BILL ANALYSIS Ó
SB 146
Page 1
Date of Hearing: June 23, 2015
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Susan Bonilla, Chair
SB 146(Galgiani) - As Amended June 18, 2015
SENATE VOTE: 38-0
NOTE: This bill adds an urgency clause.
SUBJECT: Real estate licensees: fictitious business names: team
names.
SUMMARY: Clarifies existing law on real estate "team names" and
"fictitious business names" (FBN) and narrows the definition of
an FBN's "responsible broker's identity" to the name used by the
responsible broker to operate or conduct business in general for
the real estate firm.
EXISTING LAW:
1)Defines a "real estate broker" as a person who, among other
things, sells, buys, or rents real property for another for
compensation. (Business and Professions Code (BCP) §§
10131-10131.6)
2)Defines a "real estate salesperson" as a natural person who is
employed by a licensed real estate broker to perform any act
of a real estate broker for compensation. (BPC §§ 10017,
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10132)
3)Defines "fictitious business name" as a name used for
business, including real estate, which does not include the
surname of the business owners or suggest the existence of
other owners. (BPC §§ 10159.7(a)(2), 17900)
4)Defines "team name" as a professional identity or brand name
used by a salesperson, and one or more other real estate
licensees, to provide real estate services. (BPC §
10159.7(a)(5))
5)Defines "responsible broker" as the broker responsible for the
supervision of licensed salespersons. (BPC § 10159.7(a)(4))
6)Defines "responsible broker's identity" as a name under which
the responsible broker operates or conducts business which may
include a sole proprietorship or business entity name. (BPC §
10159.7(a)(1))
7)Requires a person using an FBN to file an FBN statement with
the county clerk. (BPC § 17910)
8)Authorizes the use of an FBN for acts requiring a real estate
license if the California Bureau of Real Estate (CalBRE) has
approved the FBN under an additional license. (BPC §§
10159.5(a), 10159.7(a)(2))
9)Requires advertising materials using an authorized FBN to
display the responsible broker's identity as prominently as
the FBN. (BPC § 10159.5(d))
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10)Provides that the use of a team name does not require a
separate FBN license. (BPC § 10159.7(a)(5))
11)Provides that a team name is not an FBN if: (BPC §
10159.7(a)(5))
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";
and,
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 independent of a licensed broker.
THIS BILL:
12)Makes technical and clarifying changes to existing real
estate FBN and team name provisions.
13)Revises the definition of "responsible broker's identity" to
mean a name and the associated license under which a
responsible broker conducts business for a real estate firm
that does not include an FBN or a team name used by a
salesperson for a sales team.
FISCAL EFFECT: None. This bill is keyed non-fiscal by the
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Legislative Counsel.
COMMENTS:
Purpose. This bill is sponsored by the California Association
of Realtors . According to the author, "While AB 2018
[(Bocanegra), Chapter 892, Statutes of 2014] resolved some
ambiguity by statutorily defining how a salesperson with their
broker's permission can use [an] FBN, and clarified that 'team
names' are not required to be registered with [CalBRE], real
estate licensees are still being advised to continue to register
these 'team names' with their county. [This bill] will make it
clear that the law regarding 'team names' is applied
consistently at all levels of government and will ensure that
'team names' do not constitute an FBN, and thus do not require
registration with the county."
Background. An FBN is a statutorily defined "fake name" that a
person uses when conducting business if the person does not wish
to use a real name. In California, the registration of FBNs is
meant, "to protect those dealing with individuals or
partnerships doing business under fictitious names, and?
designed to make available to the public the identities of
persons doing business under the fictitious name" (BPC §
17900(a)(1)).
According to CalBRE, many real estate salespersons work together
in teams and use a team name, e.g. "The Smith Team." Because
many team names fall within the definition of an FBN, counties
usually require licensees to register a team name as an FBN,
even if it did not meet the definition. As a result, state law
now clarifies when a real estate team name is not an FBN and
does not require registration of the team name.
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However, the sponsors note that counties continue to require
sales teams to register a non-FBN team name as an FBN. This bill
aims to clarify that qualifying a team name does not require
registration or an additional license. It also adds additional,
clarifying language for the required disclosures and
definitions.
Prior Related Legislation. AB 2018 (Bocanegra), Chapter 892,
Statutes of 2014, established criteria to distinguish a real
estate sales team name from an FBN and established advertising
disclosure requirements. It also clarified that when a team
name is not an FBN, the team name does not require registration
with the county or an additional license.
ARGUMENTS IN SUPPORT:
The California Association of Realtors writes in support, "In
2014, C.A.R. sponsored AB 2018 ?. While AB 2018 made compliance
easier and created more industry transparency, there is some
confusion regarding the county registration requirements for
'team names.' Even though it is clear that 'team names' are not
required to be registered with CalBRE, real estate licensees are
being advised to continue to register these 'team names' with
their county."
ARGUMENTS IN OPPOSITION:
None on file.
REGISTERED SUPPORT:
California Association of Realtors (sponsor)
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REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Vincent Chee / B. & P. / (916) 319-3301