10130-10149
BUSINESS AND PROFESSIONS CODE
SECTION 10130-10149
10130. It is unlawful for any person to engage in the business, act
in the capacity of, advertise or assume to act as a real estate
broker or a real estate salesman within this state without first
obtaining a real estate license from the department.
The commissioner may prefer a complaint for violation of this
section before any court of competent jurisdiction, and the
commissioner and his counsel, deputies or assistants may assist in
presenting the law or facts at the trial.
It is the duty of the district attorney of each county in this
state to prosecute all violations of this section in their respective
counties in which the violations occur.
10131. A real estate broker within the meaning of this part is a
person who, for a compensation or in expectation of a compensation,
regardless of the form or time of payment, does or negotiates to do
one or more of the following acts for another or others:
(a) Sells or offers to sell, buys or offers to buy, solicits
prospective sellers or puchasers of, solicits or obtains listings of,
or negotiates the purchase, sale or exchange of real property or a
business opportunity.
(b) Leases or rents or offers to lease or rent, or places for
rent, or solicits listings of places for rent, or solicits for
prospective tenants, or negotiates the sale, purchase or exchanges of
leases on real property, or on a business opportunity, or collects
rents from real property, or improvements thereon, or from business
opportunities.
(c) Assists or offers to assist in filing an application for the
purchase or lease of, or in locating or entering upon, lands owned by
the state or federal government.
(d) Solicits borrowers or lenders for or negotiates loans or
collects payments or performs services for borrowers or lenders or
note owners in connection with loans secured directly or collaterally
by liens on real property or on a business opportunity.
(e) Sells or offers to sell, buys or offers to buy, or exchanges
or offers to exchange a real property sales contract, or a promissory
note secured directly or collaterally by a lien on real property or
on a business opportunity, and performs services for the holders
thereof.
10131.01. (a) Subdivision (b) of Section 10131 does not apply to
(1) the manager of a hotel, motel, auto and trailer park, to the
resident manager of an apartment building, apartment complex, or
court, or to the employees of that manager, or (2) any person or
entity, including a person employed by a real estate broker, who, on
behalf of another or others, solicits or arranges, or accepts
reservations or money, or both, for transient occupancies described
in paragraphs (1) and (2) of subdivision (b) of Section 1940 of the
Civil Code, in a dwelling unit in a common interest development, as
defined in Section 1351 of the Civil Code, in a dwelling unit in an
apartment building or complex, or in a single-family home, or (3) any
person other than the resident manager or employees of that manager,
performing the following functions who is the employee of the
property management firm retained to manage a residential apartment
building or complex or court and who is performing under the
supervision and control of a broker of record who is an employee of
that property management firm or a salesperson licensed to the broker
who meets certain minimum requirements as specified in a regulation
issued by the commissioner:
(A) Showing rental units and common areas to prospective tenants.
(B) Providing or accepting preprinted rental applications, or
responding to inquiries from a prospective tenant concerning the
completion of the application.
(C) Accepting deposits or fees for credit checks or administrative
costs and accepting security deposits and rents.
(D) Providing information about rental rates and other terms and
provisions of a lease or rental agreement, as set out in a schedule
provided by an employer.
(E) Accepting signed leases and rental agreements from prospective
tenants.
(b) A broker or salesperson shall exercise reasonable supervision
and control over the activities of nonlicensed persons acting under
paragraph (3) of subdivision (a).
(c) A broker employing nonlicensed persons to act under paragraph
(3) of subdivision (a) shall comply with Section 10163 for each
apartment building or complex or court where the nonlicensed persons
are employed.
10131.1. (a) A real estate broker within the meaning of this part
is also a person who engages as a principal in the business of making
loans or buying from, selling to, or exchanging with the public,
real property sales contracts or promissory notes secured directly or
collaterally by liens on real property, or who makes agreements with
the public for the collection of payments or for the performance of
services in connection with real property sales contracts or
promissory notes secured directly or collaterally by liens on real
property.
(b) As used in this section:
(1) "In the business" means any of the following:
(A) The acquisition for resale to the public, and not as an
investment, of eight or more real property sales contracts or
promissory notes secured directly or collaterally by liens on real
property during a calendar year.
(B) The sale to or exchange with the public of eight or more real
property sales contracts or promissory notes secured directly or
collaterally by liens on real property during a calendar year.
However, no transaction negotiated through a real estate licensee
shall be considered in determining whether a person is a real estate
broker within the meaning of this section.
(C) The making of eight or more loans in a calendar year from the
person's own funds to the public when those loans are held or resold
and are secured directly or collaterally by a lien on residential
real property consisting of a single dwelling unit in a condominium
or cooperative or on any parcel containing only residential buildings
if the total number of units on the parcel is four or less. However,
no transaction negotiated through a real estate broker who meets the
criteria of subdivision (a) or (b) of Section 10232 shall be
considered in determining whether a person is a real estate broker
within the meaning of this section.
(2) "Sale," "resale," and "exchange" include every disposition of
any interest in a real property sales contract or promissory note
secured directly or collaterally by a lien on real property, except
the original issuance of a promissory note by a borrower or a real
property sales contract by a vendor, either of which is to be secured
directly by a lien on real property owned by the borrower or vendor.
(3) "Own funds" means either of the following:
(A) Cash, corporate capital, or warehouse credit lines at
commercial banks, savings banks, savings and loan associations,
industrial loan companies, or other sources that are liability items
on the person's financial statements, whether secured or unsecured.
(B) Cash, corporate capital, or warehouse credit lines at
commercial banks, savings banks, savings and loan associations,
industrial loan companies, or other sources that are liability items
on the financial statement of an affiliate of the person, whether
secured or unsecured.
(4) "Own funds" does not include funds provided by a third party
to fund a loan on condition that the third party will subsequently
purchase or accept an assignment of the loan.
10131.2. A real estate broker within the meaning of this part is
also a person who engages in the business of claiming, demanding,
charging, receiving, collecting or contracting for the collection of
an advance fee in connection with any employment undertaken to
promote the sale or lease of real property or of a business
opportunity by advance fee listing, advertisement or other offering
to sell, lease, exchange or rent property or a business opportunity,
or to obtain a loan or loans thereon.
10131.3. A real estate broker within the meaning of this part is
also a person who, for another or others, for compensation or in
expectation of compensation, issues or sells, solicits prospective
sellers or purchasers of, solicits or obtains listings of, or
negotiates the purchase, sale, or exchange of securities as specified
in Section 25206 of the Corporations Code.
The provisions of this section do not apply to a broker-dealer or
agent of a broker-dealer licensed by the Commissioner of Corporations
under the provisions of the Corporate Securities Law of 1968.
10131.4. A real estate broker within the meaning of this part is
also a person who acts for another or others for compensation or in
expectation of compensation, to do one or more of the following acts:
(a) To sell or offer for sale, buy or offer to buy, solicit
prospective sellers or purchasers, solicit or obtain listings, or
negotiate the purchase, sale, or exchange of mineral, oil, or gas
property.
(b) To solicit borrowers or lenders for or negotiate loans on
mineral, oil, or gas property, or collect payments for lenders in
connection with these loans.
(c) To lease or offer to lease or negotiate the sale, purchase, or
exchange of leases on mineral, oil, or gas property.
(d) To rent or place for rent, mineral, oil, or gas property or to
collect rent or royalties from mineral, oil, or gas property or
improvements thereon.
(e) Other than as an officer or employee of the state or federal
government, to assist or offer to assist another or others in filing
an application for the purchase or lease of, or to locate or enter
upon mineral, oil, or gas property owned by the state or federal
government.
10131.45. A real estate broker within the meaning of this part is
also a person who engages in the following businesses as a principal:
(a) Except as provided in subdivision (d) of Section 10133.35,
buying or leasing, or taking an option on mineral, oil, or gas
property for the purpose of sale, exchange, lease, sublease, or
assignment of a lease of the property or any part of the property.
(b) Offering mining claims or any interest therein for sale or
assignment.
10131.5. A nonresident of California may become a real estate
broker by conforming to all of the provisions of this part.
10131.6. (a) Notwithstanding any other provision of law, a person
licensed as a real estate broker may sell or offer to sell, buy or
offer to buy, solicit prospective purchasers of, solicit or obtain
listings of, or negotiate the purchase, sale, or exchange of any
manufactured home or mobilehome only if the manufactured home or
mobilehome has been registered under Part 2 (commencing with Section
18000) of Division 13 of the Health and Safety Code.
(b) No real estate broker who engages in the activities authorized
by this section shall maintain any place of business where two or
more manufactured homes or mobilehomes are displayed and offered for
sale by the person, unless the broker is also licensed as a
mobilehome dealer as provided for by Part 2 (commencing with Section
18000) of Division 13 of the Health and Safety Code.
(c) As used in this chapter, "manufactured home" means a structure
as defined in Section 18007 of the Health and Safety Code, and
"mobilehome" means a structure as defined in Section 18008 of the
Health and Safety Code. "Manufactured home" and "Mobilehome" do not
include a recreational vehicle, as defined in Section 18010 of the
Health and Safety Code, a commercial modular, as defined in Section
18001.8 of the Health and Safety Code, or factory-built housing, as
defined in Section 19971 of the Health and Safety Code.
(d) In order to carry out this section, the commissioner shall
prescribe by regulation, after consultation with the Department of
Housing and Community Development, methods and procedures to assure
compliance with requirements of the Health and Safety Code pertaining
to manufactured home and mobilehome registration, collection of
sales and use taxes, and transaction documentation.
(e) Nothing in this section increases or decreases, or in any way
preempts, consumer notice requirements of the National Manufactured
Housing Construction and Safety Standards Act of 1974 and related
regulations which are set forth in Sections 5414 and 5422 of Title 42
of the United States Code and Subparts E and I of Title 24 of the
Code of Federal Regulations.
10131.7. It is unlawful for any real estate licensee acting under
authority of Section 10131.6 to do any of the following:
(a) To advertise or offer for sale in any manner any manufactured
home or mobilehome, unless it is either in place on a lot rented or
leased for human habitation within an established mobilehome park as
defined in Section 18214 of the Health and Safety Code and the
advertising or offering for sale is not contrary to any terms of a
contract between the seller of the manufactured home or mobilehome
and the owner of the mobilehome park, or is otherwise located,
pursuant to a local zoning ordinance or permit, on a lot where its
presence has been authorized or its continued presence and that use
would be authorized for a total and uninterrupted period of at least
one year.
(b) To fail to withdraw any advertisement of a manufactured home
or mobilehome for sale, lease, or exchange within 48 hours after the
real estate licensee's receipt of notice that the manufactured home
or mobilehome is no longer available for sale, lease, or exchange.
(c) To advertise or represent a mobilehome as a new mobilehome or
a manufactured home as a new manufactured home.
(d) To include as an added cost to the selling price of a
mobilehome, an amount for licensing, as prescribed by Section 10751
of the Revenue and Taxation Code, except where the buyer and seller
agree to the proration of the license fees for the applicable license
period, or transfer of title of the mobilehome as a vehicle, which
amount is not due to the state unless, prior to the sale, the amount
has been paid by the licensee to the state in order to avoid
penalties that would have accrued because of late payment of the
fees.
(e) To make any representation that a manufactured home or
mobilehome is capable of being transported on California highways if
the manufactured home or mobilehome does not meet all of the
equipment requirements applicable to manufactured homes or
mobilehomes of Division 12 (commencing with Section 24000) of the
Vehicle Code, or to fail to disclose any material fact respecting
those equipment requirements.
(f) To advertise or otherwise represent, or knowingly to allow to
be advertised or represented on the real estate licensee's behalf or
at the real estate licensee's place of business, that no downpayment
is required in connection with the sale of a manufactured home or
mobilehome when downpayment is in fact required and the buyer is
advised or induced to finance the downpayment by a loan in addition
to any other loan financing the remainder of the purchase price of
the manufactured home or mobilehome.
(g) To fail or neglect properly to cause the endorsement, dating,
and delivery (or fail to endorse, date, and deliver) of the
certificate of ownership or certificate of title of the manufactured
home or mobilehome, and, when having possession, to fail to deliver
the registration card to a transferee who is lawfully entitled to a
transfer of registration. Except when the certificate of ownership or
certificate of title is demanded in writing by a purchaser, the
licensee shall satisfy the delivery requirement of this subdivision
by submitting appropriate documents and fees to the Department of
Housing and Community Development for transfer of registration in
accordance with Chapter 8 (commencing with Section 18075) of Part 2
of Division 13 of the Health and Safety Code and rules and
regulations promulgated thereunder.
10132. A real estate salesman within the meaning of this part is a
natural person who, for a compensation or in expectation of a
compensation, is employed by a licensed real estate broker to do one
or more of the acts set forth in Sections 10131, 10131.1, 10131.2,
10131.3, 10131.4, and 10131.6.
10133. (a) The acts described in Section 10131 are not acts for
which a real estate license is required if performed by:
(1) A regular officer of a corporation or a general partner of a
partnership with respect to real property owned or leased by the
corporation or partnership, respectively, or in connection with the
proposed purchase or leasing of real property by the corporation or
partnership, respectively, if the acts are not performed by the
officer or partner in expectation of special compensation.
(2) A person holding a duly executed power of attorney from the
owner of the real property with respect to which the acts are
performed.
(3) An attorney at law in rendering legal services to a client.
(4) A receiver, trustee in bankruptcy or other person acting under
order of a court of competent jurisdiction.
(5) A trustee for the beneficiary of a deed of trust when selling
under authority of that deed of trust.
(b) The exemptions in subdivision (a) are not applicable to a
person who uses or attempts to use them for the purpose of evading
the provisions of this part.
10133.1. (a) Subdivisions (d) and (e) of Section 10131, Section
10131.1, Article 5 (commencing with Section 10230), and Article 7
(commencing with Section 10240) of this code and Section 1695.13 of
the Civil Code do not apply to any of the following:
(1) Any person or employee thereof doing business under any law of
this state, any other state, or the United States relating to banks,
trust companies, savings and loan associations, industrial loan
companies, pension trusts, credit unions, or insurance companies.
(2) Any nonprofit cooperative association organized under Chapter
1 (commencing with Section 54001) of Division 20 of the Food and
Agricultural Code, in loaning or advancing money in connection with
any activity mentioned therein.
(3) Any corporation, association, syndicate, joint stock company,
or partnership engaged exclusively in the business of marketing
agricultural, horticultural, viticultural, dairy, livestock, poultry,
or bee products on a cooperative nonprofit basis, in loaning or
advancing money to the members thereof or in connection with any
business of that type.
(4) Any corporation securing money or credit from any federal
intermediate credit bank organized and existing pursuant to the
provisions of an act of Congress entitled the "Agricultural Credits
Act of 1923," in loaning or advancing money or credit so secured.
(5) Any person licensed to practice law in this state, not
actively and principally engaged in the business of negotiating loans
secured by real property, when that person renders services in the
course of his or her practice as an attorney at law, and the
disbursements of that person, whether paid by the borrower or other
person, are not charges or costs and expenses regulated by or subject
to the limitations of Article 7 (commencing with Section 10240), and
the fees and disbursements are not shared, directly or indirectly,
with the person negotiating the loan or the lender.
(6) Any person licensed as a finance lender when acting under the
authority of that license.
(7) Any cemetery authority as defined by Section 7018 of the
Health and Safety Code, that is authorized to do business in this
state or its authorized agent.
(8) Any person authorized in writing by a savings institution to
act as an agent of that institution, as authorized by Section 6520 of
the Financial Code or comparable authority of the Office of Thrift
Supervision of the United States Department of the Treasury by its
regulations, when acting under the authority of that written
authorization.
(9) Any person who is licensed as a securities broker or
securities dealer under any law of this state, or of the United
States, or any employee, officer, or agent of that person, if that
person, employee, officer, or agent is acting within the scope of
authority granted by that license in connection with a transaction
involving the offer, sale, purchase, or exchange of a security
representing an ownership interest in a pool of promissory notes
secured directly or indirectly by liens on real property, which
transaction is subject to any law of this state or the United States
regulating the offer or sale of securities.
(10) Any person licensed as a residential mortgage lender or
servicer when acting under the authority of that license.
(11) Any organization that has been approved by the United States
Department of Housing and Urban Development pursuant to Section 106
(a)(1)(iii) of the federal Housing and Urban Development Act of 1968
(12 U.S.C. Sec. 1701x), to provide counseling services, or an
employee of such an organization, when those services are provided at
no cost to the borrower and are in connection with the modification
of the terms of a loan secured directly or collaterally by a lien on
residential real property containing four or fewer dwelling units.
(b) Persons described in paragraph (1), (2), or (3), as follows,
are exempt from the provisions of subdivisions (d) and (e) of Section
10131 or Section 10131.1 with respect to the collection of payments
or performance of services for lenders or on notes of owners in
connection with loans secured directly or collaterally by liens on
real property:
(1) The person makes collections on 10 or less of those loans, or
in amounts of forty thousand dollars ($40,000) or less, in any
calendar year.
(2) The person is a corporation licensed as an escrow agent under
Division 6 (commencing with Section 17000) of the Financial Code and
the payments are deposited and maintained in the escrow agent's trust
account.
(3) An employee of a real estate broker who is acting as the agent
of a person described in paragraph (4) of subdivision (b) of Section
10232.4.
For purposes of this subdivision, performance of services does not
include soliciting borrowers, lenders, or purchasers for, or
negotiating, loans secured directly or collaterally by a lien on real
property.
(c) (1) Subdivision (d) of Section 10131 does not apply to an
employee of a real estate broker who, on behalf of the broker,
assists the broker in meeting the broker's obligations to its
customers in residential mortgage loan transactions, as defined in
Section 50003 of the Financial Code, where the lender is an
institutional lender, as defined in Section 50003 of the Financial
Code, provided the employee does not participate in any negotiations
occurring between the principals.
(2) A broker shall exercise reasonable supervision and control
over the activities of nonlicensed employees acting under this
subdivision, and shall comply with Section 10163 for each location
where the nonlicensed persons are employed.
This section does not restrict the ability of the commissioner to
discipline a broker or corporate broker licensee or its designated
officer, or both the corporate broker licensee and its designated
officer, for misconduct of a nonlicensed employee acting under this
subdivision, or, pursuant to Section 10080, to adopt, amend, or
repeal rules or regulations governing the employment or supervision
of an employee who is a nonlicensed person as described in this
subdivision.
10133.15. The provisions of Article 5 (commencing with Section
10230) and Article 7 (commencing with Section 10240) do not apply to
any person whose business is that of acting as an authorized
representative, agent, or loan correspondent of any person or
employee thereof doing business under any law of this state, any
other state, or the United States relating to banks, trust companies,
savings and loan associations, industrial loan companies, pension
trusts, credit unions, or insurance companies or when making loans
qualified for sale to any of the foregoing insofar as that business
is concerned.
10133.2. The provisions of Sections 10131, 10131.1, 10131.2, and
10132 do not apply to any stenographer, bookkeeper, receptionist,
telephone operator, or other clerical help in carrying out their
functions as such.
10133.3. The provisions of Sections 10131 and 10131.2 relating to
business opportunities do not apply to any person, partnership,
corporation, or other legal entity which for another or others sells
or offers to sell, solicits prospective sellers or purchasers of,
solicits or obtains listings of, advertises for sale, buys or offers
to buy, or negotiates the purchase, sale, or exchange of radio,
television, or cable enterprises which are licensed and regulated by
the Federal Communications Commission, or any successor agency,
pursuant to the Communications Act of 1934, as amended and which
purchase, sale, or exchange is not in substance a transfer of real
property.
10133.35. A real estate broker's license shall not be required to
engage in any of the following activities with respect to a mineral,
oil, or gas property:
(a) To act as a depository under an oil lease, gas lease, or oil
and gas lease other than for purpose of sale.
(b) To engage in any transaction subject to an order of a court of
competent jurisdiction.
(c) To engage in the business of drilling for or producing oil or
gas or mining for or producing minerals.
(d) To negotiate leases or agreements between an owner of mineral,
oil, or gas lands, leases, or mineral rights, and a person organized
for or engaging in oil or gas or mineral or metal production, or to
enter into leases or agreements with an owner of mineral, oil, or gas
lands, leases, or mineral rights on behalf of a disclosed or
undisclosed person organized for or engaging in oil or gas or mineral
or metal production.
(e) To deal with mineral rights or land, other than oil or gas
rights or land, as the owner of the rights or land.
10133.4. (a) The provisions of subdivision (b) of Section 10131 do
not apply to persons acting in the capacity of a film location
representative in connection with a transaction which complies with
the requirements of subdivision (c).
(b) As used in this section:
(1) "Film location representative" means an employee of a
principal arranging for the use of real property for photographic
purposes.
(2) "Principal" means the person who will use the real property
for photographic purposes.
(c) In every transaction arranged by a film location
representative, the principal shall maintain liability insurance
insuring both that principal and the real property owner against
death, bodily injury, and property damage arising out of or in
connection with the use, ownership, or maintenance of the real
property which is the subject of the transaction. The amount of the
insurance coverage shall not be less than five hundred thousand
dollars ($500,000) per person or one million dollars ($1,000,000) per
occurrence for personal injury and five hundred thousand dollars
($500,000) for property damage. It must be issued by an insurance
carrier authorized to sell such insurance in California.
10133.5. The provisions of Article 5 (commencing with Section
10230) do not apply to any person who is an approved lender,
mortgagee, seller, or servicer for the Federal Housing
Administration, United States Department of Veterans Affairs, Farmers
Home Administration, Government National Mortgage Association,
Federal National Mortgage Association, or Federal Home Loan Mortgage
Corporation, when making loans to be sold to, or when servicing loans
on behalf of and subject to audit by, any of the foregoing with
respect to those loans.
10135. When a lease or leasing is referred to in this article, it
includes any lease, whether such lease is the sole transaction
involved, or the principal or an incidental part of the transaction
involved.
10136. No person engaged in the business or acting in the capacity
of a real estate broker or a real estate salesman within this State
shall bring or maintain any action in the courts of this State for
the collection of compensation for the performance of any of the acts
mentioned in this article without alleging and proving that he was a
duly licensed real estate broker or real estate salesman at the time
the alleged cause of action arose.
10137. It is unlawful for any licensed real estate broker to employ
or compensate, directly or indirectly, any person for performing any
of the acts within the scope of this chapter who is not a licensed
real estate broker, or a real estate salesperson licensed under the
broker employing or compensating him or her, or to employ or
compensate, directly or indirectly, any licensee for engaging in any
activity for which a mortgage loan originator license endorsement is
required, if that licensee does not hold a mortgage loan originator
license endorsement; provided, however, that a licensed real estate
broker may pay a commission to a broker of another state.
No real estate salesperson shall be employed by or accept
compensation from any person other than the broker under whom he or
she is at the time licensed.
It is unlawful for any licensed real estate salesperson to pay any
compensation for performing any of the acts within the scope of this
chapter to any real estate licensee except through the broker under
whom he or she is at the time licensed.
For a violation of any of the provisions of this section, the
commissioner may temporarily suspend or permanently revoke the
license of the real estate licensee, in accordance with the
provisions of this part relating to hearings.
10137.1. Nothing contained in this division shall preclude a
partnership from performing acts for which a real estate broker
license is required, provided every partner through whom the
partnership so acts is a licensed real estate broker.
10138. It is a misdemeanor, punishable by a fine of not exceeding
one hundred dollars ($100) for each offense, for any person, whether
obligor, escrowholder or otherwise, to pay or deliver to anyone a
compensation for performing any of the acts within the scope of this
chapter, who is not known to be or who does not present evidence to
such payor that he is a regularly licensed real estate broker at the
time such compensation is earned.
For a violation of any of the provisions of this section, the
commissioner may temporarily suspend or permanently revoke the
license of the real estate licensee in accordance with the provisions
of this part relating to hearings.
10139. Any person acting as a real estate broker, real estate
salesperson, or mortgage loan originator without a license or license
endorsement, or who advertises using words indicating that he or she
is a real estate broker, real estate salesperson, or mortgage loan
originator without being so licensed or without having obtained a
license endorsement, shall be guilty of a public offense punishable
by a fine not exceeding twenty thousand dollars ($20,000), or by
imprisonment in the county jail for a term not to exceed six months,
or by both fine and imprisonment; or if a corporation, be punished by
a fine not exceeding sixty thousand dollars ($60,000). If a Real
Estate Fraud Prosecution Trust Fund, as described in Section 27388 of
the Government Code, exists in the county where a person or
corporation is convicted, any fine collected from the person in
excess of ten thousand dollars ($10,000) or any fine collected from
the corporation in excess of fifty thousand dollars ($50,000) shall
be deposited in that Real Estate Fraud Prosecution Trust Fund.
10140. Every officer, agent or employee of any company, and every
other person who knowingly authorizes, directs or aids in the
publication, advertisement, distribution or circularization of any
false statement or representation concerning any land or subdivision
thereof, as defined in Chapter 1 (commencing at Section 11000) of
Part 2 of this division, offered for sale or lease, or, if the land
is owned by the State or Federal Government, which such person offers
to assist another or others to file an application for the purchase
or lease of, or to locate or enter upon, and every person who, with
knowledge that any advertisement, pamphlet, prospectus or letter
concerning any said land or subdivision, as defined in Chapter 1
(commencing at Section 11000) of Part 2 of this division, contains
any written statement that is false or fraudulent, issues,
circulates, publishes or distributes the same, or causes the same to
be issued, circulated, published or distributed, or who, in any other
respect, willfully violates or fails to comply with any of the
provisions of this section, or who in any other respect willfully
violates or fails, omits or neglects to obey, observe or comply with
any order, permit, decision, demand or requirement of the
commissioner under this section, is guilty of a public offense, and
shall be punished by a fine not exceeding one thousand dollars
($1,000), or by imprisonment in a county jail not exceeding one year,
or by both such fine and imprisonment, and, if a real estate
licensee, he shall be held to trial by the commissioner for a
suspension or revocation of his license, as provided in the
provisions of this part relating to hearings. The district attorney
of each county in this State shall prosecute all violations of the
provisions of this section in respective counties in which the
violations occur.
10140.5. Each advertisement or other statement which is published
by a real estate broker or salesman offering to assist persons to
file applications for the purchase or lease of, or to locate or enter
upon, lands owned by the State or Federal Government shall, when
published, indicate the name of the broker for whom it is published
and state that he is licensed as a real estate broker by the State of
California.
10140.6. (a) A real estate licensee shall not publish, circulate,
distribute, or cause to be published, circulated, or distributed in
any newspaper or periodical, or by mail, any matter pertaining to any
activity for which a real estate license is required that does not
contain a designation disclosing that he or she is performing acts
for which a real estate license is required.
(b) (1) A real estate licensee shall disclose his or her license
identification number and, if that licensee is a mortgage loan
originator, the unique identifier assigned to that licensee by the
Nationwide Mortgage Licensing System and Registry, on all
solicitation materials intended to be the first point of contact with
consumers and on real property purchase agreements when acting as an
agent in those transactions. The commissioner may adopt regulations
identifying the materials in which a licensee must disclose a license
identification number and, if that licensee is a mortgage loan
originator, the unique identifier assigned to that licensee by the
Nationwide Mortgage Licensing System and Registry.
(2) For purposes of this section, "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.
(3) Nothing in this section shall be construed to limit or change
the requirement described in Section 10236.4 as applicable to real
estate brokers.
(c) The provisions of this section shall not apply to classified
rental advertisements reciting the telephone number at the premises
of the property offered for rent or the address of the property
offered for rent.
(d) "Mortgage loan originator," "unique identifier," and
"Nationwide Mortgage Licensing System and Registry" have the meanings
set forth in Section 10166.01.
10141. Within one month after the closing of a transaction in which
title to real property or in the sale of a business when real or
personal property is conveyed from a seller to a purchaser through a
licensed real estate broker, such broker shall inform or cause the
information to be given to the seller and purchaser in writing of the
selling price thereof and in event an exchange of real property or a
business opportunity is involved, such information shall include a
description of said property and amount of added money consideration,
if any. If the transaction is closed through escrow and the escrow
holder renders a closing statement which reveals such information,
that shall be deemed compliance with this section on the part of the
broker.
10141.5. Within one week after the closing of a transaction
negotiated by a real estate broker in which title to real property is
conveyed from a seller to a purchaser and a deed of trust secured by
real property is executed, such broker shall cause such deed of
trust to be recorded with the county recorder of the county in which
the real property is located, or cause it to be delivered to the
beneficiary with a written recommendation that it be recorded
forthwith, unless written instructions not to record are received
from the beneficiary. If the transaction is closed through escrow and
the deed of trust is delivered to the escrow holder within the time
prescribed by this section, that shall be deemed compliance with this
section on the part of the broker. Nothing in this section shall
affect the validity of a transfer of title to real property.
10142. When a licensee prepares or has prepared an agreement
authorizing or employing such licensee to perform any of the acts for
which he is required to hold a license, or when such licensee
secures the signature of any person to any contract pertaining to
such services or transaction, he shall deliver a copy of the
agreement to the person signing it at the time the signature is
obtained.
10143.5. Any real estate broker who assists another or others, or
whose real estate salesmen assist another or others, for a
compensation, in filing an application for the purchase or lease of,
or in locating or entering upon, lands owned by the State or Federal
Government shall report to the commissioner the names and addresses
of all persons he or his salesmen have assisted in filing
applications for land owned by the State or Federal Government and
the amount of compensation received from such persons. The report
shall be filed quarterly within 10 days after the end of each
calendar quarter.
10144. The commissioner may prescribe by regulation the information
which shall be contained in contracts or other agreements by a real
estate broker, or a real estate salesman, to assist another or others
in filing an application for the purchase or lease of, or in
locating or entering upon, lands owned by the State or Federal
Government, including, but not limited to, information with regard to
the services agreed to be performed and information with regard to
the hazards which may prevent the person to be assisted in filing an
application with the State or Federal Government ever receiving any
state or federal land under the application.
10145. (a) (1) A real estate broker who accepts funds belonging to
others in connection with a transaction subject to this part shall
deposit all those funds that are not immediately placed into a
neutral escrow depository or into the hands of the broker's
principal, into a trust fund account maintained by the broker in a
bank or recognized depository in this state. All funds deposited by
the broker in a trust fund account shall be maintained there until
disbursed by the broker in accordance with instructions from the
person entitled to the funds.
(2) Notwithstanding the provisions of paragraph (1), a real estate
broker collecting payments or performing services for investors or
note owners in connection with loans secured by a first lien on real
property may deposit funds received in trust in an out-of-state
depository institution insured by the Federal Deposit Insurance
Corporation, if the investor or note owner is any one of the
following:
(A) The Federal National Mortgage Association, the Government
National Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Federal Housing Administration, or the United States
Department of Veterans Affairs.
(B) A bank or subsidiary thereof, bank holding company or
subsidiary thereof, trust company, savings bank or savings and loan
association or subsidiary thereof, savings bank or savings
association holding company or subsidiary thereof, credit union,
industrial bank or industrial loan company, or insurance company
doing business under the authority of, and in accordance with, the
laws of this state, another state, or the United States relating to
banks, trust companies, savings banks or savings associations, credit
unions, industrial banks or industrial loan companies, or insurance
companies, as evidenced by a license, certificate, or charter issued
by the United States or a state, district, territory, or commonwealth
of the United States.
(C) Trustees of a pension, profit-sharing, or welfare fund, if the
pension, profit-sharing, or welfare fund has a net worth of not less
than fifteen million dollars ($15,000,000).
(D) A corporation with outstanding securities registered under
Section 12 of the Securities Exchange Act of 1934 or a wholly owned
subsidiary of that corporation.
(E) A syndication or other combination of any of the entities
specified in subparagraph (A), (B), (C), or (D) that is organized to
purchase the promissory note.
(F) The California Housing Finance Agency or a local housing
finance agency organized under the Health and Safety Code.
(G) A licensed residential mortgage lender or servicer acting
under the authority of that license.
(H) A licensed real estate broker selling all or part of the loan,
note, or contract to a lender or purchaser specified in
subparagraphs (A) to (G), inclusive.
(3) A real estate broker who deposits funds held in trust in an
out-of-state depository institution in accordance with paragraph (2)
shall make available, in this state, the books, records, and files
pertaining to the trust accounts to the commissioner or the
commissioner's representatives or pay the reasonable expenses for
travel and lodging incurred by the commissioner or the commissioner's
representatives in order to conduct an examination at an
out-of-state location.
(b) A real estate broker acting as a principal pursuant to Section
10131.1 shall place all funds received from others for the purchase
of real property sales contracts or promissory notes secured directly
or collaterally by liens on real property in a neutral escrow
depository unless delivery of the contract or note is made
simultaneously with the receipt of the purchase funds.
(c) A real estate sales person who accepts trust funds from others
on behalf of the broker under whom he or she is licensed shall
immediately deliver the funds to the broker or, if so directed by the
broker, shall deliver the funds into the custody of the broker's
principal or a neutral escrow depository or shall deposit the funds
into the broker's trust fund account.
(d) If not otherwise expressly prohibited by this part, a real
estate broker may, at the request of the owner of trust funds or of
the principals to a transaction or series of transactions from whom
the broker has received trust funds, deposit the funds into an
interest-bearing account in a bank, savings and loan association,
credit union, or industrial loan company, the accounts of which are
insured by the Federal Deposit Insurance Corporation, if all of the
following requirements are met:
(1) The account is in the name of the broker as trustee for the
designated beneficiary or principal of a transaction or series of
transactions.
(2) All of the funds in the account are covered by insurance
provided by an agency of the United States.
(3) The funds in the account are kept separate, distinct, and
apart from funds belonging to the broker or to any other person for
whom the broker holds funds in trust.
(4) The broker discloses to the person from whom the trust funds
are received, and to a beneficiary whose identity is known to the
broker at the time of establishing the account, the nature of the
account, how interest will be calculated and paid under various
circumstances, whether service charges will be paid to the depository
and by whom, and possible notice requirements or penalties for
withdrawal of funds from the account.
(5) Interest earned on funds in the account may not inure directly
or indirectly to the benefit of the broker or a person licensed to
the broker.
(6) In an executory sale, lease, or loan transaction in which the
broker accepts funds in trust to be applied to the purchase, lease,
or loan, the parties to the contract shall have specified in the
contract or by collateral written agreement the person to whom
interest earned on the funds is to be paid or credited.
(e) The broker shall have no obligation to place trust funds into
an interest-bearing account unless requested to do so and unless all
of the conditions in subdivision (d) are met, nor, in any event, if
he or she advises the party making the request that the funds will
not be placed in an interest-bearing account.
(f) Nothing in subdivision (d) shall preclude the commissioner
from prescribing, by regulation, circumstances in which, and
conditions under which, a real estate broker is authorized to deposit
funds received in trust into an interest-bearing trust fund account.
(g) The broker shall maintain a separate record of the receipt and
disposition of all funds described in subdivisions (a) and (b),
including any interest earned on the funds.
(h) Upon request of the commissioner, a broker shall furnish to
the commissioner an authorization for examination of financial
records of those trust fund accounts maintained in a financial
institution, in accordance with the procedures set forth in Section
7473 of the Government Code.
(i) As used in this section, "neutral escrow" means an escrow
business conducted by a person licensed under Division 6 (commencing
with Section 17000) of the Financial Code or by a person described in
paragraph (1) or (3) of subdivision (a) of Section 17006 of that
code.
10146. Any real estate broker who contracts for or collects an
advance fee from any other person, hereinafter referred to as the
"principal," shall deposit any such amount or amounts, when collected
in a trust account with a bank or other recognized depository. Such
funds are trust funds and not the funds of the agent. Amounts may be
withdrawn therefrom for the benefit of the agent only when actually
expended for the benefit of the principal or five days after the
verified accounts mentioned hereinafter have been mailed to the
principal. Upon request of the commissioner, a broker shall furnish
to the commissioner an authorization for examination of financial
records of the trust account in accordance with the procedures set
forth in Section 7473 of the Government Code.
The commissioner may issue such rules and regulations as he or she
deems necessary to regulate the method of accounting, and to
accomplish the purpose of the provisions of this code relating to
advance fees including, but not limited to, establishing forms for
and determining information to be included in such accountings. Each
principal shall be furnished a verified copy of such accountings at
the end of each calendar quarter and when the contract has been
completely performed by the licensee. The commissioner shall be
furnished a verified copy of any account or all accounts on his or
her demand therefor.
Where advance fees actually paid by or on behalf of any principal
are not handled in accordance with the preceding paragraph, it shall
be presumed that the agent has violated Sections 506 and 506a of the
Penal Code. The principal may recover treble damages for amounts so
misapplied and shall be entitled to reasonable attorney's fees in any
action brought to recover the same.
10147. (a) On or before January 1, 1993, the Seismic Safety
Commission shall develop, adopt, and publish a Commercial Property
Owner's Guide to Earthquake Safety for distribution to licensees for
purposes of Section 2079.9 of the Civil Code and, upon request, to
any member of the general public.
(b) In developing the guide, the Seismic Safety Commission shall
consult with the California Emergency Management Agency, the Division
of Mines and Geology of the Department of Conservation, the
Department of Real Estate, and other interested agencies and persons.
(c) The commission shall, to the extent possible, rely on
currently available data to develop the guide. To the extent
necessary, the commission may contract for the development and
production of the guide. The commission shall update the contents of
the guide whenever it determines that information within the guide is
sufficiently inaccurate or incomplete so as to reduce the
effectiveness of the guide. The commission shall charge a fee to
cover the costs of production, distribution, development, and
updating the guide.
(d) The guide shall include, but need not be limited to, all of
the following:
(1) Maps and information on geologic and seismic hazard conditions
in the state.
(2) Explanations of typical structural and nonstructural
earthquake hazards.
(3) Recommendations for mitigating the hazards of an earthquake,
including references and explanations of what constitutes "adequate
wall anchorage" as defined in Section 8893.1 of the Government Code.
(4) A statement that there are no guarantees of safety or damage
prevention that can be made with respect to a major earthquake and
that only precautions, such as retrofitting, can be taken to reduce
the risk of various types of earthquake damage. For purposes of
preparing the statement, the commission shall confer with insurers
and design professional associations.
(5) Notice of the obligation to post a sign as required by Section
8875.8 of the Government Code.
10147.5. (a) Any printed or form agreement which initially
establishes, or is intended to establish, or alters the terms of any
agreement which previously established a right to compensation to be
paid to a real estate licensee for the sale of residential real
property containing not more than four residential units, or for the
sale of a mobilehome, shall contain the following statement in not
less than 10-point boldface type immediately preceding any provision
of such agreement relating to compensation of the licensee:
Notice: The amount or rate of real estate commissions is not fixed
by law. They are set by each broker individually and may be
negotiable between the seller and broker.
(b) The amount or rate of compensation shall not be printed in any
such agreement.
(c) Nothing in this section shall affect the validity of a
transfer of title to real property.
(d) As used in this section, "alters the terms of any agreement
which previously established a right to compensation" means an
increase in the rate of compensation, or the amount of compensation
if initially established as a flat fee, from the agreement which
previously established a right to compensation.
10147.6. (a) Any licensee who negotiates, attempts to negotiate,
arranges, attempts to arrange, or otherwise offers to perform a
mortgage loan modification or other form of mortgage loan forbearance
for a fee or other form of compensation paid by the borrower, shall
provide the following to the borrower, as a separate statement, in
not less than 14-point bold type, prior to entering into any fee
agreement with the borrower:
It is not necessary to pay a third party to arrange for a loan
modification or other form of forbearance from your mortgage lender
or servicer. You may call your lender directly to ask for a change in
your loan terms. Nonprofit housing counseling agencies also offer
these and other forms of borrower assistance free of charge. A list
of nonprofit housing counseling agencies approved by the United
States Department of Housing and Urban Development (HUD) is available
from your local HUD office or by visiting www.hud.gov.
(b) If loan modification or other mortgage loan forbearance
services are offered or negotiated in one of the languages set forth
in Section 1632 of the Civil Code, a translated copy of the statement
in subdivision (a) shall be provided to the borrower in that foreign
language.
(c) A violation of this section by a natural person who is a
licensee is a public offense punishable by a fine not exceeding ten
thousand dollars ($10,000), by imprisonment in the county jail for a
term not to exceed one year, or by both that fine and imprisonment,
or if by a corporation, the violation is punishable by a fine not
exceeding fifty thousand dollars ($50,000). These penalties are
cumulative to any other remedies or penalties provided by law.
(d) This section shall apply only to mortgages and deeds of trust
secured by residential real property containing four or fewer
dwelling units.
10148. (a) A licensed real estate broker shall retain for three
years copies of all listings, deposit receipts, canceled checks,
trust records, and other documents executed by him or her or obtained
by him or her in connection with any transactions for which a real
estate broker license is required. The retention period shall run
from the date of the closing of the transaction or from the date of
the listing if the transaction is not consummated. After notice, the
books, accounts, and records shall be made available for examination,
inspection, and copying by the commissioner or his or her designated
representative during regular business hours; and shall, upon the
appearance of sufficient cause, be subject to audit without further
notice, except that the audit shall not be harassing in nature.
(b) The commissioner shall charge a real estate broker for the
cost of any audit, if the commissioner has found, in a final desist
and refrain order issued under Section 10086 or in a final decision
following a disciplinary hearing held in accordance with Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code that the broker has violated Section 10145 or a
regulation or rule of the commissioner interpreting Section 10145.
(c) If a broker fails to pay for the cost of an audit as described
in subdivision (b) within 60 days of mailing a notice of billing,
the commissioner may suspend or revoke the broker's license or deny
renewal of the broker's license. The suspension or denial shall
remain in effect until the cost is paid or until the broker's right
to renew a license has expired.
The commissioner may maintain an action for the recovery of the
cost in any court of competent jurisdiction. In determining the cost
incurred by the commissioner for an audit, the commissioner may use
the estimated average hourly cost for all persons performing audits
of real estate brokers.
10149. (a) On or before July 1, 1992, the Seismic Safety Commission
shall develop, adopt, and publish a Homeowner's Guide to Earthquake
Safety for distribution to licensees for purposes of Section 2079.8
of the Civil Code and, upon request, to any member of the general
public.
(b) In developing the guide, the Seismic Safety Commission shall
consult with the California Emergency Management Agency, the Division
of Mines and Geology of the Department of Conservation, the
Department of Real Estate, and other interested agencies and persons.
(c) The commission shall, to the extent possible, rely on
currently available data to develop the guide. To the extent
necessary, the commission may contract for the development and
production of the guide. The commission shall update the contents of
the guide whenever it determines that information within the guide is
sufficiently inaccurate or incomplete so as to reduce the
effectiveness of the guide. The commission shall charge a fee to
cover the costs of production, distribution, development, and
updating the guide.
(d) The guide shall include, but need not be limited to, all of
the following:
(1) Maps and information on geologic and seismic hazard conditions
for all areas of the state.
(2) Explanations of the related structural and nonstructural
hazards.
(3) Recommendations for mitigating the hazards of an earthquake.
(4) A statement that there are no guarantees of safety or damage
prevention that can be made with respect to a major earthquake and
that only precautions, such as retrofitting, can be taken to reduce
the risk of various types of earthquake damage. For purposes of
preparing the statement, the commission shall confer with insurers
and design professional associations.