BILL ANALYSIS Ó
AB 2330
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ASSEMBLY THIRD READING
AB
2330 (Ridley-Thomas)
As Introduced February 18, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Business & |16-0 |Salas, Brough, Baker, | |
|Professions | |Bloom, Campos, | |
| | |Chávez, Dahle, Dodd, | |
| | |Eggman, Gatto, Gomez, | |
| | |Holden, Jones, | |
| | |Mullin, Ting, Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood | |
| | | | |
| | | | |
AB 2330
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SUMMARY: Requires the Real Estate Commissioner (Commissioner)
to disclose on the Bureau of Real Estate's (BRE) Web site for
every licensee, whether that licensee is an associate licensee,
and further requires the Commissioner to identify, if the
associate licensee is also a broker, every responsible broker
with whom the associate licensee is contractually associated.
Specifically, this bill:
1)Requires the Commissioner to disclose on the BRE's website for
every licensee, whether that licensee is an associate
licensee.
2)Requires the Commissioner to identify on its website, if the
associate licensee is also a broker, every responsible broker
with whom the associate licensee is contractually associated.
FISCAL EFFECT: According to the Assembly Committee on
Appropriations, total cost of $153,000 (special funds) in fiscal
year (FY) 2016/17, and $137,000 (special funds) in FY 2017/18
and ongoing for 2.0 Program Technician II positions to handle
the associated workload required to implement the bill, plus
additional costs of $65,000, likely absorbable, for necessary
changes to the Bureau's information technology (IT) systems.
The Bureau does not currently collect information related to the
contractual relationship(s) between brokers and would therefore
require that information to be provided by their licensees.
These costs, which are fee supported, assume the same type of
processing currently used by Bureau to collect and disclose
similar information for salespersons will be required to
implement the provisions of this bill.
COMMENTS:
Purpose. This bill is sponsored by the California Association
of Realtors. According to the author, "This bill will close an
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important deficiency in existing law by identifying who a real
estate broker is working for when that broker is not acting
under his or her own license. Existing provisions, such as the
Homeowner's Bill of Rights, already require transparency in
other areas of real estate transactions. AB 2330 makes sure
that consumers always have access to information that affects
one of the biggest purchases of their lifetime."
Brokers and Salespersons. To obtain a broker's license,
applicants are required to submit evidence of at least two years
of experience as a real estate salesperson, in addition to
elevated education requirements and passage of a written
examination. In order to obtain a real estate broker license,
an individual, in most cases, must have held a real estate
salesperson's license for at least two years during which time
he or she must have been actively engaged in real estate, meet
certain real estate education requirements in addition to
passing an examination. Broker and salesperson licenses are
issued for a four-year period. In general, both types of
licenses may be renewed by submitting the appropriate fee and
application, and evidence of completion of 45 hours of
BRE-approved continuing education courses. These courses
include 15 hours of required courses in ethics, agency
relationships, trust fund handling, fair housing, and risk
management, and at least 18 hours in courses dedicated to
consumer protection. The remaining courses, up to 12 hours of
electives, may be related either to consumer protection or
consumer services that will enable the licensee to achieve a
high level of competence in serving the objectives of consumers
who may engage the services of licensees to secure the transfer,
financing, or similar objectives with respect to real property,
including organizational and management techniques.
Unlike salespersons, licensed brokers are not required to
operate under the supervision of another broker. Brokers are
authorized to be the direct fiduciary representative of their
clients on matters pertaining to the sale of real property.
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Brokers are also free to form contractual associations and
partnerships that are largely governed under the civil code.
Salespersons are required to report to the BRE within five days
of changing supervising brokers, and the BRE discloses this
information online. However, there is no similar requirement to
collect and disclose this information for brokers who are acting
as a contractual agent of another broker.
Associate Licensees. An associate licensee is defined in the
civil code as a licensee who is acting as an agent of a broker
in connection with real property transactions. A broker can
also act as an associate licensee, but the BRE's Web site does
not distinguish between brokers working independently and
brokers voluntarily operating under the supervision of another
broker. The author writes that without this legislation, a
member of the public would not know if, or whom, a licensed real
estate professional is supervised by, in case of a complaint.
The BRE has not reported complaints regarding this issue, but
the author proposes that more transparency regarding employment
structure is beneficial to the consumer.
Analysis Prepared by:
Elissa Silva / B. & P. / (916) 319-3301 FN:
0003174
AB 2330
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