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2012 is upon us, bringing with it the inevitable slate of new legislation.  Here are some of the new laws impacting California commercial real estate brokers and salespersons.  For the full text of the bills, please see www.leginfo.ca.gov.


Designation of Managers to Supervise Licensed Activities.


An employing broker may appoint a California Department of Real Estate (“DRE”) licensee to manage the broker’s branch office or division.  The manager may be delegated responsibility to oversee and supervise clerical staff, day to day operations, and licensed activities at the branch.  A manager who fails to properly supervise licensed activities at the branch may be disciplined by the DRE, although appointing a manager does not limit the broker’s own supervisory responsibilities  An employing broker must immediately notify the DRE in the event a branch manager is appointed or terminated.  Senate Bill 510, effective July 1, 2012.


Representations Regarding Value of Real Property; Prohibitions on Improper Influence of Valuations


A DRE licensee may not knowingly or intentionally misrepresent the value of real property.  In addition, no person with an interest in a real estate transaction may improperly influence a real property valuation through coercion, extortion, bribery, intimidation, compensation, or instruction.  However, it is generally permissible to ask the person doing the valuation to consider additional, appropriate property information, to provide further detail or explanation for the valuation, or to correct errors in the valuation report.  It is also generally permissible to obtain multiple valuations for the purpose of selecting the most reliable.  Senate Bill 6, effective January 1, 2012.


Stronger DRE Enforcement Authority.
 


The DRE now has more disciplinary authority over DRE licensees.  The law requires the DRE to post on its website, www.dre.ca.gov, the status of every license issued, including accusations, suspensions and revocations.  It requires all licensees to report within 30 days (a) any disciplinary action taken against them by another state or federal government agency; (b) any disciplinary action taken against them by another California licensing entity; (c) any indictment charging a felony; or (d) any conviction of a misdemeanor or felony.  It also allows the DRE to automatically suspend the license of any licensee who has been incarcerated after conviction of a felony.  Senate Bill 706, effective January 1, 2012.


Reporting Requirements for Escrow Activities.
 


Any real estate broker who engages in five or more escrow activities in a calendar year, or whose escrow activities equal or exceed $1 million in a calendar year, must file a report with the DRE documenting the number and dollar volume of escrows.  The report must be filed within 60 days after the end of the applicable calendar year.  Senate Bill 53, effective July 1, 2012.


DRE Fines for Unlicensed Activity or Real Estate Law Violations.
 


The DRE may issue citations and fines of up to $2,500 to any unlicensed person who engages in licensed activities.  In addition, the DRE may issue citations and fines of up to $2,500 to any licensee who violates California’s Real Estate Law.  These citations will not be reported as discipline, but failure to comply with their terms may lead to disciplinary action and non-renewal of the DRE license.  Senate Bill 53, effective January 1, 2012.


DRE License Suspension for Large Tax Delinquencies.
 


The State Board of Equalization and the Franchise Tax Board must post a list of the 500 largest tax delinquencies over $100,000.  The DRE and most other state licensing agencies must suspend and refuse to issue or renew the license of anyone on either tax delinquency list.  Most provisions of this law become effective July 1, 2012.  Assembly Bill 1424.

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