California Assembly Bill AB764 Introduced / Bill

 BILL NUMBER: AB 764INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Nava FEBRUARY 26, 2009 An act to amend Sections 10085 and 10085.5 of the Business and Professions Code, relating to real estate brokers. LEGISLATIVE COUNSEL'S DIGEST AB 764, as introduced, Nava. Real estate brokers. The Real Estate Law provides for the regulation and licensure of real estate brokers and real estate salespersons by the Real Estate Commissioner. Existing law authorizes the commissioner to require that materials used in obtaining advance fee agreements be submitted to him or her at least 10 calendar days before the materials are used. Existing law authorizes the commissioner to determine the form of the advance fee agreements. This bill would instead require the commissioner to determine the form of advance fee agreements and to mandate the submission of advance fee agreement materials prior to their use. The Real Estate Law makes it unlawful for any person to claim, demand, charge, receive, collect, or contract for an advance fee for soliciting lenders on behalf of borrowers or performing services for borrowers in connection with a mortgage loan before the borrower becomes obligated to complete the loan and for performing any other activity for which a license is required, unless the person is a licensed real estate broker and has complied with the provisions of the Real Estate Law. A violation of that provision constitutes a public offense punishable by a fine of up to $10,000 for an individual or $50,000 for a corporation. This bill would increase those fines to $20,000 and $60,000, respectively. The bill would also make it unlawful for any person to claim, demand, charge, receive, collect, or contract for any fee for performing services for borrowers in connection with the modification of the terms of a mortgage loan, unless the person is a licensed real estate broker. By creating a new crime, the bill would impose a state-mandated local program. 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. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 10085 of the Business and Professions Code is amended to read: 10085. The commissioner  may   shall  require that any or all materials used in obtaining advance fee agreements, including but not limited to the contract forms, letters or cards used to solicit prospective sellers, and radio and television advertising be submitted to him or her at least 10 calendar days before they are used. Should the commissioner determine that any such matter, when used alone or with any other matter, would tend to mislead  ,  he or she may, within 10 calendar days of the date he or she receives same, order that it not be used, disseminated, nor published. Any person using, disseminating, or publishing any matter  which   that  the commissioner has ordered, pursuant to this section, not to be used, published, or disseminated shall be guilty of a misdemeanor punishable by a fine not exceeding one thousand dollars ($1,000) or by imprisonment in the county jail not exceeding six months, or both, for each  such  use, dissemination, or publication. The commissioner  may   shall  determine the form of the advance fee agreements, and all material used in soliciting prospective owners and sellers shall be used in the form and manner which he or she determines is necessary to carry out the purposes and intent of this part. Any violation of any of the provisions of this part or of the rules, regulations, orders or requirements of the commissioner thereunder shall constitute grounds for disciplinary action against a licensee, or for proceedings under Section 10081  of this code  , or both. These sanctions are in addition to the criminal proceedings hereinbefore provided. SEC. 2. Section 10085.5 of the Business and Professions Code is amended to read: 10085.5. (a) It shall be unlawful for any person to claim, demand, charge, receive, collect, or contract for an advance fee (1) for soliciting lenders on behalf of borrowers or performing services for borrowers in connection with loans to be secured directly or collaterally by a lien on real property, before the borrower becomes obligated to complete the loan or, (2) for performing any other activities for which a license is required, unless the person is a licensed real estate broker and has complied with the provisions of this part.  (b) It shall be unlawful for any person to claim, demand, charge, receive, collect, or contract for any fee for performing services for borrowers in connection with the modification of the terms of a loan secured directly or collaterally by a lien on single-family residential real property, unless the person is a licensed real estate broker.   (b)   (c)  This section does not prohibit the acceptance or receipt of  an advance   any  fee by  any   a bank, savings association, credit union, industrial loan company, or person acting within the scope of a license issued to that person pursuant to Division 9 (commencing with Section 22000) of the Financial Code, in connection with loans to be secured directly or collaterally by a lien on real property  or in connection with the modification of the terms of a loan secured directly or collaterally by a lien on single-family residential real property  . This section does not apply to charges made by title insurers and controlled escrow companies pursuant to Chapter 1 (commencing with Section 12340) of Part 6 of Division 2 of the Insurance Code.  (c)   (d)  A violation of this section is a public offense punishable by a fine not exceeding  ten   twenty  thousand dollars  ($10,000)   ($20,000)  , by imprisonment in the county jail for a term not to exceed six months, or by both that fine and imprisonment, or if by a corporation, the violation is punishable by a fine not exceeding  fifty   sixty  thousand dollars  ($50,000)   ($60,000)  . SEC. 3. 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.