Bill Text: CA SB269 | 2013-2014 | Regular Session | Chaptered
Bill Title: Prepaid rental listing service.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2013-09-30 - Chaptered by Secretary of State. Chapter 436, Statutes of 2013. [SB269 Detail]
Download: California-2013-SB269-Chaptered.html
BILL NUMBER: SB 269 CHAPTERED
BILL TEXT
CHAPTER 436
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2013
APPROVED BY GOVERNOR SEPTEMBER 30, 2013
PASSED THE SENATE SEPTEMBER 12, 2013
PASSED THE ASSEMBLY SEPTEMBER 12, 2013
AMENDED IN ASSEMBLY AUGUST 30, 2013
AMENDED IN ASSEMBLY JUNE 27, 2013
INTRODUCED BY Senator Hill
FEBRUARY 14, 2013
An act to amend Sections 149, 10080.9, 10167.3, 10167.9, 10470,
10471, and 10475 of, and to add Section 10167.95 to, the Business and
Professions Code, relating to real estate, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 269, Hill. Prepaid rental listing service.
Existing law authorizes specified state agencies to issue a
citation including an order of correction, as specified, if, upon
investigation, the agency has probable cause to believe that a person
is advertising services in a telephone directory without being
properly licensed or registered to offer or perform those services.
This bill would authorize the Bureau of Real Estate to issue those
citations.
The Real Estate Law provides for the licensure and regulation of
prepaid rental listing services by the Real Estate Commissioner.
Existing law prohibits a person from engaging in the business of a
prepaid rental listing service unless licensed in that capacity or
licensed as a real estate broker. A willful violation of these
provisions is a crime.
Existing law authorizes the commissioner, or his or her designated
representative, to issue a citation to a person who does not possess
a real estate license if the commissioner has cause to believe that
the person is engaged or has engaged in activities for which a
license is required.
This bill would additionally authorize a citation to be issued for
a person who does not possess a prepaid rental listing service
license or a real estate broker license if the commissioner has cause
to believe that the person is engaged or has engaged in activities
for which a license is required.
Existing law imposes a $100 fee for an application for a license
as a prepaid rental listing service for the first location, and a $25
fee for each additional location. Existing law imposes additional
fees for obtaining or renewing a broker license or salesperson
license when, on June 30 of any year, the balance remaining in the
Consumer Recovery Account, a continuously appropriated account in the
Real Estate Fund, is less than $200,000, and for 4 years thereafter.
This bill would increase those application fees to $125 and $50,
respectively. The bill would require $25 of each application fee to
be credited to the Consumer Recovery Account. The bill would also
impose an additional fee of $1 on every person obtaining or renewing
a prepaid rental listing service license for 2 years after the
balance in that account is less than $200,000. By increasing the
amount of moneys that may be deposited into the Consumer Recovery
Account, this bill would make an appropriation.
Existing law requires a prepaid rental listing service licensee to
offer the prospective tenant a written contract prior to the
acceptance of a fee. The contract must include, among other things,
the licensee's name.
This bill would also require the contract to include the licensee'
s license number.
The bill would also require a specified written notice about
refunds to be provided to the prospective tenant prior to the
acceptance of a fee. Because a willful violation of these provisions
would be a crime, this bill would impose a state-mandated local
program. The bill also would make related changes.
Existing law authorizes an aggrieved person, who obtains a final
judgment, including a criminal restitution order, or an arbitration
award based on a defendant's acts for which a real estate license was
required, to apply to the bureau for payment from the Consumer
Recovery Act, as specified. Existing law requires the license of a
broker or salesperson to be automatically suspended when the
commissioner pays from the Consumer Recovery Account any amount in
the settlement of a claim or toward the satisfaction of a judgment
against that broker or salesperson.
This bill would additionally apply those provisions to the license
of a prepaid rental listing service licensee.
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.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 149 of the Business and Professions Code is
amended to read:
149. (a) If, upon investigation, an agency designated in
subdivision (e) has probable cause to believe that a person is
advertising in a telephone directory with respect to the offering or
performance of services, without being properly licensed by or
registered with the agency to offer or perform those services, the
agency may issue a citation under Section 148 containing an order of
correction that requires the violator to do both of the following:
(1) Cease the unlawful advertising.
(2) Notify the telephone company furnishing services to the
violator to disconnect the telephone service furnished to any
telephone number contained in the unlawful advertising.
(b) This action is stayed if the person to whom a citation is
issued under subdivision (a) notifies the agency in writing that he
or she intends to contest the citation. The agency shall afford an
opportunity for a hearing, as specified in Section 125.9.
(c) If the person to whom a citation and order of correction is
issued under subdivision (a) fails to comply with the order of
correction after that order is final, the agency shall inform the
Public Utilities Commission of the violation and the Public Utilities
Commission shall require the telephone corporation furnishing
services to that person to disconnect the telephone service furnished
to any telephone number contained in the unlawful advertising.
(d) The good faith compliance by a telephone corporation with an
order of the Public Utilities Commission to terminate service issued
pursuant to this section shall constitute a complete defense to any
civil or criminal action brought against the telephone corporation
arising from the termination of service.
(e) Subdivision (a) shall apply to the following boards, bureaus,
committees, commissions, or programs:
(1) The Bureau of Barbering and Cosmetology.
(2) The Cemetery and Funeral Bureau.
(3) The Veterinary Medical Board.
(4) The Landscape Architects Technical Committee.
(5) The California Board of Podiatric Medicine.
(6) The Respiratory Care Board of California.
(7) The Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation.
(8) The Bureau of Security and Investigative Services.
(9) The Bureau of Automotive Repair.
(10) The California Architects Board.
(11) The Speech-Language Pathology and Audiology Board.
(12) The Board for Professional Engineers and Land Surveyors.
(13) The Board of Behavioral Sciences.
(14) The Structural Pest Control Board.
(15) The Acupuncture Board.
(16) The Board of Psychology.
(17) The California Board of Accountancy.
(18) The Naturopathic Medicine Committee.
(19) The Physical Therapy Board of California.
(20) The Bureau for Private Postsecondary Education.
(21) The Bureau of Real Estate.
SEC. 2. 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 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 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 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
renewed if an unpaid fine remains outstanding or the terms of a
citation have not been complied with.
SEC. 3. Section 10167.3 of the Business and Professions Code is
amended to read:
10167.3. (a) A separate application for a license as a prepaid
rental listing service shall be made in writing for each location to
be operated by a licensee other than a real estate broker. Each
application shall be on forms provided by the bureau, shall be signed
by the applicant, and shall be accompanied by a
one-hundred-twenty-five-dollar ($125) application fee for the first
location, and a fifty-dollar ($50) application fee for each
additional location of the applicant.
Applications to add or eliminate locations during the term of a
license shall be on forms prescribed by the bureau. A fifty-dollar
($50) application fee for the remainder of a license term for each
location to be added shall accompany the application. Twenty-five
dollars ($25) of each application fee shall be credited to the
Consumer Recovery Account.
(b) A real estate broker may provide a prepaid rental listing
service at a licensed office for the conduct of his or her real
estate brokerage business if the business at the office is conducted
under the immediate supervision of the broker or of a real estate
salesperson licensed to, and acting on behalf of, the broker.
SEC. 4. Section 10167.9 of the Business and Professions Code is
amended to read:
10167.9. (a) Prior to the acceptance of a fee, a licensee shall
offer the prospective tenant a written contract, either on paper or
in electronic form, which shall include at least the following:
(1) The name and license number of the licensee and the addresses
and telephone numbers of the principal office or location of the
licensee and of the location, or branch office of a real estate
broker, providing the listing to the prospective tenant.
(2) Acknowledgment of receipt of the fee, including the amount.
(3) A description of the service to be performed by the licensee,
including significant conditions, restrictions, and limitations where
applicable.
(4) The prospective tenant's specifications for the rental
property, including, but not limited to:
(A) Type of structure, including, but not limited to, detached
single-family home, apartment, or duplex.
(B) Location by commonly accepted residential area name, by
designation of boundary streets, or by any other manner affording a
reasonable means of identifying locations acceptable to the
prospective tenant.
(C) Furnished or unfurnished.
(D) Number of bedrooms required.
(E) Maximum acceptable monthly rental.
(5) The contract expiration date, which shall not be later than 90
days from the date of execution of the contract.
(6) A clause setting forth the right to a full or partial refund
of the fee paid as provided in Section 10167.10.
(7) The signature and printed full name of the licensee or of the
designated agent, real estate salesperson, or employee acting on
behalf of the licensee. The signature of any person, including any
signature required by the terms of the contract to be provided by the
prospective tenant, may be provided in any electronic form that
provides a reasonable method of indicating that the individual whose
signature is required authorized the contract to be signed in that
electronic form.
(8) A clause in bold type letters outlining the small claims court
remedy available to the prospective tenant.
(9) A clause in boldface type letters clearly stating that the
purchase of any goods and services other than the provision of
listings of residential real properties for tenancy is optional.
(b) (1) The original of each contract, any separate contracts for
required goods or services, refund claims, receipts and any other
relevant documents shall be retained by the licensee for a period of
not less than three years from the date of termination of the
contract during which time the contract shall be subject to
examination by a duly authorized representative of the commissioner.
Any records retained pursuant to this subdivision that are stored in
the ordinary course of business in digital media shall, upon request
of a duly authorized representative of the commissioner, be provided
on diskette, CD-ROM or similar portable digital storage medium. For
purposes of this subdivision, the "original" of a contract executed
in electronic form shall be either the copy of the contract stored in
digital media or a paper printout of that contract.
(2) Any licensee, or employee thereof, shall dispose of the
documents required to be kept pursuant to paragraph (1) by shredding
or other appropriate means so that the identity of the prospective
tenant may not be determined from the disposed information alone or
in combination with other publicly available information.
(c) The form of contract proposed to be used by a licensee to
effect compliance with this section shall be filed with the bureau
prior to use. Any modification of a form previously filed with the
bureau, including a change in the name or business address of the
licensee, shall also be filed prior to use. The bureau shall withhold
the issuance or renewal of a license until the bureau has approved
the contract. If a proposed modification to a contract has not been
approved or disapproved within 15 working days of being filed with
the bureau, the proposed modification shall be deemed approved. If a
proposed modification or contract provision is disapproved, the
bureau shall communicate that disapproval in writing to the licensee
within 15 working days of being filed with the bureau, accompanied by
a written justification of why the modification or contract
provision is contrary to the requirements of this article.
(d) Notwithstanding any other provision of law, a contract for
prepaid rental listing services executed in electronic form, and
signed in any electronic form that provides a reasonable method of
indicating that the individual whose signature is required authorized
the contract to be signed in electronic form, shall be valid to the
same extent as an executed written contract. Upon request by the
customer, the licensee shall deliver an executed paper copy to the
customer within five working days of receiving the request.
SEC. 5. Section 10167.95 is added to the Business and Professions
Code, to read:
10167.95. Prior to the acceptance of a fee, and in addition to
the contract required pursuant to Section 10167.9, a licensee shall
provide the prospective tenant with the following written notice, in
a type size of at least 12-point type:
YOU MAY BE ENTITLED TO A REFUND IF YOU DO NOT RECEIVE THE SERVICES
YOU HAVE BEEN PROMISED. COMPLETE TERMS AND CONDITIONS GOVERNING THE
REFUND TO WHICH YOU MAY BE ENTITLED ARE CONTAINED IN YOUR CONTRACT.
THE FOLLOWING IS A SIMPLIFIED SUMMARY OF SOME OF THE RIGHTS DESCRIBED
IN YOUR CONTRACT:
If (name of licensee) does not provide you with at least three
available rental properties meeting the specifications of your
contract within five days after you pay the fee charged by (name of
licensee), you are entitled to a full refund. To obtain this refund,
you must request it from (name of licensee) in writing within 15 days
of paying your fee.
If you do not obtain a rental through the services of (name of
licensee) during the term of your contract, you are entitled to a
refund of your fee, minus a service charge, which may not exceed ____
dollars ($____). To obtain this refund, you must provide (name of
licensee) with written documentation or a signed statement that you
obtained a rental without the assistance of (name of licensee) or
that you did not move. This documentation or signed statement must be
provided to (name of licensee) with a written request for refund,
within 10 days following the expiration of your contract.
If (name of licensee) fails to refund your money, as required by
your contract, you may sue (name of licensee) in a small claims
court. The court may award you the refund you failed to receive, plus
additional damages, up to $1,000.
If you wish to file a complaint about (name of licensee) or if you
cannot collect on a court award, you should contact the Bureau of
Real Estate at 1-877-373-4542 or www.bre.ca.gov.
SEC. 6. Section 10470 of the Business and Professions Code is
amended to read:
10470. If, on June 30 of any year, the balance remaining in the
Consumer Recovery Account in the Real Estate Fund is less than two
hundred thousand dollars ($200,000), every licensed broker, when
obtaining or renewing any broker license within four years
thereafter, shall pay, in addition to the license fee, a fee of seven
dollars ($7); every licensed salesperson, when obtaining or renewing
such license within four years thereafter, shall pay, in addition to
the license fee, a fee of four dollars ($4); and every person
holding a prepaid rental listing service license, when obtaining or
renewing that license within two years thereafter, shall pay, in
addition to the application fee, a fee of one dollar ($1). The fees
from the broker, salesperson, and prepaid rental listing service
licensees shall be paid into the State Treasury and credited to the
Consumer Recovery Account.
SEC. 7. Section 10471 of the Business and Professions Code is
amended to read:
10471. (a) When an aggrieved person obtains (1) a final judgment
in a court of competent jurisdiction, including, but not limited to,
a criminal restitution order issued pursuant to subdivision (f) of
Section 1202.4 of the Penal Code or Section 3663 of Title 18 of the
United States Code, or (2) an arbitration award that includes
findings of fact and conclusions of law rendered in accordance with
the rules established by the American Arbitration Association or
another recognized arbitration body, and in accordance with Sections
1281 to 1294.2, inclusive, of the Code of Civil Procedure where
applicable, and where the arbitration award has been confirmed and
reduced to judgment pursuant to Section 1287.4 of the Code of Civil
Procedure, against a defendant based upon the defendant's fraud,
misrepresentation, or deceit, made with intent to defraud, or
conversion of trust funds, arising directly out of any transaction in
which the defendant, while licensed under this part, performed acts
for which a real estate license or a prepaid rental listing service
license was required, the aggrieved person may, upon the judgment
becoming final, file an application with the Bureau of Real Estate
for payment from the Consumer Recovery Account, within the
limitations specified in Section 10474, of the amount unpaid on the
judgment that represents an actual and direct loss to the claimant in
the transaction. As used in this chapter, "court of competent
jurisdiction" includes the federal courts, but does not include the
courts of another state.
(b) The application shall be delivered in person or by certified
mail to an office of the bureau not later than one year after the
judgment has become final.
(c) The application shall be made on a form prescribed by the
bureau, verified by the claimant, and shall include the following:
(1) The name and address of the claimant.
(2) If the claimant is represented by an attorney, the name,
business address, and telephone number of the attorney.
(3) The identification of the judgment, the amount of the claim
and an explanation of its computation.
(4) A detailed narrative statement of the facts in explanation of
the allegations of the complaint upon which the underlying judgment
is based.
(5) (A) Except as provided in subparagraph (B), a statement by the
claimant, signed under penalty of perjury, that the complaint upon
which the underlying judgment is based was prosecuted conscientiously
and in good faith. As used in this section, "conscientiously and in
good faith" means that no party potentially liable to the claimant in
the underlying transaction was intentionally and without good cause
omitted from the complaint, that no party named in the complaint who
otherwise reasonably appeared capable of responding in damages was
dismissed from the complaint intentionally and without good cause,
and that the claimant employed no other procedural means contrary to
the diligent prosecution of the complaint in order to seek to qualify
for the Consumer Recovery Account.
(B) For the purpose of an application based on a criminal
restitution order, all of the following statements by the claimant:
(i) The claimant has not intentionally and without good cause
failed to pursue any person potentially liable to the claimant in the
underlying transaction other than a defendant who is the subject of
a criminal restitution order.
(ii) The claimant has not intentionally and without good cause
failed to pursue in a civil action for damages all persons
potentially liable to the claimant in the underlying transaction who
otherwise reasonably appeared capable of responding in damages other
than a defendant who is the subject of a criminal restitution order.
(iii) The claimant employed no other procedural means contrary to
the diligent prosecution of the complaint in order to seek to qualify
for the Consumer Recovery Account.
(6) The name and address of the judgment debtor or, if not known,
the names and addresses of persons who may know the judgment debtor's
present whereabouts.
(7) The following representations and information from the
claimant:
(A) That he or she is not a spouse of the judgment debtor nor a
personal representative of the spouse.
(B) That he or she has complied with all of the requirements of
this chapter.
(C) That the judgment underlying the claim meets the requirements
of subdivision (a).
(D) A description of searches and inquiries conducted by or on
behalf of the claimant with respect to the judgment debtor's assets
liable to be sold or applied to satisfaction of the judgment, an
itemized valuation of the assets discovered, and the results of
actions by the claimant to have the assets applied to satisfaction of
the judgment.
(E) That he or she has diligently pursued collection efforts
against all judgment debtors and all other persons liable to the
claimant in the transaction that is the basis for the underlying
judgment.
(F) That the underlying judgment and debt have not been discharged
in bankruptcy, or, in the case of a bankruptcy proceeding that is
open at or after the time of the filing of the application, that the
judgment and debt have been declared to be nondischargeable.
(G) That the application was mailed or delivered to the bureau no
later than one year after the underlying judgment became final.
(d) If the claimant is basing his or her application upon a
judgment against a salesperson, and the claimant has not obtained a
judgment against that salesperson's employing broker, if any, or has
not diligently pursued the assets of that broker, the application
shall be denied for failure to diligently pursue the assets of all
other persons liable to the claimant in the transaction unless the
claimant can demonstrate, by clear and convincing evidence, either
that the salesperson was not employed by a broker at the time of the
transaction, or that the salesperson's employing broker would not
have been liable to the claimant because the salesperson was acting
outside the scope of his or her employment by the broker in the
transaction.
(e) The application form shall include detailed instructions with
respect to documentary evidence, pleadings, court rulings, the
products of discovery in the underlying litigation, and a notice to
the applicant of his or her obligation to protect the underlying
judgment from discharge in bankruptcy, to be appended to the
application.
(f) An application for payment from the Consumer Recovery Account
that is based on a criminal restitution order shall comply with all
of the requirements of this chapter. For the purpose of an
application based on a criminal restitution order, the following
terms have the following meanings:
(1) "Judgment" means the criminal restitution order.
(2) "Complaint" means the facts of the underlying transaction upon
which the criminal restitution order is based.
(3) "Judgment debtor" means any defendant who is the subject of
the criminal restitution order.
SEC. 8. Section 10475 of the Business and Professions Code is
amended to read:
10475. Should the commissioner pay from the Consumer Recovery
Account any amount in settlement of a claim or toward satisfaction of
a judgment against a licensed broker or salesperson or a person
holding a prepaid rental listing service license, the license of the
broker or salesperson or prepaid rental listing service licensee
shall be automatically suspended upon the date of payment from the
Consumer Recovery Account. No broker or salesperson or prepaid rental
listing service licensee shall be granted reinstatement until he or
she has repaid in full, plus interest at the prevailing legal rate
applicable to a judgment rendered in any court of this state, the
amount paid from the Consumer Recovery Account on his or her account.
A discharge in bankruptcy shall not relieve a person from the
penalties and disabilities provided in this chapter.
SEC. 9. 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.
