Amended in Assembly June 20, 2016

Amended in Senate April 12, 2016

Senate Bill No. 1196

Introduced by Senator Hill

begin insert

(Principal coauthors: Assembly Members Brough and Salas)

end insert

February 18, 2016

An act to amend Sections 10050, 10177, 11301, begin insert 11320, 11328, end insert and 11340 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 Estate Appraisers.

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. 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.

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. 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 begin delete education. end delete begin insert education and the submittal of an applicant’s social security number. To substantiate appraisal experience or to facilitate investigations, existing law requires that licensees, applicants, and persons acting in a capacity that requires a license to submit copies of appraisals or any other work product, as specified, and all supporting documentation. end insert

begin insert

A willful violation of these laws is a crime.

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. 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 begin delete specified. end delete begin insert specified, and would additionally authorize the submittal of an applicant’s individual taxpayer identification number. The bill would additionally require those licensees, applicants, and persons acting in a capacity that requires a license to submit copies of engagement letters. Because the willful failure to submit those engagement letters would be a crime, the bill would impose a state-mandated local program. end insert

begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

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

SECTION 1.  

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

10050.  

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

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

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

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

SEC. 2.  

Section 10177 of the Business and Professions Code
is amended to read:

10177.  

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

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

(b) (1) 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, irrespective
of an order granting probation following that conviction,
suspending the imposition of sentence, or of a subsequent order
under Section 1203.4 of the Penal Code allowing that licensee to
withdraw his or her plea of guilty and to enter a plea of not guilty,
or dismissing the accusation or information.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 3.  

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

11301.  

(a) (1) There is hereby created within the Department
of Consumer Affairs a Bureau of Real Estate Appraisers to
administer and enforce this part.

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

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

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 11320 of the end insert begin insert Business and Professions Code end insert

begin insert is amended to read: end insert

11320.  

No person shall engage in federally related real estate
appraisal activity governed by this part or assume or use the title
of or any title designation or abbreviation as a licensed appraiser
in this state without begin delete first obtaining a end delete begin insert an active end insert license as defined
in Section 11302. Any person who willfully violates this provision
is guilty of a public offense punishable by imprisonment pursuant
to subdivision (h) of Section 1170 of the Penal Code, or in a county
jail for not more than one year, or by a fine not exceeding ten
thousand dollars ($10,000), or by both the imprisonment and fine.
The possession of a license issued pursuant to this part does not
preempt the application of other statutes including the requirement
for specialized training or licensure pursuant to Article 3
(commencing with Section 750) of Chapter 2.5 of Division 1 of
the Public Resources Code.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 11328 of the end insert begin insert Business and Professions Code end insert

begin insert is amended to read: end insert

11328.  

To substantiate documentation of appraisal experience,
or to facilitate the investigation of illegal or unethical activities by
a licensee, applicant, or other person acting in a capacity that
requires a license, that licensee, applicant, or person shall, upon
the request of the director, submit copies of begin insert the engagement letters, end insert
appraisals, or any work product which is addressed by the Uniform
Standards of Professional Appraisal Practice, and all supporting
documentation and data to the office. This material shall be
confidential in accordance with the confidentiality provisions of
the Uniform Standards of Professional Appraisal Practice.

begin delete SEC. 4. end delete

begin insert SEC. 6. end insert   

Section 11340 of the Business and Professions Code
is amended to read:

11340.  

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

(a) For purposes of the educational background requirements
established under this section, the director shall do both of the
following:

(1) Grant credits for any courses taken on real estate appraisal
ethics or practices pursuant to Section 10153.2, or which are
deemed by the director to meet standards established pursuant to
this part and federal law.

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

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

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

begin insert number or individual taxpayer identification number. end insert

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

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

begin insert

begin insert SEC. 7. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert