Amended in Senate April 12, 2016

Senate BillNo. 1196


Introduced by Senator Hill

February 18, 2016


An act to amend Sectionsbegin delete 10050 and 11301end deletebegin insert 10050, 10177, 11301, and 11340end insert of the Business and Professions Code, relating to real estate.

LEGISLATIVE COUNSEL’S DIGEST

SB 1196, as amended, Hill. Bureau of Real Estate: Bureau of Real Estatebegin delete Appraisers: review.end deletebegin insert Appraisers.end insert

Existing law, the Real Estate Law, provides for the licensure and regulation of real estate brokers and real estate salespersons by the Real Estate Commissioner, the chief officer of the Bureau of Real Estate within the Department of Consumer Affairs.begin insert That law authorizes the commissioner to suspend or revoke the license of a real estate licensee if the licensee has entered a plea of guilty or nolo contendere to, or been found guilty of, or been convicted of, a felony, or a crime substantially related to the qualifications, functions, or duties of a real estate licensee, and the time for appeal has elapsed or the judgment of conviction has been affirmed on appeal, or other conditions are met.end insert

Existing law, the Real Estate Appraisers’ Licensing and Certification Law, provides for the licensure, certification, and regulation of real estate appraisers and appraisal management companies by the Bureau of Real Estate Appraisers within the Department of Consumer Affairs, which is headed by the Chief of the Bureau of Real Estate Appraisers.begin insert That law requires the chief to adopt regulations governing the process and the procedure of applying for a real estate appraiser’s license and requires these regulations to include, among others, necessary experience or education.end insert

This bill would subject the Bureau of Real Estate and the Bureau of Real Estate Appraisers to review by the appropriate policy committees of the Legislature, as specified.begin insert The bill would further authorize the Real Estate Commissioner to suspend the license of a real estate licensee upon the entry of a guilty plea by the licensee to any of the crimes described above and would require the commissioner to rescind the suspension if the plea is withdrawn. The bill would further require the Chief of the Bureau of Real Estate Appraisers to require, as part of the educational requirements for applicants for licensure, the completion of a course on state and federal laws regulating the appraisal profession, as specified.end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 10050 of the Business and Professions
2Code
is amended to read:

3

10050.  

(a) (1) There is in the Department of Consumer Affairs
4a Bureau of Real Estate, the chief officer of which bureau is named
5the Real Estate Commissioner.

6(2) Notwithstanding any other law, the powers and duties of the
7bureau, as set forth in this part and Chapter 1 (commencing with
8Section 11000) of Part 2, shall be subject to review by the
9appropriate policy committees of the Legislature. The review shall
10be performed as if this part and that chapter were scheduled to be
11repealed as of January 1, 2021.

12(b) It shall be the principal responsibility of the commissioner
13to enforce all laws in this part and Chapter 1 (commencing with
14Section 11000) of Part 2 in a manner that achieves the maximum
15protection for the purchasers of real property and those persons
16dealing with real estate licensees.

17(c) Wherever the term “commissioner” is used in this division,
18it means the Real Estate Commissioner.

19begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 10177 of the end insertbegin insertBusiness and Professions Codeend insert
20
begin insert is amended to read:end insert

21

10177.  

The commissioner may suspend or revoke the license
22of a real estate licensee, delay the renewal of a license of a real
23estate licensee, or deny the issuance of a license to an applicant,
24who has done any of the following, or may suspend or revoke the
P3    1license of a corporation, delay the renewal of a license of a
2corporation, or deny the issuance of a license to a corporation, if
3an officer, director, or person owning or controlling 10 percent or
4more of the corporation’s stock has done any of the following:

5(a) Procured, or attempted to procure, a real estate license or
6license renewal, for himself or herself or a salesperson, by fraud,
7misrepresentation, or deceit, or by making a material misstatement
8of fact in an application for a real estate license, license renewal,
9or reinstatement.

10(b) begin insert(1)end insertbegin insertend insert Entered a plea of guilty or nolo contendere to, or been
11found guilty of, or been convicted of, a felony, or a crime
12substantially related to the qualifications, functions, or duties of a
13real estate licensee, and the time for appeal has elapsed or the
14judgment of conviction has been affirmed on appeal, irrespective
15of an order granting probation following that conviction,
16suspending the imposition of sentence, or of a subsequent order
17under Section 1203.4 of the Penal Code allowing that licensee to
18withdraw his or her plea of guilty and to enter a plea of not guilty,
19or dismissing the accusation or information.

begin insert

20
(2) Notwithstanding paragraph (1), and with the recognition
21that sentencing may not occur for months or years following the
22entry of a guilty plea, the commissioner may suspend the license
23of a real estate licensee upon the entry by the licensee of a guilty
24plea to any of the crimes described in paragraph (1). If the guilty
25plea is withdrawn, the suspension shall be rescinded and the
26license reinstated to its status prior to the suspension. The bureau
27shall notify a person whose license is subject to suspension
28pursuant to this paragraph of his or her right to elect to have the
29issue of the suspension heard in accordance with Section 10100.

end insert

30(c) Knowingly authorized, directed, connived at, or aided in the
31publication, advertisement, distribution, or circulation of a material
32false statement or representation concerning his or her designation
33or certification of special education, credential, trade organization
34membership, or business, or concerning a business opportunity or
35a land or subdivision, as defined in Chapter 1 (commencing with
36Section 11000) of Part 2, offered for sale.

37(d) Willfully disregarded or violated the Real Estate Law (Part
381 (commencing with Section 10000)) or Chapter 1 (commencing
39with Section 11000) of Part 2 or the rules and regulations of the
40commissioner for the administration and enforcement of the Real
P4    1Estate Law and Chapter 1 (commencing with Section 11000) of
2Part 2.

3(e) Willfully used the term “realtor” or a trade name or insignia
4of membership in a real estate organization of which the licensee
5is not a member.

6(f) Acted or conducted himself or herself in a manner that would
7have warranted the denial of his or her application for a real estate
8license, or either had a license denied or had a license issued by
9another agency of this state, another state, or the federal
10government revoked or suspended for acts that, if done by a real
11estate licensee, would be grounds for the suspension or revocation
12of a California real estate license, if the action of denial, revocation,
13or suspension by the other agency or entity was taken only after
14giving the licensee or applicant fair notice of the charges, an
15opportunity for a hearing, and other due process protections
16comparable to the Administrative Procedure Act (Chapter 3.5
17(commencing with Section 11340), Chapter 4 (commencing with
18Section 11370), and Chapter 5 (commencing with Section 11500)
19of Part 1 of Division 3 of Title 2 of the Government Code), and
20only upon an express finding of a violation of law by the agency
21or entity.

22(g) Demonstrated negligence or incompetence in performing
23an act for which he or she is required to hold a license.

24(h) As a broker licensee, failed to exercise reasonable
25supervision over the activities of his or her salespersons, or, as the
26officer designated by a corporate broker licensee, failed to exercise
27reasonable supervision and control of the activities of the
28corporation for which a real estate license is required.

29(i) Used his or her employment by a governmental agency in a
30capacity giving access to records, other than public records, in a
31manner that violates the confidential nature of the records.

32(j) Engaged in any other conduct, whether of the same or a
33different character than specified in this section, that constitutes
34fraud or dishonest dealing.

35(k) Violated any of the terms, conditions, restrictions, and
36limitations contained in an order granting a restricted license.

37(l) (1) Solicited or induced the sale, lease, or listing for sale or
38lease of residential property on the ground, wholly or in part, of
39loss of value, increase in crime, or decline of the quality of the
40schools due to the present or prospective entry into the
P5    1neighborhood of a person or persons having a characteristic listed
2in subdivision (a) or (d) of Section 12955 of the Government Code,
3as those characteristics are defined in Sections 12926 and 12926.1,
4subdivision (m) and paragraph (1) of subdivision (p) of Section
512955, and Section 12955.2 of the Government Code.

6(2) Notwithstanding paragraph (1), with respect to familial
7status, paragraph (1) shall not be construed to apply to housing for
8older persons, as defined in Section 12955.9 of the Government
9Code. With respect to familial status, nothing in paragraph (1)
10shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11,
11and 799.5 of the Civil Code, relating to housing for senior citizens.
12Subdivision (d) of Section 51 and Section 4760 of the Civil Code
13and subdivisions (n), (o), and (p) of Section 12955 of the
14Government Code shall apply to paragraph (1).

15(m) Violated the Franchise Investment Law (Division 5
16(commencing with Section 31000) of Title 4 of the Corporations
17Code) or regulations of the Commissioner of Corporations
18pertaining thereto.

19(n) Violated the Corporate Securities Law of 1968 (Division 1
20(commencing with Section 25000) of Title 4 of the Corporations
21Code) or the regulations of the Commissioner of Corporations
22pertaining thereto.

23(o) Failed to disclose to the buyer of real property, in a
24transaction in which the licensee is an agent for the buyer, the
25 nature and extent of a licensee’s direct or indirect ownership
26interest in that real property. The direct or indirect ownership
27interest in the property by a person related to the licensee by blood
28or marriage, by an entity in which the licensee has an ownership
29interest, or by any other person with whom the licensee has a
30special relationship shall be disclosed to the buyer.

31(p) Violated Article 6 (commencing with Section 10237).

32(q) Violated or failed to comply with Chapter 2 (commencing
33with Section 2920) of Title 14 of Part 4 of Division 3 of the Civil
34Code, related to mortgages.

35If a real estate broker that is a corporation has not done any of
36the foregoing acts, either directly or through its employees, agents,
37officers, directors, or persons owning or controlling 10 percent or
38more of the corporation’s stock, the commissioner may not deny
39the issuance or delay the renewal of a real estate license to, or
40suspend or revoke the real estate license of, the corporation,
P6    1provided that any offending officer, director, or stockholder, who
2has done any of the foregoing acts individually and not on behalf
3of the corporation, has been completely disassociated from any
4affiliation or ownership in the corporation. A decision by the
5commissioner to delay the renewal of a real estate license shall
6toll the expiration of that license until the results of any pending
7disciplinary actions against that licensee are final, or until the
8licensee voluntarily surrenders his, her, or its license, whichever
9is earlier.

begin delete

10This section shall become operative on July 1, 2012.

end delete
11

begin deleteSEC. 2.end delete
12
begin insertSEC. 3.end insert  

Section 11301 of the Business and Professions Code
13 is amended to read:

14

11301.  

begin delete(a)(1)end deletebegin deleteend deletebegin insert(a)end insertbegin insertend insertbegin insert(1)end insertbegin insertend insert There is hereby created within the
15Department of Consumer Affairs a Bureau of Real Estate
16Appraisers to administer and enforce this part.

17(2) Notwithstanding any other law, the powers and duties of the
18bureau, as set forth in this part, shall be subject to review by the
19appropriate policy committees of the Legislature. The review shall
20be performed as if this part were scheduled to be repealed as of
21January 1, 2021.

22(b) Whenever the term “Office of Real Estate Appraisers”
23appears in any other law, it means the “Bureau of Real Estate
24Appraisers.”

25begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 11340 of the end insertbegin insertBusiness and Professions Codeend insert
26
begin insert is amended to read:end insert

27

11340.  

The director shall adopt regulations governing the
28process and the procedure of applying for a license which shall
29include, but not be limited to, necessary experience or education,
30equivalency, and minimum requirements of the Appraisal
31Foundation, if any.

32(a) For purposes of the educational background requirements
33established under this section, the director shallbegin delete grantend deletebegin insert do both of
34the following:end insert

35begin insert(1)end insertbegin insertend insertbegin insertGrantend insert credits for any courses taken on real estate appraisal
36ethics or practices pursuant to Section 10153.2, or which are
37deemed by the director to meet standards established pursuant to
38this part and federal law.

begin insert

39
(2) Require the completion of a course on state and federal laws
40regulating the appraisal profession, as approved by the bureau
P7    1every two years. The course shall include an examination that
2requires an applicant to demonstrate the applicant’s knowledge
3of those laws.

end insert

4(b) For the purpose of implementing and applying this section,
5the director shall prescribe by regulation “equivalent courses” and
6“equivalent experience.” The experience of employees of an
7assessor’s office or of the State Board of Equalization in setting
8 forth opinions of value of real property for tax purposes shall be
9deemed equivalent to experience in federally related real estate
10appraisal activity. Notwithstanding any other law, a holder of a
11valid real estate broker license shall be deemed to have completed
12appraisal license application experience requirements upon proof
13that he or she has accumulated 1,000 hours of experience in the
14valuation of real property.

15(c) The director shall adopt regulations for licensure which shall
16meet, at a minimum, the requirements and standards established
17by the Appraisal Foundation and the federal financial institutions
18regulatory agencies acting pursuant to Section 1112 of the Financial
19Institutions Reform Recovery and Enforcement Act of 1989, Public
20Law 101-73 (FIRREA). The director shall, by regulation, require
21the application for a real estate appraiser license to include the
22applicant’s social security number.

23(d) In evaluating the experience of any applicant for a license,
24regardless of the number of hours required of that applicant, the
25director shall apply the same standards to the experience of all
26applicants.

27(e) No license shall be issued to an applicant who is less than
2818 years of age.



O

    98