BILL ANALYSIS Ó
AB 1807
Page 1
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
AB 1807
(Bonta) - As Amended April 4, 2016
SUBJECT: Real estate licensees.
SUMMARY: Allows a licensee of the Bureau of Real Estate (BRE)
to petition the Real Estate Commissioner (Commissioner) to
remove his or her notice of disciplinary action from the BRE's
Internet Web site because the information is no longer necessary
to prevent a credible risk to the public.
EXISTING LAW:
1)Establishes within the Department of Consumer Affairs (DCA) a
Bureau of Real Estate (BRE), the chief officer of which is
named the Real Estate Commissioner (Commissioner); the BRE is
mandated protect the public by exercising its licensing,
regulatory, and disciplinary functions; whenever the
protection of the public is inconsistent with other interests
sought to be promoted, the protection of the public shall be
paramount. (Business and Professions Code (BPC) Section 10000,
et seq.)
2)Provides that the Commissioner enforce the provisions of the
Real Estate Law; has full power to regulate and control the
issuance and temporary or permanent revocation of all licenses
to be issued; and, perform all other acts and duties necessary
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for their enforcement. (BPC Section 10071)
3)Provides that the commissioner may adopt, amend, or repeal
rules and regulations that are reasonably necessary for the
enforcement. (BPC Section 10080)
4)Requires the Commissioner to provide on the Internet
information regarding the status of every license issued,
including information on suspensions and revocations of
licenses, accusations filed pursuant to the Administrative
Procedure Act relative to persons or businesses subject to
licensure or regulation; provides that the information not
include personal information, except for the licensee's
address of record. (BPC Section 10083.2)
5)Specifies actions by a licensee for which the Commissioner or
a designee may issue a citation and fine, including when a
person who does not possess a real estate license, prepaid
rental listing service license, or a real estate broker
license is engaged or has engaged in activities for which the
respective license is required; or when a licensee is
violating or has violated provisions, as specified. (BPC
Section 10080.9)
6)Promulgates regulations for citations and fines associated
with a violation or violations of the Real Estate Law;
requires the citation to be provided in writing with
particularities and nature of the violation; provides that the
citation may be made by certified mail at the address of
record of a licensee cited, or to the last known mailing,
business, or residence address of an unlicensed person or
entity cited; requires time be allowed to comply with an order
of correction that is specified in the citation; provides that
the person receiving the citation may request an extension of
the time to comply with the order if the cited person or
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entity is unable to complete the correction or pay the fine
within the time specified. (Title 10 California Code of
Regulations Sections 2907.1-2907.4)
THIS BILL:
1)Declares that it is appropriate for the BRE to continue
reporting on its license verification Internet Web page, which
is hosted on the BRE Web site when discipline has been imposed
upon a licensee for conduct that indicates a credible risk of
harm to the public; and that the BRE may consider and grant on
a case-by-case basis a licensee's petition to discontinue the
reporting of past disciplinary actions he or she can provide
evidence that continued reporting is no longer required reduce
risk to the public.
2)Declares that the BRE may require a petitioner to pay in
advance of consideration a fee to defray costs associated with
consideration of the petition.
3)Declares that the BRE is not authorized or required to destroy
public records maintained pursuant to the California Public
Records Act.
4)Declares that the Legislature intends to establish a process
by which a licensee may petition the BRE to remove a notice of
past discipline from the license verification Internet Web
site of the bureau.
5)Provides that a licensee may petition the Commissioner to
remove from the posting of discipline, as specified, an item
that through passage of time and evidence of rehabilitation is
no longer required in order to prevent a credible risk to
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members of the public utilizing licensed activity of the
licensee.
FISCAL EFFECT: Unknown. This bill is keyed fiscal by the
Legislative Counsel.
COMMENTS:
Purpose. This bill provides that a licensee of the BRE may
petition the Commissioner to remove his or her notice of
disciplinary action from the BRE's Internet Web site because the
licensee is no longer a credible risk to the public. This bill
is sponsored by the California Association of Realtors.
According to the author, "The current disciplinary system under
the BRE serves an important role in ensuring consumers have
access to a real estate licensee's disciplinary history. That
information serves as a valuable tool in protecting consumers
and promoting transparency. However, this tool has also
negatively impacted a small class of real estate licensees who
have had minor disciplinary actions on their record for many
years. Even after the licensee has been rehabilitated and the
license penalty has been removed, there isn't an opportunity to
have that action removed from the online database. This bill
simply provides the BRE Commissioner the ability to determine
how long certain disciplinary actions should be posted online,
ensuring that rehabilitated licensees are operating on a level
playing field."
Background. The mission of the BRE is to safeguard and promote
the public interests in real estate matters through licensure,
regulation, education and enforcement. The BRE's jurisdiction is
licensing and regulating mortgage loan originators, real estate
and prepaid listing service licensees, reviewing and approving
subdivision and time share offerings, and approving continuing
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education and pre-license courses.
A real estate license must first be obtained from the BRE if a
person wishes to engage in the real estate business and to act
in the capacity of, advertise, or assume to act as a real estate
broker or real estate salesperson within the State of
California. Currently, there are approximately 535,000 real
estate licensees in California.
Under current law, low-level disciplinary actions that the BRE
addresses via citation and fine do not appear on its website.
These infractions include, among others, when a person without a
real estate license engages in activities for which a real
estate license is required. The BRE investigates these
situations following standards set out in regulations.
Violations of provisions in law that warrant disciplinary action
can vary in greatly. For instance, a licensee may violate a
seemingly minor provision of his or her licensure in a severe
way. As such, a violation of one licensee's provisions could
lead to the same disciplinary action as another licensee who
violated a completely different provision. Likewise, a licensee
who repeatedly violates his or her provisions may have a more
severe disciplinary action taken against him or her than a
licensee who is noticed for his or her first violation. When a
disciplinary action is taken against a licensee, the
Commissioner is required to post a notice of discipline on the
BRE's Web site so that the information is available to a
consumer who searches specifically for that licensee. These
notices are posted to the Web site indefinitely.
However, according to the California Association of Realtors,
some licensees have used this information to gain a competitive
advantage over licensees with a record of discipline from the
BRE, even if the violation for which the licensee was
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disciplined is several years old, the licensee has complied with
corrective actions specified in the citation, and the violation
is no longer relevant to the licensee's ability to operate.
The Commissioner already has the authority to review
disciplinary actions against a licensee and evaluate whether the
disciplinary action should be modified. This bill would provide
an avenue for licensees to request a disciplinary action on the
BRE's website be removed if the Commissioner agrees that there
is evidence of rehabilitation and the licensee is not a
potential risk to consumers.
ARGUMENTS IN SUPPORT:
The California Association of Realtors writes in support, "This
bill creates a process by which a licensee can have an old
record of discipline removed from [the BRE] website profile if
the [Commissioner] determines that protection of the public
interest and public welfare will be adequately maintained.
Additionally, the process would be paid for by the petitioner
thereby avoiding any new costs to the [BRE]."
POLICY ISSUES FOR CONSIDERATION:
This bill requires the licensee who is petitioning to have his
or her notice of disciplinary action removed from the website
pay a fee to defray the cost of evaluation. It is unclear what
would be the expense to the licensee. The author may wish to
specify that the BRE develop, through regulations, a fee
schedule for the petition process.
IMPLEMENTATION ISSUES:
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1)This bill specifies that a licensee may petition the
Commissioner to remove the notice of disciplinary action if he
or she can show that he or she is no longer a credible risk to
the public. It is unclear how much time would constitute
"passage of time" before the licensee qualifies for the
petition.
2)This bill leaves the outcome of the petition to the discretion
of the Commissioner, but provides no guidelines for the
petitions to be minimally consistent.
To address the implementation concerns raised above, the author
should amend his bill as follows:
1)On page 3, subdivision (c) should be amended to read:
Upon petition by a licensee accompanied by a fee sufficient to
defray costs associated with consideration of a petition, the
commissioner shall remove from the posting of discipline
described in subdivision (a), an item that through passage of
time has been noticed on the bureau's Internet Website for no
less than ten years and for which the licensee provides
evidence of rehabilitation indicating that the notice is no
longer required in order to prevent a credible risk to members
of the public utilizing licensed activity of the licensee.
2)On page 3, after subdivision (c) insert "The bureau shall
develop, through regulations, the minimum information to be
included in a licensee's petition, including but not limited
to, a written justification and evidence of rehabilitation
pursuant to Business and Professions Code Section 482."
REGISTERED SUPPORT:
California Association of Realtors (Sponsor)
AB 1807
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REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Gabby Nepomuceno / B. & P. / (916) 319-3301