BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1807 (Bonta) - Real estate licensees
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|Version: June 22, 2016 |Policy Vote: B., P. & E.D. 9 - |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1807 would allow a licensee of the Bureau of Real
Estate to petition the Bureau to remove information about
disciplinary actions taken against the licensee, after ten years
have elapsed and certain conditions are met.
Fiscal
Impact:
Minor costs to adopt regulations specifying what information
must be provided by a petitioner to the Bureau of Real Estate
(Real Estate Fund).
One-time costs of $340,000 and ongoing costs of $290,000 per
year for the Bureau of Real Estate to evaluate petitions from
licensees and the licensee's past disciplinary history, and to
document the Bureau's decision on the petition (Real Estate
Fund). Because the requirement for the Bureau to retain
information on its website for ten years went into effect in
2011, the Bureau would not likely receive a substantial number
of petitions until 2019-20. The Bureau anticipates that about
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400 licensees per year would request disciplinary information
to be removed from the website. The bill requires a petitioner
to pay the Bureau a fee to cover the Bureau's workload. The
fee would be set at the level of a license fee (currently set
in statute at $300.) The Bureau anticipates this will generate
about $120,000 per year, partially offsetting the cost to
process the petitions.
Background: Under current law, the Bureau of Real Estate licenses real
estate brokers and salespersons in the state. Real estate
salespersons are licensed and work under a licensed broker, who
has retains fiduciary responsibly to the client. Under current
law, an associate licensee is a licensed salesperson or licensed
broker who is working under the supervision of a licensed
broker. Under current law and practice, the Bureau of Real
Estate publishes information about licensed salespersons and
brokers on its website.
Under current law and practice, the Bureau has the authority to
take disciplinary action against a licensee for violations of
law or regulation governing real estate sales. The scope of
disciplinary action taken by the Bureau depends on the
particular facts of an allegation. For minor or first time
violations, the Bureau may impose a citation or fine. In those
cases, information about the disciplinary action is not required
to be posted on the Bureau's website. For more serious
violations (for example violations that caused harm to the
public), the Bureau is likely to revoke a license or place
restrictions on a license. In those cases, the disciplinary
action taken by the Bureau is required to be posted on its
website (so that consumers can look up a licensee's disciplinary
history). Current law requires information on disciplinary
actions to be retained on the Bureau's website for ten years.
Proposed Law:
AB 1807 would allow a licensee of the Bureau of Real Estate to
petition the Bureau to remove information about disciplinary
actions taken against the licensee, after ten years have elapsed
and certain conditions are met.
Specific provisions of the bill would:
Authorize the Real Estate Commissioner (the chief officer of
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the Bureau of Real Estate) to remove a posting of a
disciplinary action against a licensee, upon a petition of the
licensee;
Require the petitioner to pay a fee to the Bureau;
Require ten years to have elapsed before any disciplinary
information is removed from the Bureau's website;
Require the petitioner to demonstrate evidence of
rehabilitation, such that notice is no longer needed to
protect the public;
Authorize the bureau to develop information to be included in
a petition, through the adoption of regulations;
Set the fee to be paid by a petitioner at the fee set in
statute for a real estate salesperson or real estate broker
(currently set at $300).
Staff
Comments: The Bureau indicates that since the housing bubble
preceding the Great Recession, there have been a significant
number of disciplinary actions that have been taken against
licensees or are in process. The Bureau anticipates that once
ten years have elapsed, there is likely to be a significant
number of petitions to remove disciplinary information relating
to those disciplinary actions. The Bureau indicates that the
ongoing workload and costs indicated above are likely to persist
for several years and then to moderate as the large number of
disciplinary actions relating to the housing bubble are
addressed.
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