Bill Text: CA SB1174 | 2017-2018 | Regular Session | Introduced

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

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Bill Title: Commercial real estate: disclosures.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2018-04-19 - April 18 set for first hearing. Failed passage in committee. (Ayes 2. Noes 0. Page 4745.) [SB1174 Detail]

Download: California-2017-SB1174-Introduced.html

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CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 1174

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Introduced by Senator Stone

February 14, 2018

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An act to add Section 10131.8 to the Business and Professions Code, relating to real estate.

LEGISLATIVE COUNSEL'S DIGEST

SB 1174, as introduced, Stone. Commercial real estate: certified underwriting on a commercial real estate transaction.

The Real Estate Law provides for the licensure and regulation of real estate brokers by the Real Estate Commissioner and makes a willful violation of that law a crime. Existing law requires the commissioner to enforce all provisions of that law and authorizes the commissioner to adopt, amend, or repeal rules and regulations that are reasonably necessary for the enforcement of that law.

This bill would require a real estate broker who offers underwriting on a commercial real estate transaction to his or her client to offer either a certified underwriting of the commercial real estate transaction or an uncertified underwriting of the commercial real estate transaction. The bill would define “underwriting on a commercial real estate transaction” for these purposes as any type of analysis provided by the real estate broker to his or her client regarding the client’s potential investment in the commercial real estate at issue in the transaction, regardless of whether the commercial real estate transaction is being secured by a loan. The bill would require a real estate broker that offers a certified underwriting of a commercial real estate transaction to verify the accuracy, to the best of his or her ability, of all information and conclusions given to the real estate broker’s client regarding the commercial real estate transaction. The bill would authorize the client to file a cause of action against the real estate broker to recover his or her financial losses and would make the real estate broker liable for those losses if the real estate broker fails to verify the accuracy of the information given to the client in a certified underwriting of the commercial real estate transaction.

The bill would exempt a violation of this provision from being punished as a crime.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 10131.8 is added to the Business and Professions Code, to read:

10131.8.

 (a) A real estate broker that offers underwriting on a commercial real estate transaction to his or her client shall offer either of the following:

(1) A certified underwriting of the commercial real estate transaction.

(2) An uncertified underwriting of the commercial real estate transaction.

(b) A real estate broker that offers a client a certified underwriting of a commercial real estate transaction shall verify the accuracy, to the best of his or her ability, of all information and conclusions given to the real estate broker’s client regarding the commercial real estate transaction, including, but not limited to, taxes, maintenance costs, and any association fees or dues.

(c) If a real estate broker fails to verify the accuracy of the information given to the client pursuant to subdivision (b), the client may file a cause of action against the real estate broker to recover his or her financial losses and the real estate broker shall be liable for those losses.

(d) For purposes of this section, “underwriting on a commercial real estate transaction” means any type of analysis provided by the real estate broker to his or her client regarding the client’s potential investment in the commercial real estate at issue in the transaction, regardless of whether the commercial real estate transaction is being secured by a loan.

(e) The remedy offered under this section is in addition to any other remedy available under the law.

(f) A violation of this section shall not be punishable as a crime pursuant to Section 10185.