CA RE License Law

Question 1

Law requiring RE licenses for all states

Answer 1

Real Estate Act of 1919

Question 2

CA Real Estate Commissioner

Answer 2

appointed by Governor to implement/enforce CA RE laws, protect RE licensees, set admin policies

Active broker for min 5 yrs in CA

Question 3

Requirements for RE salesperson

Answer 3

1. 18+ yrs old
2. Honest/truthful
3. Apply for appropriate license with proper form
4. Pay license fee
5. Fingerprinted
6. Provide SSN or taxpayer ID to DRE
7. Complete 135 hrs of 3 courses: Real Estate Principles + Real Estate Practice + 45 hour course from set list
8. Pass 150 multiple choice exam in ⅗ hrs @ 70% or more → apply for license within 1 yr

Lawyers exempt
As of 2023, 2 hour implicit bias training

Question 4

RE license renewal cadence

Answer 4

Every 4 years

Question 5

Licenses not required for:

Answer 5

*Acting on own behalf for their own property
*Corporate officer acting on behalf of corporation or general partner on behalf of partnership
*Acting under power of attorney
*Attorney for a client
*Under court order
*Trustee under deed of trust
Real property securities transactions by employees of banks, lenders, insurance companies, credit union, etc.
*Licensed securities broker/dealer
*Cemeteries
*Performing clerical functions
*Resident managers of residential complexes
*Condo association managers who don’t rent/sell units
*Using property for photography
*Outdoor advertising companies

Question 6

Penalty for unlicensed activity

Answer 6

up to $20K fine (individual) or $60K fine (corporation) or 6 mo jail

Question 7

RE broker requirements

Answer 7

1. 18+ yrs old
2. Honest/truthful
3. Minimum 2 yrs active/full-time licensed salesperson experience within last 5 yrs
4. Pay applicable fees
5. Complete 8 required courses + 3 courses from set list
6. Pass broker’s exam

Question 8

Time brokers are required to keep documentation on record for DRE

Answer 8

3 years from transaction date

Question 9

Time required to keep mortgage loan disclosures/real property security statements on record for DRE

Answer 9

4 years from transaction date

Question 10

1st time salesperson license renewal

Answer 10

complete 45 hours of continuing education courses + consumer protection courses

Question 11

1st time broker license renewal

Answer 11

complete 6 3 hour courses + consumer protection courses

Question 12

Core 6 continued learning courses

Answer 12

1. Agency
2. Ethics
3. Fair Housing
4. Management and Supervision
5. Trust Funds
6. Risk Management

Question 13

Subsequent license renewal requirements

Answer 13

45 hours of continuing education (1 course covering 6 mandatory subjects + 18 hrs continuing education on those subjects) + 18 hours consumer protection courses

Question 14

Age exempt for license renewal requirements in CA

Answer 14

70+ years old
Must be in good standing for 30+ years

Question 15

Fictitious business name statement

Answer 15

conduct business under fake name filed with county clerk and sent to RE Commissioner + valid for 5 yrs

Question 16

goodwill

Answer 16

monetary value of established good name with customer base

Question 17

Uniform Commercial Code

Answer 17

requirements imposed on bulk sales

Question 18

Notice of Defense

Answer 18

Permits licensee to request a hearing, admit to accusation in whole/in part, present a defense, object to accusation on grounds that it is indefinite/uncertain, challenge DRE on the basis of jurisdiction, or object on grounds that compliance with the cited regulation would have resulted in the violation of another regulation

Question 19

Petition for reconsideration

Answer 19

Accused licensee requests to go back to court for admin hearing

Question 20

petition for judicial review

Answer 20

accused licensee requests to move case to state court

Question 21

informal conference

Answer 21

may follow audit, broker sits down with a DRE auditor to review corrections that should take place in the licensee’s brokerage to avoid minor errors in record keeping and procedural matters

Question 22

Blind advertising

Answer 22

Ads don’t include broker/licensee name

Question 23

Real Estate Fund

Answer 23

license fees from DRE credited by State Treasury that pays for education/research and Consumer Recovery Account

Question 24

Consumer Recovery Account

Answer 24

reimburse licensee in civil judgment/arbitration award with no funds to pay
Up to $50K for single transaction, up to $250K for losses caused by 1 licensee

Question 25

commingling

Answer 25

mixing trust funds with the broker’s personal or brokerage’s company funds

Question 26

conversion

Answer 26

converting funds to the broker’s or brokerage’s own use = theft

Question 27

Columnar record keeping system

Answer 27

3 records: trust funds received but not deposited + received and disbursed + each client/customer or transaction

Question 28

Sherman Antitrust Act

Answer 28

federal prohibition of any type of price fixing with respect to commission rates, participation in a group boycott of a competing brokerage firm, or tie-in arrangement (sell or do something on the condition that some other sale or agreement is entered into ie must only list with 1 brokerage) → restraint of trade or exclusion of other brokers