Bill Text: CA AB685 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Real Estate Law.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2016-08-25 - Chaptered by Secretary of State - Chapter 177, Statutes of 2016. [AB685 Detail]

Download: California-2015-AB685-Introduced.html

---

BILL NUMBER: AB 685	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Irwin

                        FEBRUARY 25, 2015

   An act to amend Sections 10080.9, 10177, and 10186.2 of the
Business and Professions Code, relating to real estate licensees.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 685, as introduced, Irwin. Real estate: licensees.
   Under existing law, if the Real Estate Commissioner has cause to
believe that a person who does not have a real estate license is
engaged in activities for which a license is required, he or she may
issue a citation to that person which may include an administrative
fine. Existing law prohibits the commissioner from renewing the
license of a person who has failed to comply with the terms of a
citation or to pay an outstanding fine.
   This bill would also prohibit the commissioner from issuing a
license to a person who has failed to comply with the terms of a
citation or to pay an outstanding fine.
   Existing law authorizes the commissioner to suspend or revoke the
license of a real estate licensee if he or she has engaged in
specified activities or has had a license issued by another agency,
another state, or the federal government revoked or suspended for
engaging in those activities, if specified conditions are met.
   This bill would also authorize the commissioner to suspend or
revoke the license of a real estate licensee who surrendered a
licensed issued by another agency, another state, or the federal
government. The bill would also authorize the commissioner to suspend
or revoke the license of a licensee for failure to surrender a
license that was issued in error or by mistake.
   Existing law requires real estate licensees to report the bringing
of an indictment or information charging a felony against the
licensee. A willful or knowing violation of this requirement is
punishable by a fine and imprisonment.
   This bill would also require a licensee to report the filing of an
criminal complaint charging a felony against the licensee to the
Bureau of Real Estate. Because the bill would change the definition
of a crime, it would impose a state-mandated local program.
   The bill would also make other nonsubstantive changes.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10080.9 of the Business and Professions Code is
amended to read:
   10080.9.  (a) If, upon inspection, examination, or investigation,
the commissioner has cause to believe that a person who does not
possess a real estate license is engaged or has engaged in activities
for which a real estate license is required, or that a person who
does not possess a prepaid rental listing service license or a real
estate broker license is engaged or has engaged in activities for
which a license is required pursuant to Section 10167.2, or that a
licensee is violating or has violated any provision of this division
or any rule or order thereunder, the commissioner or his or her
designated representative may issue a citation to that person in
writing, describing with particularity the basis of the citation.
Each citation may contain an order to correct the violation or
violations identified and a reasonable time period or periods by
which the violation or violations must be corrected. In addition,
each citation may assess an administrative fine not to exceed two
thousand five hundred dollars ($2,500),  which  
that  shall be deposited into the Recovery Account of the Real
Estate Fund and shall, upon appropriation by the Legislature, be
available for expenditure for the purposes specified in Chapter 6.5
(commencing with Section 10470). In assessing a fine, the
commissioner shall give due consideration to the appropriateness of
the amount of the fine with respect to factors such as the gravity of
the violation, the good faith of the person cited, and the history
of previous violations. A citation issued and a fine assessed
pursuant to this section, while constituting discipline for a
violation of the law, shall be in lieu of other administrative
discipline by the commissioner for the offense or offenses cited, and
the citation against and payment of any fine by a licensee shall not
be reported as disciplinary action taken by the commissioner.
   (b) Notwithstanding subdivision (a), nothing in this section shall
prevent the commissioner from issuing an order to desist and refrain
from engaging in a specific business activity or activities or an
order to suspend all business operations to a person who is engaged
in or has engaged in continued or repeated violations of this part.
In any of these circumstances, the sanctions authorized under this
section shall be separate from, and in addition to, all other
administrative, civil, or criminal penalties.
   (c) If, within 30 days from the receipt of the citation or the
citation and fine, the person cited fails to notify the commissioner
that he or she intends to request a hearing as described in
subdivision (d), the citation or the citation and fine shall be
deemed final.
   (d) Any hearing under this section shall be conducted in
accordance with Chapter 5 (commencing with Section 11500) of Part 1
of Division 3 of Title 2 of the Government Code.
   (e) After the exhaustion of the review procedures provided for in
this section, the commissioner may apply to the appropriate superior
court for a judgment in the amount of any administrative penalty
imposed pursuant to subdivision (a) and an order compelling the
 cited person   person cited  to comply
with the order of the commissioner. The application, which shall
include a certified copy of the final order of the commissioner,
shall constitute a sufficient showing to warrant  the
issuance of   issuing  the judgment and order.
   (f) Failure of any person to comply with the terms of a citation
or pay a fine assessed pursuant to this section, within a reasonable
period specified by the commissioner, shall subject that person to
disciplinary action by the commissioner. In no event may a license be
 issued or  renewed if an unpaid fine remains outstanding
or the terms of a citation have not been complied with.
  SEC. 2.  Section 10177 of the Business and Professions Code is
amended to read:
   10177.  The commissioner may suspend or revoke the license of a
real estate licensee, delay the renewal of a license of a real estate
licensee, or deny the issuance of a license to an applicant, who has
done any of the following, or may suspend or revoke the license of a
corporation, delay the renewal of a license of a corporation, or
deny the issuance of a license to a corporation, if an officer,
director, or person owning or controlling 10 percent or more of the
corporation's stock has done any of the following:
   (a) Procured, or attempted to procure, a real estate license or
license renewal, for himself or herself or a salesperson, by fraud,
misrepresentation, or deceit, or by making a material misstatement of
fact in an application for a real estate license, license renewal,
or reinstatement.
   (b) Entered a plea of guilty or  nolo contendere 
 no contest  to, or been found guilty of, or been convicted
of, a felony, or a crime substantially related to the
qualifications, functions, or duties of a real estate licensee, and
the time for appeal has elapsed or the judgment of conviction has
been affirmed on appeal, irrespective of an order granting probation
following that conviction, suspending the imposition of sentence, or
of a subsequent order under Section 1203.4 of the Penal Code allowing
that licensee to withdraw his or her plea of guilty and to enter a
plea of not guilty, or dismissing the accusation or information.
   (c) Knowingly authorized, directed, connived at, or aided in the
publication, advertisement, distribution, or circulation of a
material false statement or representation concerning his or her
designation or certification of special education, credential, trade
organization membership, or business, or concerning a business
opportunity or a land or subdivision, as defined in Chapter 1
(commencing with Section 11000) of Part 2, offered for sale.
   (d) Willfully disregarded or violated the Real Estate Law (Part 1
(commencing with Section 10000)) or Chapter 1 (commencing with
Section 11000) of Part 2 or the rules and regulations of the
commissioner for the administration and enforcement of the Real
Estate Law and Chapter 1 (commencing with Section 11000) of Part 2.
   (e) Willfully used the term "realtor" or a trade name or insignia
of membership in a real estate organization of which the licensee is
not a member.
   (f) Acted or conducted himself or herself in a manner that would
have warranted the denial of his or her application for a real estate
license, or either had a license denied or had a license issued by
another agency of this state, another state, or the federal
government  revoked   revoked, surrendered,
 or suspended for acts that, if done by a real estate licensee,
would be grounds for the suspension or revocation of a California
real estate license, if the action of denial, revocation, 
surrender, or suspension by the other agency or entity was taken
only after giving the licensee or applicant fair notice of the
charges, an opportunity for a hearing, and other due process
protections comparable to the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340), Chapter 4 (commencing with
Section 11370), and Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code), and only upon an
express finding of a violation of law by the agency or entity.
   (g) Demonstrated negligence or incompetence in performing an act
for which he or she is required to hold a license.
   (h) As a broker licensee, failed to exercise reasonable
supervision over the activities of his or her salespersons, or, as
the officer designated by a corporate broker licensee, failed to
exercise reasonable supervision and control of the activities of the
corporation for which a real estate license is required.
   (i) Used his or her employment by a governmental agency in a
capacity giving access to records, other than public records, in a
manner that violates the confidential nature of the records.
   (j) Engaged in any other conduct, whether of the same or a
different character than specified in this section, that constitutes
fraud or dishonest dealing.
   (k) Violated any of the terms, conditions, restrictions, and
limitations contained in an order granting a restricted license.
   (l) (1) Solicited or induced the sale, lease, or listing for sale
or lease of residential property on the ground, wholly or in part, of
loss of value, increase in crime, or decline of the quality of the
schools due to the present or prospective entry into the neighborhood
of a person or persons having a characteristic listed in subdivision
(a) or (d) of Section 12955 of the Government Code, as those
characteristics are defined in Sections 12926 and 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section
12955, and Section 12955.2 of the Government Code.
   (2) Notwithstanding paragraph (1), with respect to familial
status, paragraph (1) shall not be construed to apply to housing for
older persons, as defined in Section 12955.9 of the Government Code.
With respect to familial status, nothing in paragraph (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 4760 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government
Code shall apply to paragraph (1).
   (m) Violated the Franchise Investment Law (Division 5 (commencing
with Section 31000) of Title 4 of the Corporations Code) or
regulations of the Commissioner of Corporations pertaining thereto.
   (n) Violated the Corporate Securities Law of 1968 (Division 1
(commencing with Section 25000) of Title 4 of the Corporations Code)
or the regulations of the Commissioner of Corporations pertaining
thereto.
   (o) Failed to disclose to the buyer of real property, in a
transaction in which the licensee is an agent for the buyer, the
nature and extent of a licensee's direct or indirect ownership
interest in that real property. The direct or indirect ownership
interest in the property by a person related to the licensee by blood
or marriage, by an entity in which the licensee has an ownership
interest, or by any other person with whom the licensee has a special
relationship shall be disclosed to the buyer.
   (p) Violated Article 6 (commencing with Section 10237).
   (q) Violated or failed to comply with Chapter 2 (commencing with
Section 2920) of Title 14 of Part 4 of Division 3 of the Civil Code,
related to mortgages. 
   (r) Failure to surrender a license that was issued in error or by
mistake. 
   If a real estate broker that is a corporation has not done any of
the foregoing acts, either directly or through its employees, agents,
officers, directors, or persons owning or controlling 10 percent or
more of the corporation's stock, the commissioner may not deny the
issuance or delay the renewal of a real estate license to, or suspend
or revoke the real estate license of, the corporation, provided that
any offending officer, director, or stockholder, who has done any of
the foregoing acts individually and not on behalf of the
corporation, has been completely disassociated from any affiliation
or ownership in the corporation. A decision by the commissioner to
delay the renewal of a real estate license shall toll the expiration
of that license until the results of any pending disciplinary actions
against that licensee are final, or until the licensee voluntarily
surrenders his, her, or its license, whichever is earlier. 
   This section shall become operative on July 1, 2012. 
  SEC. 3.  Section 10186.2 of the Business and Professions Code is
amended to read:
   10186.2.  (a) (1) A licensee shall report any of the following to
the  department:   bureau: 
   (A) The bringing of an indictment or  information
  information, or the filing of a criminal complaint,
 charging a felony against the licensee.
   (B) The conviction of the licensee, including any verdict of
guilty, or plea of guilty or no contest, of any felony or
misdemeanor.
   (C) Any disciplinary action taken by another licensing entity or
authority of this state or of another state or an agency of the
federal government.
   (2) The report required by this subdivision shall be made in
writing within 30 days of the date of the bringing of the indictment
or the charging of a felony, the conviction, or the disciplinary
action.
   (b) Failure to make a report required by this section shall
constitute a cause for discipline.
  SEC. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.