BILL ANALYSIS Ó
SB 710
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Date of Hearing: June 21, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
SB 710(Galgiani) - As Amended June 9, 2016
NOTE: This bill adds an urgency clause.
SENATE VOTE: 39-0 [vote not reflective of this bill version]
SUBJECT: Real estate licensees: fictitious business names:
team names
SUMMARY: Corrects a drafting error that requires the listing of
a company name and a responsible broker's license number on all
team advertising and instead requires only one or the other to
be listed.
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) Sections
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 Sections
10017, 10132)
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3)Defines a "fictitious business name" (FBN) 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 Sections 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 Section
10159.7(a)(5))
5)Defines "responsible broker" as the broker responsible for the
supervision of licensed salespersons. (BPC Section
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
Section 10159.7(a)(1))
7)Requires a person using a FBN to file a FBN statement with the
county clerk. (BPC Section 17910)
8)Authorizes the use of a 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 Sections
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 Section 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 a 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)Corrects a drafting error that requires the listing of a
company name and a responsible broker's license number on all
"team" advertising and instead requires only one or the other
to be listed.
FISCAL EFFECT: None. This bill is keyed non-fiscal by the
Legislative Counsel.
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COMMENTS:
Purpose. This bill is sponsored by the California Association
of Realtors (CAR) . This bill corrects a drafting error that
requires the listing of a company name and a responsible
broker's license number on all team advertising and instead
requires only one or the other to be listed.
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 a FBN, and clarified that 'team names' are not required to
be registered with [CalBRE], SB 146 [(Galgiani) Chapter 129,
Statute of 2015] made it clear that the law regarding 'team
names' was applied consistently at all levels of government.
[This bill] seeks to simply correct a drafting error in that law
which requires the listing of a company name and a responsible
broker's license number on all 'team' advertising. This bill
would require one or the other to be listed, but not both in
order to avoid including duplicative information on these
advertisements."
Background. A 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)).
Many real estate salespersons work together in teams and use a
team name, e.g. "The Smith Team." Before AB 2018 (Bocanegra),
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Chapter 892, Statutes of 2014, many team names could have been
considered a FBN and been required by counties to register that
team name as a FBN. AB 2018 established statutorily prescribed
team advertising requirements and requires real estate licensees
conducting any advertising, including print or electric media
and for sale signs, who use a team name to include the
licensee's name and license number in a conspicuous manner. The
statute further requires the responsible broker's identity (or
company name) to be displayed as "prominently and conspicuously"
as the team name in all advertising. In 2015, SB 146
(Galgiani), Chapter 129, Statutes of 2015 clarified that a real
estate team name is not a FBN under state law and does not
require registration with CalBRE, so it does not require
registration of that name with the county.
It is unclear if consumers could be confused by a common name
such as "The Smith Team" due to the potential prevalence of that
name. However, the CAR maintains that the inclusion of the
individual's licensee number in these advertisements, as
required by BPC Section 10159.6, should alleviate most of the
confusion. While not all team names will be unique, most can be
attributed to a responsible broker if the consumer chooses to
search for information relevant to a particular team name on the
CalBRE website, and should not lead to confusion.
Consumers will continue to be able to locate the licensee's
responsible broker by searching either the individual's license
number listed on the team advertisement or by looking up the
responsible broker's identity (i.e. company name) which must be
displayed on the team advertising.
Current Related Legislation. SB 1196 (Hill) of the current
Legislative Session, extends the sunset date for the Bureau of
Real Estate and Bureau of Real Estate Appraisers, among other
things, and makes other technical changes. STATUS: This bill is
pending in the Assembly Committee on Business and Professions.
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Prior Related Legislation. SB 146 (Galgiani), Chapter 129,
Statutes of 2015, clarified existing law on real estate team
names and fictitious business names (FBN) and narrowed the
definition of a 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.
AB 2018 (Bocanegra), Chapter 892, Statutes of 2014, established
statutorily prescribed team advertising requirements.
ARGUMENTS IN SUPPORT:
The California Association of Realtors writes in support, "[This
bill] seeks to correct a drafting error that requires the
listing of a company name and a responsible broker's license
number on all team advertising. This bill would require one or
the other to be listed, but not both, as the inadvertently
created standard under SB 146 is unnecessarily burdensome and
duplicative."
REGISTERED SUPPORT:
California Association of Realtors (sponsor)
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Gabby Nepomuceno / B. & P. / (916) 319-3301
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