BILL ANALYSIS �
AB 2018
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2018 (Bocanegra)
As Amended August 12, 2014
Majority vote
----------------------------------------------------------------------
|ASSEMBLY: |75-0 |(May 8, 2014) |SENATE: |33-0 |(August 14, 2014) |
----------------------------------------------------------------------
-----------------------------------------------------------------------
|COMMITTEE VOTE: |14-0 |(August 20, 2014) |RECOMMENDATION: |concur |
|(B., P. & C.P.) | | | | |
-----------------------------------------------------------------------
Original Committee Reference: B., P. & C.P.
SUMMARY : Revises the requirements for the use of "fictitious
business names" by real estate licensees, and authorizes the use of
"team names" subject to specified requirements.
The Senate amendments largely delete the Assembly version of this
bill, and instead:
1)Authorize a responsible broker to permit, by contract, a
salesperson to:
a) File an application with a county clerk on behalf of the
broker to obtain a fictitious business name;
b) Deliver to the California Bureau of Real Estate (BRE) an
application, signed by the responsible broker, requesting
BRE's approval to use a county-approved fictitious business
name that shall be identified with the broker's license
number;
AB 2018
Page 2
c) Pay any related application fees to a county or BRE; and
d) Maintain ownership of a fictitious business name that may
be used subject to the control of a responsible broker.
1)Require a salesperson using a fictitious business name to use
that name only as permitted by his or her responsible broker.
2)Clarify that nothing in this bill changes a real estate broker's
duty to supervise a salesperson.
3)Authorize a person applying to a county for a fictitious business
name to file his or her application in the county or counties
where the fictitious business name will be used.
4)Require marketing and solicitation materials, including business
cards, print or electronic media and "for sale" signage, using a
fictitious business name to include the responsible broker's
identity in a manner equally as prominent as the fictitious
business name.
5)Require advertising, including print or electronic media and "for
sale" signage, containing a fictitious business name to include
the salesperson's name and license number.
6)Declare that a violation of these provisions is not a
misdemeanor.
7)Impose the following requirements on the use of a "team name":
a) Advertising that contains a team name, including print or
electronic media and "for sale" signage, shall include the
licensee's name and license number and be displayed in a
conspicuous manner;
b) The responsible broker's identity shall be displayed as
prominently and conspicuously as the team name in all
advertising;
AB 2018
Page 3
c) The advertising material shall not contain terms that imply
the existence of a real estate entity independent of the
responsible broker; and
d) A violation of these provisions is not a misdemeanor, and
shall be enforced as specified.
8)Define "broker identity" to mean "the name under which the broker
operates or conducts business and may include a sole
proprietorship or business entity name."
9)Define "fictitious business name" to mean "a professional
identity or brand name under which activity requiring a real
estate license is conducted and the use of which is subject to
approval by the bureau pursuant to [Business and Professions
Code] Section 10159.5."
10)Define "team name" to mean "a professional identity or brand
name used by a salesperson, and one or more other real estate
licensees, for the provision of real estate licensed services.
Notwithstanding any other law, the use of a team name does not
require that a separate license be issued for that name pursuant
to [Business and Professions Code] Section 10159.5. A team name
does not constitute a fictitious business name for purposes of
this part if all of the following apply:
a) The name is used by two or more real estate licensees who
work together to provide licensed real estate services, or who
represent themselves to the public as being a part of a team,
group, or association to provide those services.
b) The name includes the surname of at least one of the
licensee members of the team, group, or association in
conjunction with the term 'associates,' 'group,' or 'team.'
c) The name does not include any term or terms, such as 'real
estate broker' 'real estate brokerage,' 'broker,' or
'brokerage' or any other term that would lead a member of the
public to believe that the team is offering real estate
brokerage services, that imply or suggest the existence of a
real estate entity independent of a responsible broker."
11)Define the terms "ownership of a fictitious business name" and
"responsible broker."
AB 2018
Page 4
12)Make other technical or clarifying changes.
FISCAL EFFECT : According to the Senate Appropriations Committee,
pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
1)Purpose of the bill. This bill is intended to facilitate the use
of "team names" advertised in a real estate context while
specifying when a team name is not formally a "fictitious
business name" with all the additional requirements that would
normally apply. By clarifying the distinction between a team
name and a fictitious business name, the author aims to make it
easier for real estate brokers to use team names and thereby
avoid the full regulatory burden of formally creating a
fictitious business name. 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.
"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
AB 2018
Page 5
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.
4)Substantial amendments. This bill was substantially amended in
the Senate and the Assembly-approved version of this bill was
largely deleted, although the topic remained the same. The
provisions of this bill, as amended in the Senate, have not been
heard in an Assembly policy committee.
Analysis Prepared by : Hank Dempsey / B., P. & C.P. / (916)
319-3301
FN: 0005168