BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1718|
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THIRD READING
Bill No: AB 1718
Author: Hill (D)
Amended: As introduced
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 8-0, 6/18/12
AYES: Price, Emmerson, Corbett, Hernandez, Negrete McLeod,
Strickland, Vargas, Wyland
NO VOTE RECORDED: Correa
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 71-1, 4/30/12 - See last page for vote
SUBJECT : Real estate broker licenses
SOURCE : California Association of Realtors
DIGEST : This bill repeals and recasts existing
requirements that must be met prior to the licensure of
real estate brokers, to provide that the Real Estate
Commissioner may grant an original real estate broker
license to an applicant who (1) has passed the real estate
broker license examination, (2) satisfied other specified
requirements, (3) either held a real estate salesperson's
license, or (4) holds an active membership in the State Bar
of California or has graduated from a four-year university
with a specialization in real estate.
ANALYSIS :
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Existing law:
1. Provides for the licensure and regulation of more than
483,000 real estate brokers, real estate salespersons,
and more than 22,000 mortgage loan originator license
endorsements by the Department Real Estate (DRE) in the
Business, Transportation and Housing Agency (BT&H). The
Real Estate Commissioner (Commissioner), who serves as
the chief executive of the DRE, is appointed by the
Governor, subject to Senate confirmation. The
Commissioner, through DRE, is responsible for the
regulation of real estate transactions and licensure of
real estate agents, brokers and appraisers. (Business
and Professions Code (BPC) Section 10000 et seq.)
2. Defines "real estate broker" as a person who, for
compensation or in expectation of compensation, does or
negotiates to do one or more of the following acts for
another or others: (BPC Section 10131)
A. Sells or offers to sell, buys or offers to buy,
solicits prospective sellers or purchasers, solicits
or obtains listings of, or negotiates the purchase,
sale or exchange of real property or a business
opportunity.
B. Leases or rents or offers to lease or rent, or
places for rent, or solicits listings of places for
rent, or solicits for prospective tenants, or
negotiates the sale, purchase or exchanges of leases
on real property, or on a business opportunity, or
collects rents from real property, or improvements
from business opportunities.
C. Assists or offers to assist in filing an
application for the purchase or lease of, or in
locating or entering upon, lands owned by the state
or federal government.
D. Solicits borrowers or lenders, negotiates loans or
collects payments or performs services for borrowers
or lenders in connection with loans secured directly
or collaterally by liens on real property or on a
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business opportunity.
E. Sells or offers to sell, buys or offers to buy,
exchanges or offers to exchange a real property sales
contract, or a promissory note secured directly or
collaterally by a lien on real property or on a
business opportunity, and performs services for the
holders thereof.
3. Provides that the following conditions must be met for
issuance of a real estate broker's license: (a) the
applicant must hold a real estate salesman's license for
at least two years and be eligible for renewal of that
license within five years of the application for a
broker's license; and (b) must be actively engaged in
the business of real estate salesperson during that
time. (BPC Section 10150.6)
3. Provides an exception to the above conditions, if the
applicant files a written petition to the DRE setting
forth his or her qualifications and experience to
include at least the equivalent of two years' general
real estate experience or graduation from a four-year
college or university course which included
specialization in real estate. (BPC Section 10150.6)
4. Allows for the immediate issuance of a broker's license
if either of the conditions in #3 above has been met and
the applicant passes the broker's license examination.
(BPC Section 10150.6)
5. Provides that all real estate licenses issued by the
Commissioner shall be for a period of four years.
Applicants shall qualify in the appropriate examination
and satisfy all other requirements prior to issuance of
the license. (BPC Section 10153.6)
This bill:
1. Requires an applicant for an original real estate
broker's license to demonstrate to the Commissioner that
he/she has held a real estate sales person's license for
at least two years; qualified for the renewal of this
license during the previous five years; and was actively
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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.
Background
Existing law generally requires applicants for a real
estate broker's license to have, among other things, two
years of full-time experience in the real estate business.
It also contains alternative ways to demonstrate the
experience qualification by meeting any of the following:
1. A finding of equivalent experience and education by the
Commissioner;
2. Active membership in the State Bar;
3. A degree or "course" of study from a four-year college
which "included a specialization in real estate."
This bill revises the alternative path to licensure as a
real estate by requiring a "major or minor concentration in
real estate" rather than a "specialization" in real estate.
The University of California states that it does not offer
either a major or minor concentration in real estate.
However, the California State University system does offer
a 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 7/2/12)
California Association of Realtors (source)
ARGUMENTS IN SUPPORT : According to the bill's sponsor,
the California Association of Realtors:
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.
The ability of the Real Estate Commissioner to waive the
experience criteria in exchange for a four-year degree
has evolved into essentially a de facto policy wherein
all such requests are approved as opposed to reviewing
them on a case-by-case basis. As such, individuals can
substitute any four-year degree, e.g., English, physical
education, chemistry, etc., for practical real world
experience.
Real estate brokers not only engage directly in real
estate transactions, but also supervise, hire, oversee
and review the work of other sales people. Coupled with
the increasing complexity and intricate details of the
industry, real world experience is increasingly
important. Barring that, an advanced degree with an
emphasis on real estate will better serve the public and
provide an important safeguard for consumers.
ASSEMBLY FLOOR : 71-1, 4/30/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Bonilla, Bradford, Buchanan,
Butler, Charles Calderon, Campos, Carter, Chesbro,
Conway, Dickinson, Eng, Feuer, Fletcher, Fong, Fuentes,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell,
Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Bonnie Lowenthal, Ma, Mansoor, Mendoza,
Miller, Mitchell, Monning, Morrell, Nestande, Nielsen,
Norby, Olsen, Pan, Perea, V. Manuel P�rez, Portantino,
Silva, Skinner, Solorio, Swanson, Torres, Valadao,
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Wagner, Wieckowski, Williams, Yamada, John A. P�rez
NOES: Donnelly
NO VOTE RECORDED: Blumenfield, Brownley, Cedillo, Cook,
Davis, Furutani, Logue, Smyth
JJA:m 7/3/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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