BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 710|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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UNFINISHED BUSINESS
Bill No: SB 710
Author: Galgiani (D), et al.
Amended: 6/9/16
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR: 79-0, 6/30/16 (Consent) - See last page for
vote
SUBJECT: Real estate licensees: fictitious business names:
team names
SOURCE: California Association of Realtors
DIGEST: 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.
Assembly Amendments make a corrective change to the definition
of "responsible broker's identity" to only state the name under
which the responsible broker is currently licensed by the
California Bureau of Real Estate (CalBRE) and conducts business
in general or is a substantial division of the real estate firm,
or both the name and the associated license identification
number.
ANALYSIS:
SB 710
Page 2
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,
10132)
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 §§ 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 Section 17910)
SB 710
Page 3
8) Authorizes the use of an FBN for acts requiring a real
estate license if the 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))
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:
SB 710
Page 4
1) Makes technical and clarifying changes to existing real
estate FBN and team name provisions.
2) 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.
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)).
Many real estate salespersons work together in teams and use a
team name, e.g. "The Smith Team." Before AB 2018 (Bocanegra,
Chapter 892, Statutes of 2014), many team names could have been
considered an FBN and been required by counties to register that
team name as an 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 an FBN under state law and does not require
registration with CalBRE, so it does not require registration of
that name with the county.
SB 710
Page 5
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 California Association of Realtors 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 Web site, 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified7/12/16)
California Association of Realtors
OPPOSITION: (Verified7/12/16)
None received
ARGUMENTS IN SUPPORT: The California Association of Realtors
writes that 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."
SB 710
Page 6
ASSEMBLY FLOOR: 79-0, 6/30/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Melendez
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
7/29/16 10:51:49
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