BILL NUMBER: SB 1196 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 20, 2016
AMENDED IN SENATE APRIL 12, 2016
INTRODUCED BY Senator Hill
( Principal coauthors:
Assembly Members Brough and Salas )
FEBRUARY 18, 2016
An act to amend Sections 10050, 10177, 11301, 11320, 11328,
and 11340 of the Business and Professions Code, relating to
real estate.
LEGISLATIVE COUNSEL'S DIGEST
SB 1196, as amended, Hill. Bureau of Real Estate: Bureau of Real
Estate Appraisers.
Existing law, the Real Estate Law, provides for the licensure and
regulation of real estate brokers and real estate salespersons by the
Real Estate Commissioner, the chief officer of the Bureau of Real
Estate within the Department of Consumer Affairs. That law authorizes
the commissioner to suspend or revoke the license of a real estate
licensee if the licensee has entered a plea of guilty or nolo
contendere 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, or other conditions are met.
Existing law, the Real Estate Appraisers' Licensing and
Certification Law, provides for the licensure, certification, and
regulation of real estate appraisers and appraisal management
companies by the Bureau of Real Estate Appraisers within the
Department of Consumer Affairs, which is headed by the Chief of the
Bureau of Real Estate Appraisers. That law requires the chief to
adopt regulations governing the process and the procedure of applying
for a real estate appraiser's license and requires these regulations
to include, among others, necessary experience or
education. education and the submittal of an applicant'
s social security number. To substantiate appraisal experience or to
facilitate investigations, existing law requires that licensees,
applicants, and persons acting in a capacity that requires a license
to submit copies of appraisals or any other work product, as
specified, and all supporting documentation.
A willful violation of these laws is a crime.
This bill would subject the Bureau of Real Estate and the Bureau
of Real Estate Appraisers to review by the appropriate policy
committees of the Legislature, as specified. The bill would further
authorize the Real Estate Commissioner to suspend the license of a
real estate licensee upon the entry of a guilty plea by the licensee
to any of the crimes described above and would require the
commissioner to rescind the suspension if the plea is withdrawn. The
bill would further require the Chief of the Bureau of Real Estate
Appraisers to require, as part of the educational requirements for
applicants for licensure, the completion of a course on state and
federal laws regulating the appraisal profession, as
specified. specified, and would additionally authorize
the submittal of an applicant's individual taxpayer identification
number. The bill would additionally require those licensees,
applicants, and persons acting in a capacity that requires a license
to submit copies of engagement letters. Because the willful failure
to submit those engagement letters would be a crime, the
bill would impose a state-mandated local program.
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: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10050 of the Business and Professions Code is
amended to read:
10050. (a) (1) There is in the Department of Consumer Affairs a
Bureau of Real Estate, the chief officer of which bureau is named the
Real Estate Commissioner.
(2) Notwithstanding any other law, the powers and duties of the
bureau, as set forth in this part and Chapter 1 (commencing with
Section 11000) of Part 2, shall be subject to review by the
appropriate policy committees of the Legislature. The review shall be
performed as if this part and that chapter were scheduled to be
repealed as of January 1, 2021.
(b) It shall be the principal responsibility of the commissioner
to enforce all laws in this part and Chapter 1 (commencing with
Section 11000) of Part 2 in a manner that achieves the maximum
protection for the purchasers of real property and those persons
dealing with real estate licensees.
(c) Wherever the term "commissioner" is used in this division, it
means the Real Estate Commissioner.
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) (1) Entered a plea of guilty or nolo contendere 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.
(2) Notwithstanding paragraph (1), and with the recognition that
sentencing may not occur for months or years following the entry of a
guilty plea, the commissioner may suspend the license of a real
estate licensee upon the entry by the licensee of a guilty plea to
any of the crimes described in paragraph (1). If the guilty plea is
withdrawn, the suspension shall be rescinded and the license
reinstated to its status prior to the suspension. The bureau shall
notify a person whose license is subject to suspension pursuant to
this paragraph of his or her right to elect to have the issue of the
suspension heard in accordance with Section 10100.
(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 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, 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.
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.
SEC. 3. Section 11301 of the Business and Professions Code is
amended to read:
11301. (a) (1) There is hereby created within the Department of
Consumer Affairs a Bureau of Real Estate Appraisers to administer and
enforce this part.
(2) Notwithstanding any other law, the powers and duties of the
bureau, as set forth in this part, shall be subject to review by the
appropriate policy committees of the Legislature. The review shall be
performed as if this part were scheduled to be repealed as of
January 1, 2021.
(b) Whenever the term "Office of Real Estate Appraisers" appears
in any other law, it means the "Bureau of Real Estate Appraisers."
SEC. 4. Section 11320 of the Business
and Professions Code is amended to read:
11320. No person shall engage in federally related real estate
appraisal activity governed by this part or assume or use the title
of or any title designation or abbreviation as a licensed appraiser
in this state without first obtaining a an
active license as defined in Section 11302. Any person who
willfully violates this provision is guilty of a public offense
punishable by imprisonment pursuant to subdivision (h) of Section
1170 of the Penal Code, or in a county jail for not more than one
year, or by a fine not exceeding ten thousand dollars ($10,000), or
by both the imprisonment and fine. The possession of a license issued
pursuant to this part does not preempt the application of other
statutes including the requirement for specialized training or
licensure pursuant to Article 3 (commencing with Section 750) of
Chapter 2.5 of Division 1 of the Public Resources Code.
SEC. 5. Section 11328 of the Business
and Professions Code is amended to read:
11328. To substantiate documentation of appraisal experience, or
to facilitate the investigation of illegal or unethical activities by
a licensee, applicant, or other person acting in a capacity that
requires a license, that licensee, applicant, or person shall, upon
the request of the director, submit copies of the engagement
letters, appraisals, or any work product which is addressed by
the Uniform Standards of Professional Appraisal Practice, and all
supporting documentation and data to the office. This material shall
be confidential in accordance with the confidentiality provisions of
the Uniform Standards of Professional Appraisal Practice.
SEC. 4. SEC. 6. Section 11340 of the
Business and Professions Code is amended to read:
11340. The director shall adopt regulations governing the process
and the procedure of applying for a license which shall include, but
not be limited to, necessary experience or education, equivalency,
and minimum requirements of the Appraisal Foundation, if any.
(a) For purposes of the educational background requirements
established under this section, the director shall do both of the
following:
(1) Grant credits for any courses taken on real estate appraisal
ethics or practices pursuant to Section 10153.2, or which are deemed
by the director to meet standards established pursuant to this part
and federal law.
(2) Require the completion of a course on state and federal laws
regulating the appraisal profession, as approved by the bureau every
two years. The course shall include an examination that requires an
applicant to demonstrate the applicant's knowledge of those laws.
(b) For the purpose of implementing and applying this section, the
director shall prescribe by regulation "equivalent courses" and
"equivalent experience." The experience of employees of an assessor's
office or of the State Board of Equalization in setting forth
opinions of value of real property for tax purposes shall be deemed
equivalent to experience in federally related real estate appraisal
activity. Notwithstanding any other law, a holder of a valid real
estate broker license shall be deemed to have completed appraisal
license application experience requirements upon proof that he or she
has accumulated 1,000 hours of experience in the valuation of real
property.
(c) The director shall adopt regulations for licensure which shall
meet, at a minimum, the requirements and standards established by
the Appraisal Foundation and the federal financial institutions
regulatory agencies acting pursuant to Section 1112 of the Financial
Institutions Reform Recovery and Enforcement Act of 1989,
Public 1989 (FIRREA) (Public Law 101-73
(FIRREA). 101-73). The director shall, by
regulation, require the application for a real estate appraiser
license to include the applicant's social security number.
number or individual taxpayer identification number.
(d) In evaluating the experience of any applicant for a license,
regardless of the number of hours required of that applicant, the
director shall apply the same standards to the experience of all
applicants.
(e) No license shall be issued to an applicant who is less than 18
years of age.
SEC. 7. 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.