BILL ANALYSIS Ó
AB 2330
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
2330 (Ridley-Thomas)
As Amended August 19, 2016
Majority vote
--------------------------------------------------------------------
|ASSEMBLY: |80-0 |(May 31, 2016) |SENATE: |39-0 |(August 23, |
| | | | | |2016) |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------
Original Committee Reference: B. & P.
SUMMARY: Requires, beginning January 1, 2018, 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, requires the Commissioner to
identify, if the associate licensee is also a broker, every
responsible broker with whom the associate licensee is
contractually associated, and further requires the responsible
broker to report the employment relationship between himself or
herself and the associate licensee to the BRE. Specifically,
this bill:
1)Requires the Commissioner to disclose on the BRE's Web site
for every licensee, whether that licensee is an associate
licensee, beginning January 1, 2018.
2)Requires the Commissioner to identify on its Web site, if the
associate licensee is also a broker, every responsible broker
with whom the associate licensee is contractually associated,
AB 2330
Page 2
beginning January 1, 2018.
3)Requires the responsible broker to report the employment
relationship between himself or herself and the associate
licensee to the BRE, beginning January 1, 2018.
4)Adds language to avoid chaptering out issues with AB 1807
(Bonta), of the current legislative session.
5)Makes other technical and clarifying changes.
The Senate amendments require that a responsible broker report
the employment relationship between himself or herself and the
associate licensee to the BRE, as specified, make other minor
technical and clarifying amendments, and, add language to avoid
chaptering out issues with AB 1807 (Bonta), of the current
legislative session.
FISCAL EFFECT: According to the Senate Appropriations
Committee, this bill will result in one-time costs of about
$140,000 per year for two years and ongoing costs of $80,000 per
year to collect the required information and make it available
on the Bureau's Web site (Real Estate Fund).
COMMENTS:
Purpose. This bill is sponsored by the California Association
of Realtors. According to the author, "This bill will close an
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. [This bill] makes sure
that consumers always have access to information that affects
one of the biggest purchases of their lifetime."
AB 2330
Page 3
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.
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
AB 2330
Page 4
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:
0004881