BILL ANALYSIS �
AB 2018
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Date of Hearing: April 29, 2014
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Susan A. Bonilla, Chair
AB 2018 (Bocanegra) - As Amended: April 21, 2014
SUBJECT : Real estate licensees: fictitious business names.
SUMMARY : Authorizes the California Bureau of Real Estate
(CalBRE) to determine when a business name is not considered a
fictitious business name if it meets specified requirements.
Specifically, this bill :
1)Provides that a business name is not a fictitious business
name if all of the following conditions are satisfied:
a) The business name is used by two or more real estate
licensees;
b) The business name includes one or more first and
last names or surnames in conjunction with the term
"associates," "group," or "team"; and
c) For all marketing and advertising materials in print
or electronic media, "for sale" signage, and solicitation
materials intended to be the first point of contact with
consumers, the licensees shall include their first and
last names or surnames, their license numbers, and the
equally prominent name of the employing broker, as
specified.
2)Provides that nothing in this section be construed to limit or
change a real estate broker's duties to supervise a
salesperson.
3)Defines a business name using the term "associates," "group,"
or "team" to mean an association of two or more real estate
licensees.
4)Makes other technical and clarifying amendments.
EXISTING LAW
1)Establishes the CalBRE, which is headed by the Real Estate
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Commissioner, which issues licenses to and regulates real
estate brokers and real estate salespersons under the Real
Estate Law. (Business and Professions Code (BPC) Section
10150 et seq.)
2)Requires an applicant who desires to have his or her license
issued under a fictitious business name to file with his or
her application a certified copy of his or her fictitious
business name statement. (BPC 10159.5)
3)Provides that "solicitation materials intended to be the first
point of contact with consumers," includes business cards,
stationery, advertising fliers, and other materials designed
to solicit the creation of a professional relationship between
the licensee and a consumer, and excludes an advertisement in
print or electronic media and "for sale" signs. (BPC 10140.6)
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the bill . This bill specifies when a business name
advertised in a real estate context is not considered a
fictitious business name. The author's aim is to specify the
rules for business names which make the identities of the
constituent licensees sufficiently clear to consumers so that
the regulatory burden of registering as a fictitious business
is unnecessary. This bill is author sponsored.
2)Author's statement . According to the author, "Real estate
licensees are NOT permitted to make any misleading or false
representations within their advertisements or marketing
materials. Because salespersons activities are supervised by
an employing broker, they are not permitted to hold themselves
out as an unsupervised licensee or independent real estate
firm. In recent years, salespersons (real estate licensees)
attempting to create their own brand identity, for marketing
purposes, has led to an increased use in 'team' marketing
approaches within Brokerages. Throughout California 'team'
names (i.e. 'The Smith Team') are often included on for sale
signs, billboards, business cards, promotional flyers, emails,
and brochures."
"Current law requires individuals wishing to use a fictitious
business name to register that name with the County Recorder.
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A fictitious business name is any name that is not your own.
Example 1: The John Smith Team. Because this 'business'
contains a full name, it would not generally be considered a
fictitious business name. Example 2: The Widget Company.
This 'business' name would require the filing of a fictitious
business name because it does not contain an individual's
first and last name."
"Filing for a fictitious business names is a very detailed
[and] cumbersome process. Additionally, the rules regarding
fictitious business names differ depending on the structure of
the business. Current law only permits an employing Broker to
own a fictitious business name, which may be used by their
salespersons. Those licensees wishing to use a fictitious
business name must first register the name with the County
that hosts their broker's main office and then submit the
approved name to CalBRE for their review."
"The CalBRE Spring 2013 Real Estate Bulletin suggests an even
stricter standard for what constitutes a fictitious business
name then previously required. According to CalBRE ?
salespersons and brokers must obtain a fictitious business
name if the licensee is using the terms 'team,' 'associates,'
'group' or any other term that would imply the existence of a
team. CalBRE also contends ? that team names [which] include
a salesperson(s) first and last name(s) or just last name(s)
combined with the previously stated terms are fictitious
business names."
3)Fictitious business names . A fictitious business name is any
name under which an individual transacts business in this
state, other than his or her legal name. The use of a
fictitious business name requires filing a fictitious business
statement 'doing business as' (DBA) with the county clerk's
office where the business is located. The fee for filing a
fictitious business name statement is ten dollars for the
first fictitious business name and owner, and two dollars for
each additional fictitious business name or owner filed on the
same statement.
The fictitious business statement is intended to provide the
public with a means to learn the identities of individuals
doing business under the fictitious name in case a consumer
needs to contact the owners of a business to seek help with a
problem, or to report owners or licensees to the authorities.
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This bill is intended to loosen the requirements for when an
advertised business name is 'fictitious' and thereby reduce
the filing requirements, on the theory that the criteria
provided by this bill (first and last names, license numbers,
names of employing broker, etc.) should give consumers enough
information to identify responsible individuals if there is a
problem or complaint.
4)Arguments in support . The California Association of Realtors
writes in support, "The lack of clear regulation creates
confusion throughout the real estate industry on what is and
what is not a fictitious business name. AB 2018 will resolve
this ambiguity by statutorily establishing standards and
practices by which 'team' names can be used lawfully. AB 2018
will not only make compliance easier, but create more
transparency within the industry."
5)Related legislation . AB 2540 (Dababneh) of 2014, requires
real estate brokers and salespersons to supply a valid email
address as part of their examination and licensure
applications, and requires licensees to inform the Real Estate
Commissioner of the licensee's current office or mailing
address, telephone number, and email address, as well as any
change to that information no later than thirty days after
making the change. This bill is in assembly appropriations.
6)Previous legislation . AB 1325 (Lara), Chapter 368, Statutes
of 2012, required a person transacting business in the state
under a fictitious name, as defined, to file, with the county
clerk of the county where the business is located, a statement
including specified information and to declare that the
information is true and correct.
AB 1670 (Mendoza), Chapter 716, Statutes of 2007, revised the
conditions under which a new fictitious business name must be
filed, and would revise the content of a fictitious business
form statement.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Relators
AB 2018
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Opposition
None on file.
Analysis Prepared by : Girard Kelly / B.,P. & C.P. / (916)
319-3301