BILL ANALYSIS �
AB 2018
Page 1
ASSEMBLY THIRD READING
AB 2018 (Bocanegra)
As Amended April 21, 2014
Majority vote
BUSINESS & PROFESSIONS 14-0
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|Ayes:|Bonilla, Jones, |
| |Bocanegra, Campos, |
| |Dickinson, Eggman, |
| |Gordon, Hagman, Holden, |
| |Maienschein, Mullin, |
| |Skinner, Ting, Wilk |
| | |
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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
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licensees.
EXISTING LAW :
1)Establishes the CalBRE, which is headed by the Real Estate
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 Section 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 Section
10140.6.)
FISCAL EFFECT : None. This bill is keyed non-fiscal by the
Legislative Counsel.
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
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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.
"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."
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' with the county clerk's office
where the business is located. The fee for filing a
fictitious business name statement is $10 for the first
fictitious business name and owner, and $2 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.
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.
Analysis Prepared by : Hank Dempsey / B., P. & C.P. / (916)
319-3301
AB 2018
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FN: 0003323