disclosures under this section cannot obtain the disclosure
document required and does not have written assurance from the buyer
that the disclosure has been received, the broker shall advise the
buyer in writing of his or her rights to the disclosure. A licensed
real estate broker responsible for delivering disclosures under this
section shall maintain a record of the action taken to effect
compliance in accordance with Section 10148 of the Business and
Professions Code.
(c) This section shall become operative on July 1, 2018.
SEC. 171. Section 1103.14 of the Civil Code is
amended to read:
1103.14. (a) As used in this article, "listing agent" means
listing agent as defined in subdivision (f) of Section 1086.
(b) As used in this article, "selling agent" means selling agent
as defined in subdivision (g) of Section 1086, exclusive of the
requirement that the agent be a participant in a multiple listing
service as defined in Section 1087.
(c) This section shall repeal on July 1, 2018.
SEC. 172. Section 2079 of the Civil Code is
amended to read:
2079. (a) It is the duty of a real estate broker or salesperson,
licensed under Division 4 (commencing with Section 10000) of the
Business and Professions Code, to a prospective purchaser of
residential real property comprising one to four dwelling units, or a
manufactured home as defined in Section 18007 of the Health and
Safety Code, to conduct a reasonably competent and diligent visual
inspection of the property offered for sale and to disclose to that
prospective purchaser all facts materially affecting the value or
desirability of the property that an investigation would reveal, if
that broker has a written contract with the seller to find or obtain
a buyer or is a broker who acts in cooperation with that broker to
find and obtain a buyer.
(b) It is the duty of a real estate broker or salesperson licensed
under Division 4 (commencing with Section 10000) of the Business and
Professions Code to comply with this section and any regulations
imposing standards of professional conduct adopted pursuant to
Section 10080 of the Business and Professions Code with reference to
Sections 10176 and 10177 of the Business and Professions Code.
(c) This section shall repeal on July 1, 2018.
SEC. 173. Section 2079 is added to the Civil
Code, to read:
2079. (a) It is the duty of a real estate licensee, licensed
under Division 4 (commencing with Section 10000) of the Business and
Professions Code, to a prospective buyer of residential real property
comprising one to four dwelling units, or a manufactured home as
defined in Section 18007 of the Health and Safety Code, to conduct a
reasonably competent and diligent visual inspection of the property
offered for sale and to disclose to that prospective buyer all facts
materially affecting the value or desirability of the property that
an investigation would reveal, if that broker has a written contract
with the seller to find or obtain a buyer or is a broker who acts in
cooperation with that broker to find and obtain a buyer.
(b) It is the duty of a real estate licensee, licensed under
Division 4 (commencing with Section 10000) of the Business and
Professions Code, to comply with this section and any regulations
imposing standards of professional conduct adopted pursuant to
Section 10080 of the Business and Professions Code with reference to
Sections 10176 and 10177 of the Business and Professions Code.
(c) This section shall become operative on July 1, 2018.
SEC. 174. Section 2079.6 of the Civil Code is
amended to read:
2079.6. (a) This article does not apply to transfers which are
required to be preceded by the furnishing, to a prospective
transferee, of a copy of a public report pursuant to Section 11018.1
or Section 11234 of the Business and Professions Code and transfers
that can be made without a public report pursuant to Section 11010.4
of the Business and Professions Code, unless the property has been
previously occupied.
(b) This section shall repeal on July 1, 2018.
SEC. 175. Section 2079.6 is added to the Civil
Code, to read:
2079.6. (a) This article does not apply to sales which are
required to be preceded by the furnishing, to a prospective buyer, of
a copy of a public report pursuant to Section 11018.1 or Section
11234 of the Business and Professions Code and sales that can be made
without a public report pursuant to Section 11010.4 of the Business
and Professions Code, unless the property has been previously
occupied.
(b) This section shall become operative on July 1, 2018.
SEC. 176. Section 2079.7 of the Civil Code is
amended to read:
2079.7. (a) If a consumer information booklet described in
Section 10084.1 of the Business and Professions Code is delivered to
a transferee in connection with the transfer of real property,
including property specified in Section 1102 of the Civil Code, or
manufactured housing, as defined in Section 18007 of the Health and
Safety Code, a seller or broker is not required to provide additional
information concerning, and the information shall be deemed to be
adequate to inform the transferee regarding, common environmental
hazards, as described in the booklet, that can affect real property.
(b) Notwithstanding subdivision (a), nothing in this section
either increases or decreases the duties, if any, of sellers or
brokers, including, but not limited to, the duties of a seller or
broker under this article, Article 1.5 (commencing with Section 1102)
of Chapter 2 of Title 4 of Part 4 of Division 2, or Section 25359.7
of the Health and Safety Code, or alters the duty of a seller or
broker to disclose the existence of known environmental hazards on or
affecting the real property.
(c) This section shall repeal on July 1, 2018.
SEC. 177. Section 2079.7 is added to the Civil
Code, to read:
2079.7. (a) If a consumer information booklet described in
Section 10084.1 of the Business and Professions Code is delivered to
a buyer in connection with the sale of real property, including
property specified in Section 1102 of the Civil Code, or manufactured
housing, as defined in Section 18007 of the Health and Safety Code,
a seller or broker is not required to provide additional information
concerning, and the information shall be deemed to be adequate to
inform the buyer regarding, common environmental hazards, as
described in the booklet, that can affect real property.
(b) Notwithstanding subdivision (a), nothing in this section
either increases or decreases the duties, if any, of sellers or
brokers, including, but not limited to, the duties of a seller or
broker under this article, Article 1.5 (commencing with Section 1102)
of Chapter 2 of Title 4 of Part 4 of Division 2, or Section 25359.7
of the Health and Safety Code, or alters the duty of a seller or
broker to disclose the existence of known environmental hazards on or
affecting the real property.
(c) This section shall become operative on July 1, 2018.
SEC. 178. Section 2079.8 of the Civil Code is
amended to read:
2079.8. (a) If a Homeowner's Guide to Earthquake Safety described
in Section 10149 of the Business and Professions Code is delivered
to a transferee in connection with the transfer of real property,
including property specified in Section 1102 or under Chapter 7.5
(commencing with Section 2621) of Division 2 of the Public Resources
Code, a seller or broker is not required to provide additional
information concerning, and the information shall be deemed to be
adequate to inform the transferee regarding, geologic and seismic
hazards, in general, as described in the guide, that may affect real
property and mitigating measures that the transferee or seller might
consider.
(b) Notwithstanding subdivision (a), nothing in this section
increases or decreases the duties, if any, of sellers or brokers,
including, but not limited to, the duties of a seller or broker under
this article, Article 1.5 (commencing with Section 1102) of Chapter
2 of Title 4 of Part 4 of Division 2, or under Chapter 7.5
(commencing with Section 2621) of Division 2 of the Public Resources
Code, or alters the duty of a seller or broker to disclose the
existence of known hazards on or affecting the real property.
(c) This section shall repeal on July 1, 2018.
SEC. 179. Section 2079.8 is added to the Civil
Code, to read:
2079.8. (a) If a Homeowner's Guide to Earthquake Safety described
in Section 10149 of the Business and Professions Code is delivered
to a buyer in connection with the sale of real property, including
property specified in Section 1102 or under Chapter 7.5 (commencing
with Section 2621) of Division 2 of the Public Resources Code, a
seller or broker is not required to provide additional information
concerning, and the information shall be deemed to be adequate to
inform the buyer regarding, geologic and seismic hazards, in general,
as described in the guide, that may affect real property and
mitigating measures that the buyer or seller might consider.
(b) Notwithstanding subdivision (a), nothing in this section
increases or decreases the duties, if any, of sellers or brokers,
including, but not limited to, the duties of a seller or broker under
this article, Article 1.5 (commencing with Section 1102) of Chapter
2 of Title 4 of Part 4 of Division 2, or under Chapter 7.5
(commencing with Section 2621) of Division 2 of the Public Resources
Code, or alters the duty of a seller or broker to disclose the
existence of known hazards on or affecting the real property.
(c) This section shall become operative on July 1, 2018.
SEC. 180. Section 2079.9 of the Civil Code is
amended to read:
2079.9. (a) If a Commercial Property Owner's Guide to Earthquake
Safety described in Section 10147 of the Business and Professions
Code is delivered to a transferee in connection with the transfer of
real property, including property specified in Section 1102 or under
Chapter 7.5 (commencing with Section 2621) of Division 2 of the
Public Resources Code, a seller or broker is not required to provide
additional information concerning, and the information shall be
deemed to be adequate to inform the transferee regarding, geologic
and seismic hazards, in general, as described in the guide, that may
affect real property and mitigating measures that the transferee or
seller might consider.
(b) Notwithstanding subdivision (a), nothing in this section
increases or decreases the duties, if any, of sellers, their brokers
or agents under this article or under Chapter 7.5 (commencing with
Section 2621) or Chapter 7.8 (commencing with Section 2690) of
Division 2 of the Public Resources Code, or alters the duty of a
seller, agent, or broker to disclose the existence of known hazards
on or affecting the real property.
(c) This section shall repeal on July 1, 2018.
SEC. 181. Section 2079.9 is added to the Civil
Code, to read:
2079.9. (a) If a Commercial Property Owner's Guide to Earthquake
Safety described in Section 10147 of the Business and Professions
Code is delivered to a buyer in connection with the sale of real
property, including property specified in Section 1102 or under
Chapter 7.5 (commencing with Section 2621) of Division 2 of the
Public Resources Code, a seller or broker is not required to provide
additional information concerning, and the information shall be
deemed to be adequate to inform the buyer regarding, geologic and
seismic hazards, in general, as described in the guide, that may
affect real property and mitigating measures that the buyer or seller
might consider.
(b) Notwithstanding subdivision (a), nothing in this section
increases or decreases the duties, if any, of sellers, their real
estate licensees under this article or under Chapter 7.5 (commencing
with Section 2621) or Chapter 7.8 (commencing with Section 2690) of
Division 2 of the Public Resources Code, or alters the duty of a
seller or real estate licensee to disclose the existence of known
hazards on or affecting the real property.
(c) This section shall become operative on July 1, 2018.
SEC. 182. Section 2079.10 of the Civil Code is
amended to read:
2079.10. (a) If the informational booklet published pursuant to
Section 25402.9 of the Public Resources Code, concerning the
statewide home energy rating program adopted pursuant to Section
25942 of the Public Resources Code, is delivered to a transferee in
connection with the transfer of real property, including, but not
limited to, property specified in Section 1102, manufactured homes as
defined in Section 18007 of the Health and Safety Code, and property
subject to Chapter 7.5 (commencing with Section 2621) of Division 2
of the Public Resources Code, the seller or broker is not required to
provide information additional to that contained in the booklet
concerning home energy ratings, and the information in the booklet
shall be deemed to be adequate to inform the transferee about the
existence of a statewide home energy rating program.
(b) Notwithstanding subdivision (a), nothing in this section
alters any existing duty of the seller or broker under any other law
including, but not limited to, the duties of a seller or broker under
this article, Article 1.5 (commencing with Section 1102) of Chapter
2 of Title 4 of Part 4 of Division 2 of the Civil Code, or Chapter
7.5 (commencing with Section 2621) of Division 2 of the Public
Resources Code, to disclose information concerning the existence of a
home energy rating program affecting the real property.
(c) If the informational booklet or materials described in Section
375.5 of the Water Code concerning water conservation and water
conservation programs are delivered to a transferee in connection
with the transfer of real property, including property described in
subdivision (a), the seller or broker is not required to provide
information concerning water conservation and water conservation
programs that is additional to that contained in the booklet or
materials, and the information in the booklet or materials shall be
deemed to be adequate to inform the transferee about water
conservation and water conservation programs.
(d) This section shall repeal on July 1, 2018.
SEC. 183. Section 2079.10 is added to the Civil
Code, to read:
2079.10. (a) If the informational booklet published pursuant to
Section 25402.9 of the Public Resources Code, concerning the
statewide home energy rating program adopted pursuant to Section
25942 of the Public Resources Code, is delivered to a buyer in
connection with the sale of real property, including, but not limited
to, property specified in Section 1102, manufactured homes as
defined in Section 18007 of the Health and Safety Code, and property
subject to Chapter 7.5 (commencing with Section 2621) of Division 2
of the Public Resources Code, the seller or broker is not required to
provide information additional to that contained in the booklet
concerning home energy ratings, and the information in the booklet
shall be deemed to be adequate to inform the buyer about the
existence of a statewide home energy rating program.
(b) Notwithstanding subdivision (a), nothing in this section
alters any existing duty of the seller or broker under any other law
including, but not limited to, the duties of a seller or broker under
this article, Article 1.5 (commencing with Section 1102) of Chapter
2 of Title 4 of Part 4 of Division 2 of the Civil Code, or Chapter
7.5 (commencing with Section 2621) of Division 2 of the Public
Resources Code, to disclose information concerning the existence of a
home energy rating program affecting the real property.
(c) If the informational booklet or materials described in Section
375.5 of the Water Code concerning water conservation and water
conservation programs are delivered to a buyer in connection with the
sale of real property, including property described in subdivision
(a), the seller or broker is not
required to provide information concerning water
conservation and water conservation programs that is additional to
that contained in the booklet or materials, and the information in
the booklet or materials shall be deemed to be adequate to inform the
buyer about water conservation and water conservation programs.
(d) This section shall become operative on July 1, 2018.
SEC. 184. Section 2079.10.5 of the Civil Code
is amended to read:
2079.10.5. (a) Every contract for the sale of residential real
property entered into on or after July 1, 2013, shall contain, in not
less than 8-point type, a notice as specified below:
NOTICE REGARDING GAS AND HAZARDOUS LIQUID TRANSMISSION PIPELINES
This notice is being provided simply to inform you that
information about the general location of gas and hazardous liquid
transmission pipelines is available to the public via the National
Pipeline Mapping System (NPMS) Internet Web site maintained by the
United States Department of Transportation at
http://www.npms.phmsa.dot.gov/. To seek further information about
possible transmission pipelines near the property, you may contact
your local gas utility or other pipeline operators in the area.
Contact information for pipeline operators is searchable by ZIP Code
and county on the NPMS Internet Web site.
(b) Upon delivery of the notice to the transferee of the real
property, the seller or broker is not required to provide information
in addition to that contained in the notice regarding gas and
hazardous liquid transmission pipelines in subdivision (a). The
information in the notice shall be deemed to be adequate to inform
the transferee about the existence of a statewide database of the
locations of gas and hazardous liquid transmission pipelines and
information from the database regarding those locations.
(c) Nothing in this section shall alter any existing duty under
any other statute or decisional law imposed upon the seller or
broker, including, but not limited to, the duties of a seller or
broker under this article, or the duties of a seller or broker under
Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of
Part 4 of Division 2.
(d) This section shall repeal on July 1, 2018.
SEC. 185. Section 2079.10.5 is added to the
Civil Code, to read:
2079.10.5. (a) Every contract for the sale of residential real
property entered into on or after July 1, 2013, shall contain, in not
less than 8-point type, a notice as specified below:
NOTICE REGARDING GAS AND HAZARDOUS LIQUID TRANSMISSION PIPELINES
This notice is being provided simply to inform you that
information about the general location of gas and hazardous liquid
transmission pipelines is available to the public via the National
Pipeline Mapping System (NPMS) Internet Web site maintained by the
United States Department of Transportation at
http://www.npms.phmsa.dot.gov/. To seek further information about
possible transmission pipelines near the property, you may contact
your local gas utility or other pipeline operators in the area.
Contact information for pipeline operators is searchable by ZIP Code
and county on the NPMS Internet Web site.
(b) Upon delivery of the notice to the buyer of the real property,
the seller or broker is not required to provide information in
addition to that contained in the notice regarding gas and hazardous
liquid transmission pipelines in subdivision (a). The information in
the notice shall be deemed to be adequate to inform the buyer about
the existence of a statewide database of the locations of gas and
hazardous liquid transmission pipelines and information from the
database regarding those locations.
(c) Nothing in this section shall alter any existing duty under
any other statute or decisional law imposed upon the seller or
broker, including, but not limited to, the duties of a seller or
broker under this article, or the duties of a seller or broker under
Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of
Part 4 of Division 2.
(d) This section shall become operative on July 1, 2018.
SEC. 186. Section 2079.10a of the Civil Code is
amended to read:
2079.10a. (a) Every lease or rental agreement for residential
real property entered into on or after July 1, 1999, and every
contract for the sale of residential real property comprised of one
to four dwelling units entered into on or after that date, shall
contain, in not less than 8-point type, a notice as specified in
paragraph (1), (2), or (3).
(1) A contract entered into by the parties on or after July 1,
1999, and before September 1, 2005, shall contain the following
notice:
Notice: The California Department of Justice, sheriff's
departments, police departments serving jurisdictions of 200,000 or
more, and many other local law enforcement authorities maintain for
public access a database of the locations of persons required to
register pursuant to paragraph (1) of subdivision (a) of Section
290.4 of the Penal Code. The database is updated on a quarterly basis
and is a source of information about the presence of these
individuals in any neighborhood. The Department of Justice also
maintains a Sex Offender Identification Line through which inquiries
about individuals may be made. This is a "900" telephone service.
Callers must have specific information about individuals they are
checking. Information regarding neighborhoods is not available
through the "900" telephone service.
(2) A contract entered into by the parties on or after September
1, 2005, and before April 1, 2006, shall contain either the notice
specified in paragraph (1) or the notice specified in paragraph (3).
(3) A contract entered into by the parties on or after April 1,
2006, shall contain the following notice:
Notice: Pursuant to Section 290.46 of the Penal Code, information
about specified registered sex offenders is made available to the
public via an Internet Web site maintained by the Department of
Justice at www.meganslaw.ca.gov. Depending on an offender's criminal
history, this information will include either the address at which
the offender resides or the community of residence and ZIP Code in
which he or she resides.
(b) Subject to subdivision (c), upon delivery of the notice to the
lessee or transferee of the real property, the lessor, seller, or
broker is not required to provide information in addition to that
contained in the notice regarding the proximity of registered sex
offenders. The information in the notice shall be deemed to be
adequate to inform the lessee or transferee about the existence of a
statewide database of the locations of registered sex offenders and
information from the database regarding those locations. The
information in the notice shall not give rise to any cause of action
against the disclosing party by a registered sex offender.
(c) Notwithstanding subdivisions (a) and (b), nothing in this
section shall alter any existing duty of the lessor, seller, or
broker under any other statute or decisional law including, but not
limited to, the duties of a lessor, seller, or broker under this
article, or the duties of a seller or broker under Article 1.5
(commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of
Division 2.
(d) This section shall repeal on July 1, 2018.
SEC. 187. Section 2079.10a is added to the
Civil Code, to read:
2079.10a. (a) Every lease or rental agreement for residential
real property entered into on or after July 1, 1999, and every
contract for the sale of residential real property comprised of one
to four dwelling units entered into on or after that date, shall
contain, in not less than 8-point type, a notice as specified in
paragraph (1), (2), or (3).
(1) A contract entered into by the parties on or after July 1,
1999, and before September 1, 2005, shall contain the following
notice:
Notice: The California Department of Justice, sheriff's
departments, police departments serving jurisdictions of 200,000 or
more, and many other local law enforcement authorities maintain for
public access a database of the locations of persons required to
register pursuant to paragraph (1) of subdivision (a) of Section
290.4 of the Penal Code. The database is updated on a quarterly basis
and is a source of information about the presence of these
individuals in any neighborhood. The Department of Justice also
maintains a Sex Offender Identification Line through which inquiries
about individuals may be made. This is a "900" telephone service.
Callers shall have specific information about individuals they are
checking. Information regarding neighborhoods is not available
through the "900" telephone service.
(2) A contract entered into by the parties on or after September
1, 2005, and before April 1, 2006, shall contain either the notice
specified in paragraph (1) or the notice specified in paragraph (3).
(3) A contract entered into by the parties on or after April 1,
2006, shall contain the following notice:
Notice: Pursuant to Section 290.46 of the Penal Code, information
about specified registered sex offenders is made available to the
public via an Internet Web site maintained by the Department of
Justice at www.meganslaw.ca.gov. Depending on an offender's criminal
history, this information will include either the address at which
the offender resides or the community of residence and ZIP Code in
which he or she resides.
(b) Subject to subdivision (c), upon delivery of the notice to the
lessee or buyer of the real property, the lessor, seller, or broker
is not required to provide information in addition to that contained
in the notice regarding the proximity of registered sex offenders.
The information in the notice shall be deemed to be adequate to
inform the lessee or buyer about the existence of a statewide
database of the locations of registered sex offenders and information
from the database regarding those locations. The information in the
notice shall not give rise to any cause of action against the
disclosing party by a registered sex offender.
(c) Notwithstanding subdivisions (a) and (b), nothing in this
section shall alter any existing duty of the lessor, seller, or
broker under any other statute or decisional law including, but not
limited to, the duties of a lessor, seller, or broker under this
article, or the duties of a seller or broker under Article 1.5
(commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of
Division 2.
(d) This section shall become operative on July 1, 2018.
SEC. 188. Section 2079.13 of the Civil Code is
amended to read:
2079.13. As used in Sections 2079.14 to 2079.24, inclusive, the
following terms have the following meanings:
(a) "Agent" means a person acting under provisions of Title 9
(commencing with Section 2295) in a real property transaction, and
includes a person who is licensed as a real estate broker under
Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of
the Business and Professions Code, and under whose license a listing
is executed or an offer to purchase is obtained.
(b) "Associate licensee" means a person who is licensed as a real
estate broker or salesperson under Chapter 3 (commencing with Section
10130) of Part 1 of Division 4 of the Business and Professions Code
and who is either licensed under a broker or has entered into a
written contract with a broker to act as the broker's agent in
connection with acts requiring a real estate license and to function
under the broker's supervision in the capacity of an associate
licensee.
The agent in the real property transaction bears responsibility
for his or her associate licensees who perform as agents of the
agent. When an associate licensee owes a duty to any principal, or to
any buyer or seller who is not a principal, in a real property
transaction, that duty is equivalent to the duty owed to that party
by the broker for whom the associate licensee functions.
(c) "Buyer" means a transferee in a real property transaction, and
includes a person who executes an offer to purchase real property
from a seller through an agent, or who seeks the services of an agent
in more than a casual, transitory, or preliminary manner, with the
object of entering into a real property transaction. "Buyer" includes
vendee or lessee.
(d) "Commercial real property" means all real property in the
state, except single-family residential real property, dwelling units
made subject to Chapter 2 (commencing with Section 1940) of Title 5,
mobilehomes, as defined in Section 798.3, or recreational vehicles,
as defined in Section 799.29.
(e) "Dual agent" means an agent acting, either directly or through
an associate licensee, as agent for both the seller and the buyer in
a real property transaction.
(f) "Listing agreement" means a contract between an owner of real
property and an agent, by which the agent has been authorized to sell
the real property or to find or obtain a buyer.
(g) "Listing agent" means a person who has obtained a listing of
real property to act as an agent for compensation.
(h) "Listing price" is the amount expressed in dollars specified
in the listing for which the seller is willing to sell the real
property through the listing agent.
(i) "Offering price" is the amount expressed in dollars specified
in an offer to purchase for which the buyer is willing to buy the
real property.
(j) "Offer to purchase" means a written contract executed by a
buyer acting through a selling agent that becomes the contract for
the sale of the real property upon acceptance by the seller.
(k) "Real property" means any estate specified by subdivision (1)
or (2) of Section 761 in property that constitutes or is improved
with one to four dwelling units, any commercial real property, any
leasehold in these types of property exceeding one year's duration,
and mobilehomes, when offered for sale or sold through an agent
pursuant to the authority contained in Section 10131.6 of the
Business and Professions Code.
(l) "Real property transaction" means a transaction for the sale
of real property in which an agent is employed by one or more of the
principals to act in that transaction, and includes a listing or an
offer to purchase.
(m) "Sell," "sale," or "sold" refers to a transaction for the
transfer of real property from the seller to the buyer, and includes
exchanges of real property between the seller and buyer, transactions
for the creation of a real property sales contract within the
meaning of Section 2985, and transactions for the creation of a
leasehold exceeding one year's duration.
(n) "Seller" means the transferor in a real property transaction,
and includes an owner who lists real property with an agent, whether
or not a transfer results, or who receives an offer to purchase real
property of which he or she is the owner from an agent on behalf of
another. "Seller" includes both a vendor and a lessor.
(o) "Selling agent" means a listing agent who acts alone, or an
agent who acts in cooperation with a listing agent, and who sells or
finds and obtains a buyer for the real property, or an agent who
locates property for a buyer or who finds a buyer for a property for
which no listing exists and presents an offer to purchase to the
seller.
(p) "Subagent" means a person to whom an agent delegates agency
powers as provided in Article 5 (commencing with Section 2349) of
Chapter 1 of Title 9. However, "subagent" does not include an
associate licensee who is acting under the supervision of an agent in
a real property transaction.
This section shall repeal on July 1, 2018.
SEC. 189. Section 2079.13 is added to the Civil
Code, to read:
2079.13. (a) For the purposes of this article, the definitions in
Chapter 1 (commencing with Section 10000) of Part 1 of Division 4 of
the Business and Professions Code shall apply.
(b) Notwithstanding subdivision (a), for the purposes of Sections
2079 through 2079.6, inclusive, and Sections 2079.9 through 2079.12,
inclusive, owners and managers of multi-family residential properties
improved by more than four residential units are not "sellers" and a
lease of such property does not constitute a "sale."
(c) This section shall become operative on July 1, 2018.
SEC. 190. Section 2079.14 of the Civil Code is
amended to read:
2079.14. Listing agents and selling agents shall provide the
seller and buyer in a real property transaction with a copy of the
disclosure form specified in Section 2079.16, and, except as provided
in subdivision (c), shall obtain a signed acknowledgment of receipt
from that seller or buyer, except as provided in this section or
Section 2079.15, as follows:
(a) The listing agent, if any, shall provide the disclosure form
to the seller prior to entering into the listing agreement.
(b) The selling agent shall provide the disclosure form to the
seller as soon as practicable prior to presenting the seller with an
offer to purchase, unless the selling agent previously provided the
seller with a copy of the disclosure form pursuant to subdivision
(a).
(c) Where the selling agent does not deal on a face-to-face basis
with the seller, the disclosure form prepared by the selling agent
may be furnished to the seller (and acknowledgment of receipt
obtained for the selling agent from the seller) by the listing agent,
or the selling agent may deliver the disclosure form by certified
mail addressed to the seller at his or her last known address, in
which case no signed acknowledgment of receipt is required.
(d) The selling agent shall provide the disclosure form to the
buyer as soon as practicable prior to execution of the buyer's offer
to purchase, except that if the offer to purchase is not prepared by
the selling agent, the selling agent shall present the disclosure
form to the buyer not later than the next business day after the
selling agent receives the offer to purchase from the buyer.
(e) This section shall repeal on July 1, 2018.
SEC. 191. Section 2079.14 is added to the Civil
Code, to read:
2079.14. A real estate broker shall provide the seller and buyer
in a real property transaction with a copy of the disclosure form
specified in Section 2079.16, and, except as provided in subdivision
(c), shall obtain a signed acknowledgment of receipt from that seller
or buyer, except as provided in this section or Section 2079.15, as
follows:
(a) The seller's broker, if any, shall provide the disclosure form
to the seller prior to entering into the listing agreement.
(b) The buyer's broker shall provide the disclosure form to the
buyer as soon as practicable prior to execution of the buyer's offer
to purchase, except that if the offer to purchase is not prepared by
the buyer's broker, the buyer's broker shall present the disclosure
form to the buyer not later than the next business day after the
buyer's broker receives the offer to purchase from the buyer.
(c) This section shall become operative on July 1, 2018.
SEC. 192. Section 2079.15 of the Civil Code is
amended to read:
2079.15. (a) In any circumstance in which the seller or buyer
refuses to sign an acknowledgment of receipt pursuant to Section
2079.14, the agent, or an associate licensee acting for an agent,
shall set forth, sign, and date a written declaration of the facts of
the refusal.
(b) This section shall repeal on July 1, 2018.
SEC. 193. Section 2079.15 is added to the Civil
Code, to read:
2079.15. (a) In any circumstance in which the seller or buyer
refuses to sign an acknowledgment of receipt pursuant to Section
2079.14, the real estate broker, or an associate licensee acting for
a real estate broker, shall set forth, sign, and date a written
declaration of the facts of the refusal.
(b) This section shall become operative on July 1, 2018.
SEC. 194. Section 2079.16 of the Civil Code is
amended to read:
2079.16. The disclosure form required by Section 2079.14 shall
have Sections 2079.13 to 2079.24, inclusive, excluding this section,
printed on the back, and on the front of the disclosure form the
following shall appear:
DISCLOSURE REGARDING
REAL ESTATE AGENCY RELATIONSHIP
(As required by the Civil Code)
When you enter into a discussion with a real estate agent
regarding a real estate transaction, you should from the outset
understand what type of agency relationship or representation you
wish to have with the agent in the transaction.
SELLER'S AGENT
A Seller's agent under a listing agreement with the Seller acts as
the agent for the Seller only. A Seller's agent or a subagent of
that agent has the following affirmative obligations:
To the Seller:
A fiduciary duty of utmost care, integrity, honesty, and loyalty
in dealings with the Seller.
To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance
of the agent's duties.
(b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the
parties.
An agent is not obligated to reveal to either party any
confidential information obtained from the other party that does not
involve the affirmative duties set forth above.
BUYER'S AGENT
A selling agent can, with a Buyer's consent, agree to act as agent
for the Buyer only. In these situations, the agent is not the Seller'
s agent, even if by agreement the agent may receive compensation for
services rendered, either in full or in part from the Seller. An
agent acting only for a Buyer has the following affirmative
obligations:
To the Buyer:
A fiduciary duty of utmost care, integrity, honesty, and loyalty
in dealings with the Buyer.
To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance
of the agent's duties.
(b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the
parties. An agent is not obligated to reveal to either party any
confidential information obtained from the other party that does not
involve the affirmative duties set forth above.
AGENT REPRESENTING BOTH SELLER AND BUYER
A real estate agent, either acting directly or through one or more
associate licensees, can legally be the agent of both the Seller and
the Buyer in a transaction, but only with the knowledge and consent
of both the Seller and the Buyer.
In a dual agency situation, the agent has the following
affirmative obligations to both the Seller and the Buyer:
(a) A fiduciary duty of utmost care, integrity, honesty, and
loyalty in the dealings with either the Seller or the Buyer.
(b) Other duties
to the Seller and the Buyer as stated above in their respective
sections.
In representing both Seller and Buyer, the agent may not, without
the express permission of the respective party, disclose to the other
party that the Seller will accept a price less than the listing
price or that the Buyer will pay a price greater than the price
offered.
The above duties of the agent in a real estate transaction do not
relieve a Seller or Buyer from the responsibility to protect his or
her own interests. You should carefully read all agreements to assure
that they adequately express your understanding of the transaction.
A real estate agent is a person qualified to advise about real
estate. If legal or tax advice is desired, consult a competent
professional.
Throughout your real property transaction you may receive more
than one disclosure form, depending upon the number of agents
assisting in the transaction. The law requires each agent with whom
you have more than a casual relationship to present you with this
disclosure form. You should read its contents each time it is
presented to you, considering the relationship between you and the
real estate agent in your specific transaction.
This disclosure form includes the provisions of Sections 2079.13
to 2079.24, inclusive, of the Civil Code set forth on the reverse
hereof. Read it carefully.
____________________________ ____________________
Agent (date) Buyer/Seller (date)
(Signature) (Signature)
____________________________ ____________________
Associate Licensee (date) Buyer/Seller (date)
(Signature) (Signature)
This section shall repeal on July 1, 2018.
SEC. 195. Section 2079.16 is added to the Civil
Code, to read:
2079.16. The disclosure form required by Section 2079.14 shall
contain at a minimum the following:
DISCLOSURE REGARDING
REAL ESTATE RELATIONSHIPS WITH LICENSEES
(As required by Section 2079.14 of the Civil Code)
When you enter into a relationship with a real estate broker
regarding a real estate transaction, you should from the outset
understand what type of representation you wish to have with the
broker in the transaction.
SELLER'S BROKER
A Seller's broker under a listing agreement with the Seller acts
as the broker for the Seller only. A Seller's broker has the
following affirmative obligations:
To the Seller:
A fiduciary duty of care, integrity, honesty, and loyalty in
dealings with the Seller.
To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance
of the broker's duties.
(b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the broker materially
affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the
parties.
(d) A Seller's broker may have other listing agreements with other
Sellers.
A broker is not obligated to reveal to either party any
confidential information obtained from the other party or from other
clients that does not involve the affirmative duties set forth above.
Confidential information includes, but is not limited to, facts
relating to the party's financial position, motivations, bargaining
position, or other personal information that may impact price or
price-related issues.
BUYER'S BROKER
A broker can, with the Buyer's agreement, agree to act as broker
for the Buyer only. The Buyer's broker may receive compensation for
services rendered, either in full or in part from the Seller, but
that does not make the Buyer's broker the Seller's broker. A broker
acting for a Buyer has the following affirmative obligations:
To the Buyer:
A fiduciary duty of care, integrity, honesty, and loyalty in
dealings with the Buyer.
To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance
of the broker's duties.
(b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the real estate broker
materially affecting the value or desirability of the property that
are not known to, or within the diligent attention and observation
of, the parties. A real estate broker is not obligated to reveal to
either party any confidential information obtained from the other
party or from other clients that does not involve the affirmative
duties set forth above. Confidential information includes, but is not
limited to, facts relating to the party's financial position,
motivations, bargaining position, or other personal information that
may impact price or price-related issues.
(d) The Buyer's broker may also be providing services to other
buyers in regard to the same or different properties.
BROKER REPRESENTING BOTH SELLER AND BUYER
A real estate broker, either acting directly or through one or
more associate licensees, can legally represent both the Seller and
the Buyer in a transaction, but only with the knowledge and consent
of both the Seller and the Buyer.
In a dual brokerage or dual licensee situation, the broker and
dual licensees have the following affirmative obligations to both the
Seller and the Buyer:
(a) A fiduciary duty of care, integrity, honesty, and loyalty in
the dealings with either the Seller or the Buyer.
(b) Other duties to the Seller and the Buyer as stated above in
their respective sections.
In representing both Seller and Buyer, the broker or dual licensee
may not, without the express permission of the respective party,
disclose to the other party in that transaction any confidential
information obtained from the other party that does not involve the
affirmative duties set forth above. Confidential information
includes, but is not limited to, facts relating to the party's
financial position, motivations, bargaining position, or other
personal information that may impact price or price-related issues. A
broker is not obligated to reveal to either party any information
obtained from clients or reports regarding the property in a previous
transaction regarding the same property without the client's
consent.
CONSUMER RESPONSIBILITIES
The above duties of the broker in a real estate transaction do not
relieve a Seller or Buyer from the responsibility to protect his or
her own interests, including reading all documents, reports, and
disclosures. The Buyer has a duty to exercise reasonable care to
protect himself or herself, including obtaining and considering those
facts which are known to or within the diligent attention and
observation of the Buyer. You should carefully read all agreements to
assure that they adequately express your understanding of the
transaction. A real estate broker is a person qualified to advise
about real estate. If legal or tax advice is desired, consult a
competent professional.
Since you will likely not know who the Buyer is going to be, if
you are the Seller, or which property you are going to buy, if you
are the Buyer, consider the confirmation of relationships carefully
in the context of each offer as it may change as the property in the
transaction is identified and the respective parties and their
brokers become clear.
This disclosure form includes the provisions of Sections 2079.13
to 2079.24, inclusive, of the Civil Code set forth on the reverse
hereof. Read it carefully.
____________________________ ____________________
Real Estate Broker (date) Buyer/Seller (date)
(Signature) (Signature)
____________________________ ____________________
Associate Licensee (date) Buyer/Seller (date)
(Signature) (Signature)
This section shall become operative on July 1, 2018.
SEC. 196. Section 2079.17 of the Civil Code is
amended to read:
2079.17. (a) As soon as practicable, the selling agent shall
disclose to the buyer and seller whether the selling agent is acting
in the real property transaction exclusively as the buyer's agent,
exclusively as the seller's agent, or as a dual agent representing
both the buyer and the seller. This relationship shall be confirmed
in the contract to purchase and sell real property or in a separate
writing executed or acknowledged by the seller, the buyer, and the
selling agent prior to or coincident with execution of that contract
by the buyer and the seller, respectively.
(b) As soon as practicable, the listing agent shall disclose to
the seller whether the listing agent is acting in the real property
transaction exclusively as the seller's agent, or as a dual agent
representing both the buyer and seller. This relationship shall be
confirmed in the contract to purchase and sell real property or in a
separate writing executed or acknowledged by the seller and the
listing agent prior to or coincident with the execution of that
contract by the seller.
(c) The confirmation required by subdivisions (a) and (b) shall be
in the following form:
___________________________ is the agent of
(Name of Listing Agent)
(check one):
( ) the seller exclusively; or
( ) both the buyer and seller.
_______________________________________________
(Name of Selling Agent if not the same as the
_______________
Listing Agent)
is the agent of (check one):
( ) the buyer exclusively; or
( ) the seller exclusively; or
( ) both the buyer and seller.
(d) The disclosures and confirmation required by this section
shall be in addition to the disclosure required by Section 2079.14.
(e) This section shall repeal on July 1, 2018.
SEC. 197. Section 2079.17 is added to the Civil
Code, to read:
2079.17. (a) As soon as practicable, the buyer's broker shall
disclose to the buyer and seller whether the broker is acting in the
real property transaction as the buyer's broker or as a dual broker
representing both the buyer and the seller. This relationship shall
be confirmed in the contract to purchase and sell real property or in
a separate writing executed or acknowledged by the seller, the
buyer, and the buyer's broker either directly or through an associate
licensee prior to or coincident with execution of that contract by
the buyer and the seller, respectively.
(b) As soon as practicable, the seller's broker shall disclose to
the seller whether the seller's licensee is acting in the real
property transaction as the seller's broker or as a dual broker
representing both the buyer and seller. This relationship shall be
confirmed in the contract to purchase and sell real property or in a
separate writing executed or acknowledged by the seller and the
seller's broker either directly or through an associate licensee
prior to or coincident with the execution of that contract by the
seller.
(c) The confirmation required by subdivisions (a) and (b) shall be
in the following form:
____________________________________________
(Name of Seller's Broker, Brokerage firm,
____________________is
and license number)
the broker of (check one):
( ) the seller; or
( ) both the buyer and seller. (dual broker)
_________________________________________
(Name of Seller's Licensee and license
________ is (check one):
number)
( ) is the Seller's Licensee. (salesperson or
associate broker)
( ) is both the Buyer's and Seller's Licensee.
(dual licensee)
______________________________________________
(Name of Buyer's Broker, Brokerage firm, and
________________is
license number)
the broker of (check one):
( ) the buyer; or
( ) both the buyer and seller. (dual broker)
________________________________________
(Name of Buyer's Licensee and license
________ is
number)
( ) the Buyer's Licensee. (salesperson or
associate broker)
( ) both the Buyer's and Seller's Licensee.
(dual licensee)
(d) The disclosures and confirmation required by this section
shall be in addition to the disclosure required by Section 2079.14. A
real estate salesperson or associate broker affiliated with a broker
providing the required disclosures and confirmation on behalf of
that broker shall satisfy the broker's duties of disclosure and
confirmation.
(e) This section shall become operative on July 1, 2018.
SEC. 198. Section 2079.18 of the Civil Code is
amended to read:
2079.18. (a) No selling agent in a real property transaction may
act as an agent for the buyer only, when the selling agent is also
acting as the listing agent in the transaction.
(b) This section shall repeal on July 1, 2018.
SEC. 199. Section 2079.19 of the Civil Code is
amended to read:
2079.19. (a) The payment of compensation or the obligation to pay
compensation to an agent by the seller or buyer is not necessarily
determinative of a particular agency relationship between an agent
and the seller or buyer. A listing agent and a selling agent may
agree to share any compensation or commission paid, or any right to
any compensation or commission for which an obligation arises as the
result of a real estate transaction, and the terms of any such
agreement shall not necessarily be determinative of a particular
relationship.
(b) This section shall repeal on July 1, 2018.
SEC. 200. Section 2079.19 is added to the Civil
Code, to read:
2079.19. (a) The payment of compensation or the obligation to pay
compensation to a real estate broker by the seller or buyer is not
necessarily determinative of a particular agency relationship between
a real estate broker and the seller or buyer. The parties may agree
to an agency relationship established and governed by a written
agreement between the parties or an agreement for services for
licensed activity without an agency relationship. A seller's broker
and a buyer's broker may agree to share any compensation or
commission paid, or any right to any compensation or commission for
which an obligation arises as the result of a real estate
transaction, and the terms of any such agreement shall not
necessarily be determinative of a particular relationship.
(b) This section shall become operative on July 1, 2018.
SEC. 201. Section 2079.20 of the Civil Code is
amended to read:
2079.20. (a) Nothing in this article prevents an agent from
selecting, as a condition of the agent's employment, a specific form
of agency relationship not specifically prohibited by this article if
the requirements of Section 2079.14 and Section 2079.17 are complied
with.
(b) This section shall repeal on July 1, 2018.
SEC. 202. Section 2079.21 of the Civil Code is
amended to read:
2079.21. A dual agent shall not disclose to the buyer that the
seller is willing to sell the property at a price less than the
listing price, without the express written consent of the seller. A
dual agent shall not disclose to the seller that the buyer is willing
to pay a price greater than the offering price, without the express
written consent of the buyer.
This section does not alter in any way the duty or responsibility
of a dual agent to any principal with respect to confidential
information other than price.
This section shall repeal on July 1, 2018.
SEC. 203. Section 2079.21 is added to the Civil
Code, to read:
2079.21. (a) A dual licensee may not, without the express
permission of a client, disclose to the other client any confidential
information obtained from the other client that does not involve the
affirmative duties described in Section 2079.16. Confidential
information includes, but is not limited to, facts relating to the
client's financial position, motivations, bargaining position, or
other personal information that may impact price or price-related
issues.
(b) This section shall become operative on July 1, 2018.
SEC. 204. Section 2079.22 of the Civil Code is
amended to read:
2079.22. (a) Nothing in this article precludes a listing agent
from also being a selling agent, and the combination of these
functions in one agent does not, of itself, make that agent a dual
agent.
(b) This section shall repeal on July 1, 2018.
SEC. 205. Section 2079.22 is added to the Civil
Code, to read:
2079.22. (a) Nothing in this article precludes a seller's broker,
including through one or more associate licensees, from also being a
buyer's broker. If one party to the transaction chooses to not be
represented by a broker, that does not, of itself, make that broker a
dual licensee without the written consent set forth in Section
2079.18. An agency relationship between a client and a broker or
associate licensee shall have the express written consent of all
parties.
(b) This section shall become operative on July 1, 2018.
SEC. 206. Section 2079.23 of the Civil Code is
amended to read:
2079.23. (a) A contract between the principal and agent may be
modified or altered to change the agency relationship at any time
before the performance of the act which is the object of the agency
with the written consent of the parties to the agency relationship.
(b) A lender or an auction company retained by a lender to control
aspects of a transaction of real property subject to this part,
including validating the sales price, shall not require, as a
condition of receiving the lender's approval of the transaction, the
homeowner or listing agent to defend or indemnify the lender or
auction company from any liability alleged to result from the actions
of the lender or auction company. Any clause, provision, covenant,
or agreement purporting to impose an obligation to defend or
indemnify a lender or an auction company in violation of this
subdivision is against public policy, void, and unenforceable.
(c) This section shall repeal on July 1, 2018.
SEC. 207. Section 2079.23 is added to the Civil
Code, to read:
2079.23. (a) A contract between the principal and the real estate
broker may be modified or altered to change the relationship at any
time before the performance of the act which is the object of the
license services with the written consent of the parties to the
relationship.
(b) A lender or an auction company retained by a lender to control
aspects of a transaction of real property subject to this part,
including validating the sales price, shall not require, as a
condition of receiving the lender's approval of the transaction, the
homeowner or any licensee to defend or indemnify the lender or
auction company from any liability alleged to result from the actions
of the lender or auction company. Any clause, provision, covenant,
or agreement purporting to impose an obligation to defend or
indemnify a lender or an auction company in violation of this
subdivision is against public policy, void, and unenforceable.
(c) This section shall become operative on July 1, 2018.
SEC. 208. Section 2079.24 of the Civil Code is
amended to read:
2079.24. (a) Nothing in this article shall be construed to either
diminish the duty of disclosure owed buyers and sellers by agents
and their associate licensees, subagents, and employees or to relieve
agents and their associate licensees, subagents, and employees from
liability for their conduct in connection with acts governed by this
article or for any breach of a fiduciary duty or a duty of
disclosure.
(b) This section shall repeal on July 1, 2018.
SEC. 209. Section 2079.24 is added to the Civil
Code, to read:
2079.24. (a) Nothing in this article shall be construed to either
diminish the duty of disclosure owed to buyers and sellers by
brokers, including their broker associates, salespersons, and
employees, or to relieve brokers, including their broker associates,
salespersons, and employees from liability for their conduct in
connection with acts governed by this article.
(b) This section shall become operative on July 1, 2018.
SEC. 210. SEC. 33. Section 31210 of
the Corporations Code is amended to read:
31210. (a) It is unlawful
for any person to effect or attempt to effect a sale of a franchise
in this state, except in transactions exempted under Chapter 1
(commencing with Section 31100) of Part 2 of this division, unless
such person is: (1) identified in an application or amended
application filed with the commissioner pursuant to Part 2
(commencing with Section 31100) of this division, (2) licensed by the
Bureau of Real Estate as a real estate broker or real estate
salesman, salesperson, or (3) licensed
by the commissioner as a broker-dealer or agent pursuant to the
Corporate Securities Law of 1968.
(b) This section shall repeal on July 1, 2018.
SEC. 211. Section 31210 is added to the
Corporations Code, to read:
31210. (a) It is unlawful for any person to effect or attempt to
effect a sale of a franchise in this state, except in transactions
exempted under Chapter 1 (commencing with Section 31100) of Part 2 of
this division, unless such person is: (1) identified in an
application or amended application filed with the commissioner
pursuant to Part 2 (commencing with Section 31100) of this division,
(2) licensed by the Bureau of Real Estate as a real estate broker or
real estate salesperson, or (3) licensed by the commissioner as a
broker-dealer or agent pursuant to the Corporate Securities Law of
1968.
(b) This section shall become operative on July 1, 2018.
SEC. 212. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.