Chapter 15Licensing, Ethics, and AssociationsAcquiring and Maintaining Your License

I. California Bureau of Real Estate (CalBRE)

CalBRE Every state government regulates its own real estate

brokerage activities by staff members who are collectively referred to as REGULATORS

In California, this office is called the CALIFORNIA BUREAU OF REAL ESTATE (CalBRE)

The CalBRE is managed by the Real Estate Commissioner who sets all of the rules and regulations for the bureau

The Commissioner’s position arises out of POLICE POWER provisions of the California Constitution, under which laws beneficial to the health, safety, morals, and general welfare are enacted.

II. Real Estate License Requirements

A. Who Must Have a License? A person is required to have a license if he or

she:

B. When A License is Not Required

No license is required for the following: Employees of lending institutions Lenders making federally insured or guaranteed

loans Certain agricultural associations Person property brokers Cemetery authorities Collectors of loans made on real property Certain clerical help

C. Obtaining the 4 Year Salesperson’s License

AGE -you must be 18 years old

RESIDENCE- be legally present in the U.S.

HONESTY -be honest and truthful

EDUCATION -you must complete a college-level Real Estate Principles, Real Estate Practice, and another Real Estate elective course before taking your state exam

The salesperson’s exam (available electronically) takes 3 hours 15 minutes, has 150 questions and requires a 70% correct score to pass

D. Obtaining the Broker’s License

E. Obtaining The CalBRE Mortgage Loan Originator (MLO)

License Endorsement

F. Renewal of License

Every 4 years

Must meet required Continuing Ed requirements

45 hours of continuing ed for second and subsequent renewals

12 hours of: Ethics, Agency, Trust Fund Handling, and Fair Housing

3 hours of Risk Management & 18 hour of consumer protection, plus more hours in either consumer service or consumer protection

Prepaid Rental Listing Service License

An individual may obtain, without examination, a two-year license to conduct PRLS activities

Applicants must submit, and have approved by DRE, a contract to be entered into between the licensee and client

Fingerprints and a $2,500 bond are required for each business location

III. Real Estate Law and Regulations

A. Real Estate Commissioner

Appointed by the governor

The commissioner also does the following:

B. Enforcement of Real Estate Law

The Commissioner may, by his or her own choice, investigate the actions of any person engaged in the real estate business or acting in the capacity of a licensee with this state

C. Hearings for License Violations

A hearing is held when there is a question as to the rights of persons to obtain or keep their real estate license

If a licensee gets their license revoked, the person affected may NOT apply for reinstatement until one year has passed

D. Licenses: Revoke, Restrict, Suspend

REVOKED means to take away the license

RESTRICT means to limit the use of the license

SUSPEND means to take away the license for a period of time

Note: active licensees who are delinquent on child support payments have 150 days to pay up or have their license suspended

E. Real Estate

Bulletin

IV. Common Real Estate Law Violations

Common Violations Section 10176: Licensees violating who are not acting

within the scope of their licenses

Section 10177: Licensee not necessarily acting as a licensee

Regulations of the Commissioner: Broker Supervision

V. Real Estate General Fund

General Fund

All the money collected from license and exam fees goes into the REAL ESTATE GENERAL FUND

80% of this money is used for operating expenses of the Bureau of Real Estate

20% is set aside as follows: 8% to the Real Estate Education and Research Fund 12% to the Recovery Fund

The RECOVERY FUND was established for the payment of damages and arbitration awards to people who have suffered financial loss due to the wrongful act of a licensee in a real estate transaction

VI. Trade and Professional Associations

Real Estate Associations A LOCAL REAL ESTATE ASSOCIATION® is a

voluntary organization of real estate licensees in a particular community

The CALIFORNIA ASSOCIATION OF REALTORS® is the state division of the National Association of Realtors®

“Realtist” is the name for a member of the National Association of Real Estate Brokers (NAREB)

National Association of Hispanic Real Estate Professionals (NAHREP)

Asian Real Estate Association of America (AREAA)

Chapter Summary

• Department of Real Estate

• Real Estate License Requirements• Who must have a license?• When a license is not required• Obtaining the Salesperson’s License• Obtaining the Broker’s License• Renewal of License• Continuing Education• PRLS

• Real Estate Law & Regulations• Real Estate Commissioner• Enforcement of Real Estate Law• Hearings for License Violations• Licenses: Revoke, Restrict, Suspend• Real Estate Bulletin

• Common Real Estate Law Violations• Section 10176• Section 10177 • Broker Supervision

• Real Estate General Fund

• Trade & Professional Associations