June 2017: CA Court of Appeals Rules in Favor of Real Estate Agent in Statute of Frauds Case

By: JOHN V. GIARDINELLI, ATTORNEY AT LAW
ASHLEY A. RICHARDSON, LAW CLERK
CASEY MCINTOSH, PARALEGAL

In February, the California Court of Appeal (“Court”) ruled on the question of whether a real estate agent can bring a lawsuit against the owners of a property for a commission if not all of the owners signed the listing agreement, but one owner allegedly signed on behalf of all owners. Long story short, the Court ultimately decided that a real estate agent should have the ability to bring a suit to prove the owner signed on behalf of others.

Bernice Jacobs (“Jacobs”) is a licensed California real estate broker who, in April 2013, entered in to a Vacant Land Listing Agreement (“Agreement”) for which she had the “exclusive and irrevocable right” to sell a parcel of real property in Marin County. Per the agreement, if Jacobs was able to obtain a buyer during the year-long listing period, she would receive a $200,000 commission. The only caveat to the Agreement was that if an entity called “Open Space Land Trust” purchased the property, Jacobs would not receive a commission.

There were six owner signatories to the Agreement, but only one owner signed, [John B. Locatelli (“Locatelli”), as trustee of the John B. Locatelli Trust]. The other signature lines were left blank. Per Jacobs, Locatelli stated that he had the authority to act on behalf of the other owners and a written agency agreement existed to that effect (though Jacobs never saw the agreement). Furthermore, after the Agreement went into effect, Jacobs claims the other owners acknowledged her employment, were impressed by her performance, and even went so far as to inquire with her about working on other projects.

By mid-April 2013, Jacobs procured The Trust for Public Land (“TPL”) as a potential buyer. After Jacobs informed Locatelli of this, Locatelli allegedly became angry and stated that he had been speaking with TPL for three years. He demanded the contact information for the person Jacobs was working with and wanted to change the Agreement exception from “Open Space Land Trust” to “TPL.” Jacobs looked into Locatelli’s allegations, but her contact at TPL confirmed that he hadn’t known the property was for sale until Jacobs contacted him, and that he had never spoken to Locatelli before. Thereafter, Locatelli informed Jacobs that TPL had been instructed not to speak with her, and that he would be dealing with them directly. Later in 2013, the owners and TPL entered into an agreement for TPL to buy the property, leaving Jacobs out of the transaction. (Somewhat unsurprisingly, the transaction was never consummated due to issues between the owners and TPL.)

In April 2014, Jacobs filed a complaint against the owners (and TPL), alleging breach of contract and specific performance (the commission promised in the Agreement), amongst other causes of action. The owners demurred to the complaint, stating that the facts in Jacob’s complaint were insufficient to establish a cause of action and therefore the complaint should be dismissed. The owners relied on the Statute of Frauds codified in Code of Civil Procedure § 1624(a)(4) which states that a real estate broker’s contract must be “in writing and subscribed by the party to be charged or by the party’s agent.” The owners alleged that they did not sign the Agreement and that Locatelli did not sign on their behalf due to the fact that the property was held as tenants in common. The trial court sustained the demurrer and Jacobs amended her complaint, alleging the owners were part of a joint venture, the purpose of which was to invest in the property. Defendants demurred to the amended complaint contending the Agreement did not refer to a joint venture and was therefore still bound by the Statute of Frauds. The demurrer was sustained without leave to amend and Jacobs appealed.

According to prior caselaw, “the ‘courts have long had little sympathy for the broker who fails to adhere to the Statute of Frauds.’” Meaning, historically the Statute of Frauds has been strictly adhered to in the case of real estate licensees, even when it results in perceived unfairness. However, “‘‘The Statute of Frauds was not enacted to afford persons a means of evading just obligations… Therefore, if after a consideration of the surrounding circumstances, the pertinent facts and all the evidence in a particular case…the purpose of the Statute will best be served by holding the note or memorandum sufficient even though it is ambiguous or incomplete.’” (Sterling v. Taylor (2007) 40 Cal.4th 757.) In the instant action, the Court believed that the case should have moved forward in order to allow Jacobs the opportunity to introduce evidence that Locatelli signed the agreement on behalf of the owners, as a partner in a joint venture. The real issue, the Court contended, was whether this alleged joint venture was enough to satisfy the Statute of Frauds. The decision of the trial court was therefore reversed and the case was remanded for further litigation.

For REALTORS®, the ultimate takeaway from this case may be to make sure all of your contracts are fully executed in order to avoid costly litigation. However, the case also demonstrates that for those who do get a jump start on marketing a property, not all may be lost (except for attorney’s fees). The Statute of Frauds is a hard and fast law, but like most laws, it is not without some room for interpretation. The best takeaway is not to put yourself in the position of having to litigate your rights to compensation. Confirm signatures, the authority to act by signatories in writing, and the status of the entity.

 

http://srcar.org/assets/2017/07/June-2017-Newsletter_Jacobs-v.-Locatelli-et-al.pdf


Supra Maintenance next Tuesday May 30th

Dear Valued Customer,

 

On Tuesday May 30th starting at 8:30pm PDT and ending at 11:00pm PDT, Supra will be conducting routine maintenance at our data center.  We expect you could experience intermittent outages during the maintenance window.

 

How will Updates be Available?

 

What MAY not be Working for a short time?

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  • Automated Phone Payments (IVR system)
  • ActiveKEY Automatic Updates
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What WILL be Working?

  • SupraWEB (update codes only)
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Thank you,

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May 2017: Real Estate Teams: CalBRE Cracks Down; Benefits of Team Work

BY: JOHN V. GIARDINELLI, ATTORNEY AT LAW
CASEY MCINTOSH, PARALEGAL

Real estate teams have long been held under the California Bureau of Real Estate’s (“CalBRE”) microscope, as well as both lauded and lamented by those in the industry. This month’s Courtside Newsletter will explore why real estate teams are back in the hot seat, and why joining a team has been such a heated debate.

CALBRE CRACKDOWN
In March, CalBRE issued a Licensee Alert entitled “Supplemental Disciplinary Advisory to Real Estate Salespersons Who Mislead Consumers into Falsely Believing that They are Brokers—and a Concurrent Caution to the ‘[Ir]responsible’ Brokers Who Permit or Support Such Practices.” This supplement is a follow up to a similarly-named September 2015 release, and Real Estate Commissioner Wayne Bell appears none too happy to be repeating himself. Both releases can be found on CalBRE’s website (www.calbre.ca.gov), and both warn against real estate salespersons acting or advertising themselves in a manner that suggests they are the broker. This applies to salespersons advertising themselves as “independent” and, more recently, to those using fictitious business names and team names that might mislead the public. In the March 2017 advisory, CalBRE uses the example of “Doe Real Estate,” whose advertisements lead the public to believe that Salesperson Doe is the broker or brokerage. Such insinuations are unlawful, on both the part of the salesperson and the broker who is responsible for supervising his or her salespersons (including their advertisements). CalBRE states that it will take “appropriate disciplinary action (including the imposition of significant fines and—where appropriate—the revocation of licensure)” against salespersons and brokers found to be participating in these activities. Ultimately, “If a salesperson wants to act and advertise as an independent or freelance real estate licensee in California, he or she must become a real estate broker. There are no exceptions.”

The Law
California Business & Professions Code § 10159.5, et seq. is the governing law for the use of fictitious business names (FBNs) by real estate professionals. A salesperson may obtain a FBN with permission from his or her broker, and the FBN is subject to the broker’s control. The broker also has a duty to supervise the salespersons using the FBN. Per B&P § 10159.5(d), all advertising and solicitation materials, including “business cards, print or electronic media and for sale signage” must include the responsible broker’s identity “in a manner equally as prominent as the fictitious business name” (emphasis added). Since such guidelines are explicitly stated in the law, one can see why Commissioner Bell would be aggrieved at having to repeat himself in the most recent CalBRE advisory.

While a FBN and team name are not the same under the law, and are often confused, they do have similar requirements. A team name does not need a license by CalBRE as a fictitious business name (but may still need to be filed with the county) if:

The name is used by two or more real estate licensees.

The words “Team,” “Group,” or “Associates” is used together with a surname of one of the licensees.

The name does not include terms that imply or suggest the existence of an entity independent of the responsible broker.

Any first point of contact materials, “For Sale” signs, websites, and ads include:

Salesperson’s first and last name

Salesperson’s CalBRE license number

Responsible broker’s identity (company name), which is as prominent as the “team name”

The Responsible broker’s identity is optional so long as the company name is provided

Again, there is express language regarding identifying oneself as under a broker’s supervision, and including the broker’s identity prominently.

CalBRE’s advisory continues to be timely as many real estate professionals try to distinguish themselves from the rest via advertising. However commendable that is, though, it is important to do so legally and ethically. It is not only a legal dilemma, but misleading the public to make them believe one is acting as or without a broker could also be seen as an ethical issue. This could lead to further problems for REALTOR® members who are bound by the National Association of REALTORS® Code of Ethics.

THE GREAT DEBATE: ARE TEAMS WORTHWHILE?
With what seems like a lot of rigmarole surrounding teams and team names, the question arises: are they worth it? As with most things, arguments can be made both in favor of and against joining a real estate team. According to Jill Penman, leader of the Jill Penman Group in Florida, it was “in the construct of a team where [she] found the real education [she] needed…to manage the complexities and realities of being a Realtor® today.” Conversely, Charlie Peterson with RealtyTrust Residential in Tennessee doesn’t believe that the concept of teams was “birthed by asking how [Realtors] can best serve [their] clients, nor has it flourished and produced better agents under its popularity.” Let’s jump into some of the pros and cons for agents looking to join a team.

Joining a Team: Pros

  • Jump-start a real estate career as a new agent
  • On-the-job training—learn the ins and outs of the field while getting paid to do so
  • Division and specialization of labor
    • You don’t have to do everything yourself
    • Focus on areas you excel in
  • Collaboration of efforts and ideas
  • Networking/expanding your circle of influence
  • Possibility of generating more leads, leading to more business and more money
  • Accountability to the rest of the team, keeping you focused and driven
  • Different perspectives from marketing to problem solving
  • Time off (i.e. you can go on vacation, knowing someone else will cover you)
  • Shared business expenses

Joining a Team: Cons

  • “Specialization” can be limiting,
    • You may not understand all aspects of a real estate transaction as a result
  • There may be little to no actual advancement for new agents
  • Lack of autonomy
    • You may not get the assignments or leads you want and, as a result, you may not get to choose the direction of your career
  • Inability to build a personal brand or work in a manner you would prefer
  • Teams are not often as well-run as they purport to be
  • Teams may be confusing to their clients when the point of contact is constantly shifting and changing,
    • This could lead to a poor agent-client relationship
  • Not all team members will be “good” agents, and some may even be unreliable
  • Clashing personality types
  • Commission splitting with other agents on the team
  • Minimum requirements you must meet

Ultimately, joining a team is a personal decision that revolves around how you best work and function. Furthermore, the specific team you join must suit your needs. While you may be an entrepreneurial spirit, chomping at the bit to start prospecting and selling homes, you may still need some guidance and mentorship that a team may offer, at least for the first few years. However, if you choose a team that doesn’t respect and nurture your self-starting attitude, you may find yourself stifled and hating your job. Clearly, neither joining a team nor vetting a potential team is a decision to be made lightly.

May 2017 Newsletter_Real Estate Teams


Supra eKEY and iOS 10.3.1

Dear Customer,

Apple iOS 10.3.1

Apple recently released operating system iOS 10.3.1 for iPhones and iPads. We completed testing of the new iOS with the eKEY app and are happy to announce there are no issues.

Thank you,
Supra


March 2017 Courtside Newsletter: C.A.R. Winter Business Meetings

Available for download in PDF.

BY: KELLY A. NEAVEL, ATTORNEY AT LAW
ASHLEY A. PLANCHON, LAW CLERK
LINDA CONAWAY, LEGAL ASSISTANT

Our office once again had the privilege of attending the California Association of REALTORS® (C.A.R.) winter business meetings. Below is an overview of some of the topics that were touched upon in those meetings.

Legal Affairs Forum
Copyright and Trademark Issues Affecting REALTORS®

Shuan Lue, a C.A.R. Staff Attorney, provided a general presentation of Intellectual Property for REALTORS®, which discussed the basics of copyright and trademark law. The main takeaway from the presentation was that almost any original material produced by an individual that has some level of creativity to it can be considered copyrighted or a trademark. In order for employers and agents to protect themselves against copyright or trademark infringement, they should make sure to seek permission prior to the use of any material that would not be considered fair use, or common to the general public. This can be done through an assignment of rights and licenses.

Cyber Threats Involving Real Estate Transactions

FBI Supervisory Special Agent, Michael Sohn presented on the topic of Cyber Threats Involving Real Estate Transactions. Per Mr. Sohn, small businesses, companies with 100 or fewer employees, are at a higher risk for being a victim of cybercrime because there is less of a risk for the cybercriminal in getting caught.

One of the most popular methods of cybercrime currently taking place is through “Business Email Compromise” (“BEC”), in which a cybercriminal is able to obtain thousands of dollars fraudulently in just five simple steps.

  1. The cybercriminal searches the internet for programs which generates email lists for a particular industry.
  2. The cybercriminal then sends a “phishing email,” or an email that is legitimate on its face but is actually fraudulent, to thousands of the email addresses he just received from the internet site. (For a real estate agent, it could be a document download under a client’s name.)
  3. When the email recipient opens the email and clicks the link, he will be directed to input his or her username and password into the account in order to download the document. The recipient has now unknowingly sent the hacker the ability to access his account.
  4. The cybercriminal will send an email to a client that will provide the client with new instructions on how and where to wire money for transactions.
  5. The client then sends the funds through the wire instructions as part of the real estate transaction. He is often unaware of the fraud until they speak with his real estate agent and it becomes known that the appropriate parties did not receive any money. Usually by then it is too late.

Mr. Sohn stated that the only way to protect yourself and your clients is to notify your clients to not respond to any email that appears to be sent by you or your company regarding wiring money or the payment of client bills. Also, it is essential that a small business have a two-step authentication security system. Such systems require dual certification through the use of a computer and a mobile device. For further information on protecting your business from cybercrime, see our September 2016 Courtside Newsletter.

Currently, firms and agents are not being held liable for BEC crimes. However, there is a potential for individuals to become liable if reasonable security measures are not taken.

Standard Forms Advisory Committee Forum on Forms

  • Water-Conserving Plumbing Fixtures and Carbon Monoxide Detector Notice (WCMD): One of the topics that caused significant discussion and debate was the law behind the new WCMD form regarding low-flow water fixtures. Many agents are concerned with the possible effect this law will have on their clients and how to advise them properly. C.A.R. has developed numerous tools available on their website to deal with this topic, such as a training PowerPoint for real estate agents as well as an informative flyer and video for clients. The Standard Forms Advisory Chair, Jeff Kahn, also stated that it was important to note that there is no enforcement mechanism for this law and that it is a condition of ownership requirement, not a point of sale.
  • Team Agreement: C.A.R. has announced that it is in the process of creating a Team Agreement form for this year that will better define the scope and responsibilities of agents participating in a Team relationship. There was no release date given for this form.

Member Legal Services

For detailed information regarding new California laws, please see our December Courtside Newsletter.

One issue of note that arose in the meeting was with regards to the Department of Housing and Urban Development’s (HUD) “Guidance on Fair Housing Protection for People with Limited English Proficiency” released in September 2016. Ultimately it was advised that agents should not be translators. Instead, agents should speak to the translator in English and rely on the translator to translate.

Property Management

C.A.R.’s Robert Bloom presented the Property Management Legal Open Forum: New Laws and Recent Developments. The presentation focused on the following:

Commercial Leasing Certified Access Specialist Program (CASp) Disclosure and Cancellation Right

Effective on September 17, 2016, new disclosure language is required when there is no CASp report. This information is included in the new form, which is titled, “Commercial Lease Construction Accessibility Addendum” (CLCA). This does not require meeting applicable standards as a condition of the lease. If there is a report, Landlord should provide this form 48 hours prior to the tenant signing the lease. Otherwise the lessee has a 72-hour cancellation right.

Unlawful Detainer Masking

Public access to Unlawful Detainer records is no longer permitted unless the plaintiff/landlord prevails within sixty (60) days of filing the unlawful detainer action. Previously, it was the defendant/tenant who had to prevail within sixty (60) days of filing to bar access. The practical effect of this is the ability of property managers to know which tenants have been sued for unlawful detainer will be compromised.

Criminal Screening

The HUD’s General Counsel restricts criminal screening and blanket refusals to rent based upon criminal records or conviction as having disparate impact on protected groups. There is no requirement that a landlord or property manager intends to discriminate. A policy or practice, even a facially neutral one, may constitute illegal discrimination unless it is necessary to serve a substantial, legitimate, nondiscriminatory interest of the landlord or property manager. Such a policy may also be allowed if the landlord or property manager adopts a practice that has less discriminatory effect. The landlord or property manager must consider when a conviction occurred, the underlying conduct and what the convicted person has done since. (This is a very difficult and subjective burden.)

It is still legal to take into consideration a criminal record. HUD provides further information and guidelines that should be followed on its website in an “Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions.”

Marijuana law

Proposition 64 legalized recreational marijuana use under certain requirements. However, marijuana remains a schedule 1 substance under the federal Controlled Substance Act (CSA) with no accepted medical use. The Department of Justice (DOJ) may prosecute under the CSA for the production, sale, and distribution of marijuana. One of the penalties landlords and property owners should be aware of is property forfeiture. Because of this, landlords may still prohibit marijuana use because marijuana does not come within the protections for “personal agriculture” in portable containers under Civil Code § 1940.10. Landlords should review their lease to ensure they prohibit or control marijuana use, tobacco and e-cigarettes. Landlords may wish to add a provision to their lease to prohibit plants and cultivation. Landlords who do not currently want to prohibit smoking may want to at least prohibit marijuana use.

Professional Standards Committee

Some of the highlights from the Professional Standards Committee meeting included:

  • Beginning January 1, 2017 through January 31, 2018 and for successive two (2) year periods thereafter, REALTORS® are required to complete biennial ethics training of not less than two hours and thirty minutes of instructional time. The new Code of Ethics classes will be available in the spring and will fulfill quadrennial requirements.
  • The National Association of REALTORS® (NAR) Code of Excellence has been approved. The goals of the Code of Excellence will be to work with REALTORS® to improve from the standard of “good enough” and link participation to consumer view of superior performance, thus increasing overall competence.
  • Some changes to the NAR Manual include:
    • If a member resigns/terminates membership with a pending disciplinary complaint, the complaint will still be heard but any disciplinary sanction imposed will be stayed until the member rejoins.
    • A complainant may withdraw his/her complaint up to the time a decision is made, even during the hearing.
    • Disputes between two listing brokers where no contract exists between the parties and the dispute is not specified in Article 17, Standard of Practice 17-4 are non-arbitrable.
    • Before an arbitration hearing is closed, the parties should be given an opportunity to discuss settlement amongst themselves.

Available for download in PDF.


Supra System Maintenance on Tuesday March 28th

On Tuesday March 28th starting at 8:30pm PDT and ending at 11:00pm PDT, Supra will be conducting routine maintenance at our data center.  We expect you could experience intermittent outages during the maintenance window.

 

How will Updates be Available?

 

What MAY not be Working for a short time?

  • SupraNET
  • SupraWEB (only available for update codes)
  • KIM Voice (only available for update codes)
  • Automated Phone Payments (IVR system)
  • ActiveKEY Automatic Updates
  • DisplayKEY eSYNCs
  • eKEY Syncs and Wireless Updating

 

What WILL be Working?

  • SupraWEB (update codes only)
  • KIM Voice (update codes only)

Thank you,
Supra Support Team


Sentrilock System Maintenance Notice

Dear Members,

On Tuesday, February 21st, 2017, SentriLock will be performing maintenance on its servers between the hours of 5:00 am and 6:00 am EST. This means that the system will be unavailable during this time including website, app, and the card utility. There will be no impact to data exchange by the maintenance period. If you have questions please feel free to contact support at 1-877-736-8745.

Thank you,
Sentrilock Support


Supra eKEY and iOS 10.2.1

Dear Customer,

 

Apple iOS 10.2.1

 

Apple recently released operating system iOS 10.2.1 for iPhones and iPads. We completed testing of the new iOS with the eKEY app and are happy to announce there are no issues.

 

Thank you,

Supra


December 2016 Courtside Newsletter: New Laws Affecting REALTORS®

Available for download in PDF.

BY: JOHN V. GIARDINELLI, ATTORNEY AT LAW
ASHLEY A. PLANCHON, LAW CLERK
CASEY MCINOTSH, PARALEGAL

The California Legislature has enacted several new laws that may affect REALTORS® and their practices over the next two years. This month’s Courtside Newsletter provides an overview of those laws and their potential impact.

Uniform Advertising – Assembly Bill 1650 [Effective January 1, 2018]

Under current real estate law, any solicitation materials published, circulated, or distributed by a real estate licensee performing an activity for which a real estate license is required must contain a disclosure to the effect that a real estate license is required for the activity. Furthermore, a licensee is also required to include his or her license number (and unique identifier for mortgage loan originators) on such materials that are intended to be a “first point of contact with consumers” and on real property purchase transactions in which he or she is acting as an agent.

In an attempt to create uniform standards across a variety of advertising mediums, Assembly Bill 1650 will amend Business & Professions Code § 10140.6. Effective January 1, 2018, a real estate licensee will also be required to disclose the responsible broker’s identity in addition to the licensee’s name and license number. (Again, if the licensee is a mortgage loan originator, the unique identifier must also be listed.) As defined in B&P § 10159.7, “responsible broker’s identity” means the name under which the broker is licensed by the California Bureau of Real Estate (CalBRE). The inclusion of the responsible broker’s identification number is optional.

“Solicitation materials” are materials intended to be the first point of contact with the consumer. The definition of such materials will also be redefined to include:

  • business cards;
  • stationary;
  • advertising flyers;
  • advertisements on television, in print, or electronic media;
  • “for sale,” rent, lease, “open house,” and directional signs; and
  • “other materials designed to solicit the creation of a professional relationship with a consumer.”

An exception to this rule is if the “for sale,” rent, lease, “open house,” and directional signs do either of the following:

  1. Display the responsible broker’s identity without reference to an associate broker or license; or,
  2. Display no licensee information (i.e. a generic sign).

A “refence” to an agent would be anything that names an agent in any way. It is important to note that a sign displaying no licensee information would likely be a violation of the National Association of REALTORS® (NAR) Code of Ethics Standard of Practice 12-5. (SOP 12-5 states that any advertising materials must disclose the name of the REALTOR®’s firm in a “reasonable and readily apparent manner.”)

This piece of legislation is considered to be the most important law affecting agents this session, and provides a year for all agents to become compliant.

Team Names – Senate Bill 710 [Effective August 28, 2016]

SB 710 amended Business & Professions Code § 10159.7 immediately to redefine the meaning of “responsible broker’s identity.” Previously, it had been defined as “a name and the associated license identification number under which the responsible broker is currently licensed and conducts business in general or is a substantial division of the real estate firm” (emphasis added). The Code will be amended to define it as the name or both the name and associated license identification number.

Per the California Association of REALTORS® (C.A.R.), this amendment now allows for only the responsible broker’s name to be displayed in all team name and agent-owned DBA advertising. Displaying the broker’s license number is optional. The team name and broker name must still remain equally prominent on all advertisements and first point of contact materials.

CalBRE Website Licensee Information – Assembly Bill 2330 [Effective January 1, 2018]

Currently, the CalBRE lists information regarding the status of every license issued by the Bureau pertaining to “brokers” and “salespersons.” Brokers are also required to immediately notify the Bureau when a salesperson enters into or is terminated from employment with the broker. AB 2330 will amend Business & Professions Code § 10083.2 to require CalBRE to include whether the licensee is an associate licensee. Per Civil Code § 2079.13, and associate licensee is a real estate broker or salesperson who is “either licensed under a broker or has entered into a written contract with a broker to act as the broker’s agent…and to function under the broker’s supervision…” The new statute will also require CalBRE to include whether the associate licensee is also a broker (i.e. a broker-associate), and to include information regarding the responsible broker under whom the associate licensee is acting. Responsible brokers will also be required to inform CalBRE if a broker-associate is engaged in or terminated from employment, as requirement that was missing from the previous law. This law will go into effect on January 1, 2018.

Disciplinary Action Records on CalBRE Profile – Assembly Bill 1807 [Effective January 1, 2018]

Any disciplinary action reported on a licensee’s profile on the CalBRE’s website is currently slated to remain there indefinitely. However, AB 1807 will amend Business & Professions Code § 10083.2 to allow licensees to petition CalBRE to remove the disciplinary action from the public profile. Per AB 1807, the petition will be accompanied by a fine, which will go into the Real Estate Fund, and could only be submitted at least 10 years after the violation was initially posted to CalBRE’s website. In the petition, the licensee must provide both justification for the removal and evidence of rehabilitation, which will indicate that the posting is no longer required to prevent a risk to someone utilizing the licensee in his or her capacity as a real estate agent. Review and granting of a petition is at CalBRE’s discretion, and CalBRE will also take into consideration other violations that could present a risk to the public that have arisen since the posting of the violation. There is no guarantee that the violation will be removed from the website following the submission of a petition. Licensees may begin submitting petitions January 1, 2018.

Death of Occupant Disclosure – Assembly Bill 73 [Effective September 25, 2016]

Prior to enacting AB 73, existing law merely stated that no cause of action would arise against a real property owner or agent or agent of a transferee for failure to disclose to the transferee that a death occurred upon the property or that an occupant had or died from Human T-Lymphotropic Virus Type III/Lymphadenopathy-Associated Virus. Under AB 73, Civil Code § 1710.2 was amended to clarify that the owner of a real property, his or her agent, or the agent of a transferee of a property is not required to disclose an occupant’s death on the real property if that death occurred more than three (3) years prior to the date of the offer to purchase, lease or rent the real property. Furthermore, the owner, his or her agent, or the agent of the transferee is not required to disclose that an occupant of the property was living with HIV or died from AIDS-related complications.

It should be noted that the three-years rule is not hard and fast. If a real property is particularly stigmatized and the value of the property is affected by a death that took place more than three years prior to the transaction, such a fact should be disclosed. For example, in the 1983 case of Reed v. King (145 Cal. App. 3d 261) the fact that the house was the site of a gruesome murder involving a woman and her four children ten years prior was a fact that affected the value of the home and should have been disclosed to the buyer. (It was not, hence the litigation.)

Additionally, if an occupant died from AIDS-related complications within the three years prior to the transaction, the law does not preclude the disclosure of the death. However, the owner and/or agent would not specify the manner of death, simply that it occurred on the property. An owner and/or agent is also not precluded from intentional misrepresentation. If a potential transferee asks if an occupant died on the property and the owner and/or agent has knowledge that a death occurred, he or she must answer truthfully. The C.A.R. Seller Property Questionnaire (SPQ) and the Exempt Seller Disclosure (ESD) forms cover disclosures.

This law took effect immediately on September 25, 2016, “in order to protect HIV and AIDS patients and the HIV/AIDS community from discrimination in real property transactions that may otherwise impose severe emotional distress…” Under federal law, people with HIV/AIDS are considered handicapped and protected from discrimination under the Fair Housing Act. The California Association of REALTORS® offers a Legal Q&A entitled “Disclosure of Death and AIDS” for further information regarding this topic and how it affects REALTORS®.

* * *

In an effort at brevity, not all new laws are covered here. As always, we encourage you to seek qualified legal counsel should you have any questions or concerns regarding the law and how it affects your real estate practice.

 

Available for download in PDF.


Supra eKEY and iOS 10.2

Dear Customer,

Apple iOS 10.2

 

Apple recently released operating system iOS 10.2 for iPhones and iPads. We completed testing of the new iOS with the eKEY app and are happy to announce there are no issues.

 

Thank you,

Supra