BILL ANALYSIS �
AB 1718
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Date of Hearing: April 10, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 1718 (Hill) - As Introduced: February 16, 2012
SUBJECT : Real estate broker licenses.
SUMMARY : Deletes the Real Estate Commissioner's (Commissioner)
authority to grant an original real estate broker's license to
an applicant that has graduated from a four-year college or
university course, which included specialization in real estate,
in lieu of two years of general real estate experience, and
instead authorizes the Commissioner to treat a degree from a
four-year college or university, with a major or minor in real
estate, as the equivalent of two years' general real estate
experience. Specifically, this bill :
1)Requires an applicant for an original real estate broker's
license to demonstrate to the Commissioner that he or she has
held a real estate sales person's license for at least two
years; qualified for the renewal this license during the
previous five years; and, was actively engaged in the business
of real estate salesperson during that time.
2)Deletes the Commissioner's authority to grant an original real
estate broker's license to an applicant that has graduated
from a four-year college or university course, which included
specialization in real estate, and instead authorizes the
Commissioner to treat a degree from a four-year college or
university, which course of study included a major or minor in
real estate, as the equivalent of two years' general real
estate experience.
EXISTING LAW :
1)Provides for the licensure and regulation of real estate
salespersons and real estate brokers, under the Real Estate
Law.
2)Authorizes the Commissioner to issue a real estate broker's
license to an applicant who:
a) Has at least two years of general real estate experience
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or graduated from a four-year college or university course
with a specialization in real estate;
b) Files a written petition with the Department of Real
Estate (DRE), which is approved by the Commissioner,
setting forth his or her qualifications and experience;
and,
c) Passes an examination and satisfies other requirements.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author, "Unqualified
individuals lacking sufficient experience are able to get their
real estate broker's license by exploiting a loophole in current
law that permits an unrelated college degree to be substituted
for actual experience in real estate.
"Specifically, one of the criteria for a real estate broker's
license is a minimum two years full-time experience as a
licensed sales person within the last five years. That
experience criteria can be waived by the Commissioner if the
individual has a four-year degree from an accredited college.
This optional waiver by the Commissioner has evolved into a DRE
policy to approve all such requests as opposed to reviewing them
on a case-by-case basis. As such, individuals can essentially
substitute any four year degree, ex. in English, physical
education, chemistry, etc., for practical real world experience.
"AB 1718 would address this loophole by requiring that any
substitution of a four-year degree for the existing experience
requirement would be permitted only if the degree included a
major or minor in real estate.
"Real estate brokers supervise other sales agents, review
transaction documents, etc. Ideally, they should be people with
field experience. Barring that, the education background they
have should be extensive and pertinent to the practice of real
estate."
Background . Existing law requires applicants for a real estate
broker's license to have two years full-time experience in the
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real estate business. However, existing law also provides three
alternative ways to demonstrate the experience qualification:
1)A finding of equivalent experience and education by DRE;
2)Active membership in the State Bar; or,
3)A degree or "course" of study from a four-year college which
includes "a specialization in real estate."
This bill revises the alternative path to licensure as a real
estate broker described in #3 above by requiring a "major or
minor concentration in real estate" rather than a
"specialization" in real estate.
The University of California does not offer either a major or
minor concentration in real estate. However, the California
State University system does offer a minor concentration in real
estate as part of it bachelor's degree in Business
Administration at the East Bay, Fresno, Los Angeles, Northridge,
Pomona, Sacramento, San Bernardino, and San Diego campuses.
Previous legislation . SB 226 (Negrete McLeod) of 2007, required
DRE to adopt regulations that define the qualifying education
experience required for licensure as a real estate broker when
the applicant does not have experience as a real estate
salesperson. This bill was vetoed.
AB 1963 (Leslie) of 2006, would have repealed a provision of law
that allows a person to qualify for a real estate broker's
license by using a four year college degree and two years of
general real estate experience as a substitute for two years of
experience as a real estate sales person. This bill was vetoed.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Realtors (sponsor)
Opposition
None on file.
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
AB 1718
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319-3301