Team Names and Fictious Business Names

This C.A.R. sponsored law provides that team names are now authorized for use under the California Business and Professions Code. The use of a team name does not require application to CalBRE for a separate license to be issued for that name. Additionally, sales agents may contract with their broker to file for and to maintain ownership of a fictitious business name, although registered with CalBRE under the name of the broker.

Team Names

  • The name is used by two or more real estate licensees
  • The name includes a licensee’s surname in conjunction with the term “associates,” “group,” or “team”
  • And the name does not include any term or terms that imply or suggest the existence of a real estate entity independent of a responsible broker.

Despite the above, a team name may still have to be recorded with the county recorder.  Advertising that contains a team name, including print or electronic media and “for sale” signage, must adhere to the following:

  • The licensee’s name and license number shall be displayed in a conspicuous manner.
  • The responsible broker’s identity shall be displayed as prominently and conspicuously as the team name.
  • The advertising material shall not contain terms that imply the existence of a real estate entity independent of the responsible broker.

Fictitious Business Names Owned by a Salesperson

This law confirms that a sales agent may maintain ownership of a fictitious business name if permitted by contract with the broker. Additionally, the broker may, by contract, permit the agent to file an application for a fictitious business name with the county clerk on the broker’s behalf, deliver to CalBRE an application signed by the broker for use of the fictitious business name, and pay for any associated fees to the county or CalBRE. Nonetheless a salesperson using a fictitious business name shall use that name only as permitted by his or her responsible broker.

Marketing and solicitation materials using a fictitious business name owned by a sales person, including business cards, print or electronic media and “for sale” signage, shall include:

  • The responsible broker’s identity in a manner equally as prominent as the fictitious business name, and
  • The salesperson’s name and license number

Assembly Bill 2018  (codified as Business and Professions Code §§10159.5, 10159.6 and 10159.7) (effective January 1, 2015).

No Shill Bidding – Auction companies must disclose bids placed on seller’s behalf and neither lender nor auction company working for a lender may require indemnification by the homeowner or listing agent as a condition of lender approval of sale

This law, on and after July 1, 2015, with respect to an auction that includes the sale of real property, prohibits a person from causing or allowing any person to bid at a sale for the sole purpose of increasing the bid on any real property being sold by the auctioneer. The law, however, does allow an auctioneer or another person to place a bid on the seller’s behalf during an auction of real property if notice, as specified, is given that liberty for that bidding is reserved. The law also requires in this regard that the person placing that bid contemporaneously disclose to all auction participants that the particular bid has been placed on behalf of the seller.

The law exempts a credit bid made by a creditor with a security interest in the property that is the subject of auction when the credit bid can result in the transfer of title to property to the creditor.

Finally, this law prohibits a lender or an auction company that is retained to control aspects of a residential real property transaction from requiring, as a condition of receiving a lender’s approval of the transaction, a homeowner or listing agent to defend or indemnify the lender or auction company from any liability alleged to result from the actions of the lender or auction company and declares a clause, provision, covenant, or agreement in violation of this prohibition to be against public policy, void, and unenforceable.

Assembly Bill 2039 (codified as Civil Code §§ 2079.23 and 1812.610) (effective July 1, 2015).

Owners in three California cities can register vacant real property to protect against squatters

This law allows an owner of residential property in the Cities of Palmdale and Lancaster in the County of Los Angeles or the City of Ukiah in the County of Mendocino, or an agent of the property owner, to register vacant real property with the local law enforcement agency and to execute, under penalty of perjury, a Declaration of Ownership of Residential Real Property.

Further, an owner or an agent of the property owner, can file the Declaration of Ownership of Residential Real Property with the local law enforcement agency of the jurisdiction in which the property is located. The property owner must post the filed declaration on the property listed in the declaration. The law requires the local law enforcement agency with which the property is registered to respond as soon as practicable after being notified that an unauthorized person has been found on the property and to take specified action, including requiring a person who is found on the property to produce written authorization to be on the property or other evidence demonstrating the person’s right to possession, and to notify any person who does not produce that authorization or other evidence that the owner or owner’s agent may seek to obtain a court order and that the person will be subject to arrest for trespass if he or she is subsequently found on the property in violation of that order.

The property owner, or an agent of the property owner, can file an action for a temporary restraining order and injunctive relief against a person who is found on the property not less than 48 hours after that person has been so notified. However, a property owner, or an agent of the property owner, who files a declaration that includes false information regarding the right to possess the property is liable to any person who, as a result of the declaration, vacates the property, for damages, as specified.

The provisions of this law apply only to 1 to 4-unit residences in the Cities of Palmdale and Lancaster in the County of Los Angeles and the City of Ukiah in the County of Mendocino. This bill would provide that its provisions would be operative until January 1, 2018.

Assembly Bill 1513 (codified as Code of Civil Procedure §§ 527.11 and 527.12).

Judgment Debtor retains equitable right to redeem real property after execution sale even beyond 90 day statutory period 

In 1982 the legislature codified the Enforcement of Judgments Law which provides that a sale of real property pursuant to execution sale regarding enforcement of judgments is absolute and may not be set aside. As a procedural safeguard, that same law states that if the sale was improper because of irregularities in the proceedings, because the property sold was not subject to execution among other reasons, the judgment debtor may commence an action within 90 days after the date of sale to set aside the sale if the purchaser at the sale is the judgment creditor.

However, the Enforcement of Judgments Law was not originally intended to affect the equitable right of redemption. This is the right that a judgment debtor has to redeem property from a sale where there may be a grossly inadequate price, or where the purchaser is guilty of unfairness or has taken undue advantage, or in other circumstances which could merit an equitable right to redeem beyond the 90 day period. This law declares that these provisions of existing law do not affect, limit, or eliminate a judgment debtor’s equitable right of redemption.

Assembly Bill 2317 (codified as Code of Civil Procedure §701.680) (effective January 1, 2015).

Security Deposits  – Landlords and tenants may agree to use electronic communications regarding the security deposit generally. Delivery of the itemization of deposit still requires “personal receipt” or by mail.

This omnibus law, among other things, permits landlords and tenants to agree to the use of electronic communications for some notices and agreements pertaining to the establishment and handling of security deposits, including the Notice of Right to Inspection Prior to Termination of Tenancy (C.A.R. form NRI). Nonetheless, handling of the security deposit law itself, Civil Code § 1950.5, requires that the itemization of the security deposit and notice to the tenant of its disposition must still be made be either personal delivery or first class mail.  This law may potentially impact the use of electronic signatures for lease agreements.

Assembly Bill 2747 (relevant section codified as Civil Code §1633.3) (effective January 1, 2015).

Seller/Borrower has right to request suspension of HELOC during escrow

Presently, if a borrower has a home equity line of credit (HELOC) secured by a lien on his or her house, the HELOC loan is supposed to be closed and not drawn on during the sale or refinancing of the house. If the lender fails to close the HELOC during escrow and money is drawn on, the underlying lien and loan may become the debt of the innocent buyer.

This law facilitates the seller’s/borrower’s request to suspend the HELOC by creating a form for the seller/borrower to sign in escrow, the ultimate purpose being to avoid the mistake of drawing upon a HELOC during the escrow or immediately following the sale of the house.

Assembly Bill 1770 codified as Civil Code §2943.1. Effective on July 1, 2015 to remain in effect only through July 1, 2019.

Employers required to provide their employees paid sick leave

This law enacts the Healthy Workplaces, Healthy Families Act of 2014 to provide that an employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days for prescribed purposes, to be accrued at a rate of no less than one hour for every 30 hours worked. An employee is entitled to use accrued sick days beginning on the 90th day of employment. It authorizes an employer to limit an employee’s use of paid sick days to 24 hours or 3 days in each year of employment, and prohibits an employer from discriminating or retaliating against an employee who requests paid sick days. This law requires employers to satisfy specified posting and notice and recordkeeping requirements.

It also authorizes the Labor Commissioner to impose specified administrative fines for violations and would authorize the commissioner or the Attorney General to recover specified civil penalties against an offender who violated these provisions on behalf of the aggrieved, as well as attorney’s fees, costs, and interest.

Assembly Bill 1522 (codified as §§245 et seq. and 2810.5 of the Labor Code) (effective January 1, 2015).

Employers’ training and education of supervisory employees regarding sexual harassment must include prevention of abusive conduct. This law applies to employers who employ 50 or more employees with persons providing services pursuant to contract as “employees” – a definition which may include agents.

Existing law requires employers, as defined, with 50 or more employees to provide at least 2 hours of training and education regarding sexual harassment to all supervisory employees, as specified. Existing law requires each employer to provide that training and education to each supervisory employee once every 2 years.

This law additionally requires that the above-described training and education include, as a component of the training and education, prevention of abusive conduct, as defined.

For purposes of this law only, “employer” means any person regularly employing 50 or more persons or regularly receiving the services of 50 or more persons providing services pursuant to a contract, or any person acting as an agent of an employer, directly or indirectly, the state, or any political or civil subdivision of the state, and cities.

Assembly Bill 2053 (codified Government Code §12950.1) (effective January 1, 2015).

Licensing – Criminal Conviction

This law prohibits boards and bureaus within the Department of Consumer Affairs, which includes CalBRE, from denying a professional license to an applicant based solely on a prior conviction that was dismissed by a court either because the individual completed the terms of his or her sentence without committing any additional offenses or because a dismissal would serve the interests of justice. Obtaining an order of dismissal in this way is referred to as expungement which may be granted upon petition to a person who successfully serves and completes all the terms of their sentence including payment of restitution and fines. Expungement is not available to persons who were sentenced to prison or who committed certain sex or other offenses.

Assembly Bill 2396 (codified as Business and Professions Code §480) (effective January 1, 2015).

Licensing – Citizenship or Immigration Status

This law prohibits CalBRE (amongst other licensing boards under the Department of Consumer Affairs) from denying a license based on citizenship or immigration status. It also requires the applicant to provide an individual taxpayer identification number or a social security number for an initial or renewal license.

Senate Bill 1159 (amending §§ 30,  2103, 2111, 2112, 2113, 2115, 3624, and 6533 of, and adding § 135.5 to, the Business and Professions Code, amending § 17520 of the Family Code, and amending § 19528 of the Revenue and Taxation Code) (effective January 1, 2015).

HOAs and landlords must permit personal agriculture

Existing law regulates the terms and conditions of residential tenancies, and prohibits a landlord from interfering with a tenant’s quiet enjoyment of the premises. This law requires a landlord to permit a tenant to participate in personal agriculture in portable containers approved by the landlord in the tenant’s private area if certain conditions are met.

Existing law, the Davis-Stirling Common Interest Development Act, defines and regulates common interest developments and authorizes the board of directors of the association that manages the development to adopt and amend the operating rules for the development. This law makes void any provision of a governing document of a common interest development that effectively prohibits or unreasonably restricts the use of a homeowner’s backyard for personal agriculture.

Assembly Bill 2561, (codified as Civil Code §§ 1940.10 and 4750 to the Civil Code) (effective January 1, 2015).

HOAs prohibited from fining members for reducing water use

This law prohibits a homeowner’s association from imposing a fine or assessment against a member who reduces or eliminates watering of vegetation or lawns during any period during which the Governor or local government has declared an emergency due to drought. In January of 2014 Governor Brown declared a State of Emergency to exist in California due to severe drought conditions.

Assembly Bill 2100 (codified as Civil Code §4735) (effective July 21, 2014).

Emergency regulation restricting use of water for outdoor landscapes adopted by State Water Resources Control Board

In January of 2014 Governor Brown declared a State of Emergency to exist in California due to severe drought conditions. Since then, other executive orders by the Governor cleared the way for the state water board’s adoption of emergency regulations to prevent the waste, unreasonable use, unreasonable method of use, or unreasonable method of diversion of water, to promote water recycling or water conservation.

On July 15, the state water board adopted emergency regulations restricting water use for outdoor landscapes. The regulations prohibit using potable water outdoors, such as watering your lawn, in a manner that results in runoff water on sidewalks, driveways, roadways and your neighbor’s property; washing a car with a hose unless the hose is fitted with a shut-off nozzle; watering down your driveway and sidewalk; and using water in a decorative fountain unless it recirculates. Violation of the regulations is an infraction and may result in a fine of up to $500 for each day the violation occurs.

C.A.R.’s form “Statewide Buyer and Seller Advisory” (SBSA) (an optional disclosure form) advises potential buyers of the possibility of governmental limitations on the amount of water available to the property, restrictions on the use of water, and an increasingly graduated cost per unit of water use, including penalties for excess usage.

Article 22.5 Drought Emergency Water Conservation §864 (effective July 15, 2014).

Energy Use Disclosure (Assembly Bill 1103) Requirements for Commercial Property: Compliance On or after July 1, 2014 total gross square foot area measuring 5,000 square feet up to 10,000 square feet delayed to July 1, 2016

The sale or lease of commercial property meeting certain square footage measurements requires the delivery of energy use disclosure to the prospective buyer or tenant. The disclosure trigger was to become effective for the sale of lease or commercial property measuring between 5,000 and 10,000 square feet on July 1, 2014.  The California Energy Commission amended subdivision (c) of section 1682 of title 20 of the California Code of Regulations as an emergency regulatory action to change the effective date from July 1,2014 to July 1,2016 when the disclosure requirements of Public Resources Code section 25402.10 apply for a nonresidential building with a total gross square foot area measuring 5,000 square feet up to 10,000 square feet. The Office of Administrative Law approves this emergency regulatory action pursuant to sections 11346.1 and 11349.6 of the Government Code.

This emergency regulatory action became effective on 9/2/2014 and will expire on 3/3/2015.

Expanded educational requirements for certain mortgage loan originators (MLOs)

This law does not change the education requirements for applicants of CalBRE-issued MLO licenses. It only applies to agents licensed under the California Finance Lenders Act and the California Residential Mortgage Licensing Act. For those agents it requires completion of an additional two hours of approved education related to relevant California law as part of pre-license education or continuing education.

Senate Bill 1459 (codified as Financial Code §§22109.2, 22109.3, 22109.5, 50142, 50143 and 50145) (effective January 1, 2015).

Los Angeles County – separate notification of notice of default or sale sent by county recorder as anti-fraud measure

This law is specific to Los Angeles County. It extends to 2020 a previous measure that directs the L.A. County recorder to notify by mail the owner of a property and the occupants or tenants of a notice of default or a notice of sale.  Notices of default and notices of sale are already required to be mailed to the property owner and posted under state law, so this additional notice may appear redundant. However, the intent of this law is to alert an owner to potential fraud, since someone recording fraudulent notices of default or sale would likely not mail out the state-law mandated notice of default or sale.

Senate Bill 827 (codified as Government Code §§27297.6 and 27387.1) (effective January 1, 2015).

California Red-Legged frog declared state amphibian

This law designates the California red-legged frog as the “State Amphibian.”  Presently, the frog is subject to protection under both federal and state laws passed in 1996. Additionally, in 2010 the US Fish and Wildlife Service announced 1,600,000 acres of protected land as a critical habitat for the species throughout California which has implications regarding development and use of such land. Although the designation does not provide any further legal protection to the frog as a threatened species, it does highlight the importance that California places on the frog’s preservation.

Assembly Bill 2364 (codified as Government Code §422.7) (effective January 1, 2015).