Senate BillChaptered/SignedBusiness and Professions
SB 774: Department of Real Estate and the Bureau of Real Estate Appraisers: Bureau of Automotive Repair.
What SB 774 does, verified December 8, 2025
The bill aims to extend the effective date of provisions related to the registration and regulation of automotive repair dealers by the Bureau of Automotive Repair in the Department of Consumer Affairs. This extension will impose a state-mandated local program. The bill also extends the review period for the Department of Real Estate and the Bureau of Real Estate Appraisers until January 1, 2030. It adds conforming provisions to the Real Estate Law and requires the Department of Real Estate to compile information on military, veteran, and spouse licensure. The bill requires the Department of Real Estate to submit fingerprint images and related information to the Department of Justice for certain applicants and licensees. It also specifies that a licensee's email address is not considered a public record subject to disclosure under the California Public Records Act. The bill authorizes t…
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Last action: Chaptered by Secretary of State. Chapter 786, Statutes of 2025. (2025-10-13)Alert me
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| Oct. 13, 2025 | Chaptered by Secretary of State. Chapter 786, Statutes of 2025. |
| Oct. 13, 2025 | Approved by the Governor. |
| Sep. 23, 2025 | Enrolled and presented to the Governor at 2 p.m. |
| Sep. 12, 2025 | Assembly amendments concurred in. (Ayes 37. Noes 0. Page 2998.) Ordered to engrossing and enrolling. |
| Sep. 12, 2025 | In Senate. Concurrence in Assembly amendments pending. |
Latest bill textChaptered version, October 13, 2025 · 17,227 words
Senate Bill No. 774
CHAPTER 786
An act to amend Sections 9882, 10050, 10071, 10073, 10078, 10082, 10151, 10151.2, 10151.3, 10153, 10153.2, 10153.5, 10156.2, 10156.6, 10156.7, 10162, 10167.4, 10170.5, 10471.1, 10471.4, 10471.5, 10472, 10473.1, 10475, 11001, 11301, 11411, and 11412 of, to add Sections 10152.5, 10167.45, 11411.5, 11412.2, 11413, 11413.1, 11413.2, 11413.3, 11413.4, 11414, 11414.1, 11414.2, 11415, 11415.1, 11416, 11417, 11417.1, 11417.2, 11417.3, 11417.4, 11417.5, 11417.6, 11417.7, 11418, 11418.1, 11418.2, 11418.3, 11418.4, 11419, 11419.1, 11419.2, 11419.3, and 11420 to, to add and repeal Section 11425 of, to repeal Section 10153.4 of, to repeal Chapter 8 (commencing with Section 11410) of Part 3 of Division 4 of, and to repeal, add, and repeal Section 10153.3 of, the Business and Professions Code, relating to professions and vocations, and making an appropriation therefor.
[ Approved by Governor October 13, 2025. Filed with Secretary of State October 13, 2025. ]
LEGISLATIVE COUNSEL'S DIGEST
SB 774, Ashby. Department of Real Estate and the Bureau of Real Estate Appraisers: Bureau of Automotive Repair.
Existing law, the Automotive Repair Act, provides for the registration and regulation of automotive repair dealers by the Bureau of Automotive Repair in the Department of Consumer Affairs. A violation of these provisions is a misdemeanor unless otherwise specified. Existing law authorizes the Director of Consumer Affairs to adopt and enforce those rules and regulations that the director determines are reasonably necessary to carry out the purposes of the act and declare the policy of the bureau. Existing law authorizes the director to include in the citation system a process for informal review of and recommendation on citations, as specified. Existing law subjects the bureau to review by the appropriate policy committees of the Legislature, as specified, and requires that review to be performed as if the act were scheduled to be repealed on January 1, 2028.
Existing law authorizes the director to include in the citation system a process for an automotive repair dealer to prevent disclosure of the citation on the internet, as specified and subject to a certain eligibility requirement. Existing law also authorizes the bureau to require any employee of the automotive repair dealer who was involved in the violation resulting in the bureau’s issuance of the citation to attend remedial training with the automotive repair dealer to prevent disclosure of the citation. Existing law repeals these provisions on July 1, 2026.
This bill would extend the effective date of these provisions until January 1, 2028. By extending these provisions, the violation of which is a crime, this bill would impose a state-mandated local program.
The Real Estate Law establishes the Department of Real Estate in the Business, Consumer Services, and Housing Agency to license and regulate real estate licensees under that law, including real estate brokers and real estate salespersons. The Real Estate Appraisers’ Licensing and Certification Law establishes within the Department of Consumer Affairs the Bureau of Real Estate Appraisers to license and regulate real estate appraisers. Under existing law, the powers and duties of the Department of Real Estate and the Bureau of Real Estate Appraisers under those laws, respectively, are subject to review by the appropriate policy committees of the Legislature as if those laws were to be repealed on January 1, 2026.
This bill would extend that date to January 1, 2030.
Existing law requires the department to register a service member or spouse of a service member who relocated to this state because of military orders for military service within this state and who holds a professional license in good standing outside of California, subject to satisfaction of specified requirements, and deems the person to be a licensee of the department for specified purposes.
This bill would add conforming provisions to the Real Estate Law.
Existing law requires the department to compile information on military, veteran, and spouse licensure and submit an annual report to the Legislature and specifies the information required to be included in the report.
This bill would require additional information to be included in the report, including the number of applicants who requested to apply military education, training, or experience towards meeting licensure requirements. The bill would require the department, in every application for licensure, to inquire as to whether the applicant is serving or has served in the military and whether the applicant intends to apply military experience and training toward licensure requirements. The bill would require the department to post specified information on the department’s internet website about applying military experience and training toward licensure requirements.
This bill would delete obsolete provisions relating to applications for licensure received by the commissioner before October 1, 2007. The bill would deem a salesperson license issued to an applicant who applied before October 1, 2007, whose license was suspended for failing to satisfy specified requirements to be deemed expired 4 years following the date of issuance of the license. The bill would make conforming changes.
Existing law requires a fingerprint-based criminal history information check required by statute to be requested from the Department of Justice and to be applicable to the person identified in the referencing statute. Existing law also requires the agency or entity identified in the statute to submit to the Department of Justice fingerprint images and related information required by the Department of Justice of the types of applicants identified in the referencing statute, for the purpose of obtaining certain conviction and arrest information. Existing law requires the department to disseminate certain criminal history information when certain conditions are met, including that the information is to be used for employment, licensing, or certification purposes.
This bill would require the Department of Real Estate to submit to the Department of Justice fingerprint images and related information required by the Department of Justice for certain applicants and licensees, as specified. The bill would also require the Department of Justice to provide a state- or federal-level response pursuant to the above-described criminal history information dissemination provisions.
Existing law requires every real estate broker and salesperson licensee to provide their current email address to the commissioner.
This bill would specify that a licensee’s email address shall not be considered a public record subject to disclosure under the California Public Records Act. The bill would specify that information sent from an email account to a valid email address provided by the applicant or licensee is presumed to have been delivered to the email address provided.
Existing law authorizes the Real Estate Commissioner to require proof as they may deem advisable concerning the honesty and truthfulness of certain applicants for a license, designated agents, and others, as specified, before authorizing the issuance of a license for a location. Existing law also authorizes the commissioner to hold a hearing and to refuse to issue a license to an applicant who does not furnish satisfactory proof of their honesty and truthfulness or of the honesty and truthfulness of the corporate officers, directors, and shareholders. To assist in this determination, existing law requires the fingerprinting of every original applicant, including designated agents, officers, directors, and persons owning 25 percent or more of the shares of the corporate applicant.
This bill would also require, for that purpose, the fingerprinting of persons owning or controlling a beneficial ownership interest of 25 percent or more in the entity making application.
Existing law establishes, within the Real Estate Fund, a Consumer Recovery Account, which is funded by fees and fines imposed on licensees. Existing law authorizes an aggrieved person to file an application with the department for payment from the Consumer Recovery Account for the unpaid amount of a final judgment or an arbitration award that the aggrieved person has obtained against a defendant for fraud, misrepresentation, or deceit, made with intent to defraud, or conversion of trust funds, arising out of a transaction in which the defendant, while licensed, performed acts for which a license was required. Existing law specifies that all matters finally adjudicated in the underlying action are conclusive as to the judgment debtor and applicant in the proceeding against the Consumer Recovery Account. Existing law requires the claimant to serve a notice to the judgment debtor with a specified statement, and requires the commissioner to give notice of a decision rendered with respect to the application to the claimant and judgment debtor that contains a specified statement relating to denial or payment of the claim. Existing law provides that the license of the broker, salesperson, or prepaid rental listing service license shall be automatically suspended upon the date of payment from the Consumer Recovery Account.
This bill would instead specify that all matters finally adjudicated in the underlying action are conclusive if the final judgment was established by proof by clear and convincing evidence or the commissioner determined that the applicant provided clear and convincing evidence of the judgment debtor’s fraud, misrepresentation, deceit, or conversion of trust funds. The bill would authorize the commissioner to grant payment on an application if the final judgment was established by proof by preponderance of the evidence or a higher standard of proof. Under the bill, the above-described requirement for the automatic suspension of the license upon the date of payment from the Consumer Recovery Account would be conditioned on the final judgment being established by proof by clear and convincing evidence or the commissioner determining that the claimant provided clear and convincing evidence of the fraud, misrepresentation, deceit, or conversion of trust funds. The bill would revise the statements in the notices specified above, including revising the statement on the notice required to be given by the commission after the decision rendered, depending on whether the decision includes suspension of the judgment debtor’s license.
Existing law establishes the Real Estate Appraisers Regulation Fund, consisting of moneys raised by fees and assessments imposed pursuant to the Real Estate Appraisers’ Licensing and Certification Law. Existing law further establishes within that fund the Administration Account and the Recovery Account and requires 5% of the amount of any license or certificate fee under the Real Estate Appraisers’ Licensing and Certification Law to be credited to the Recovery Account, a continuously appropriated fund. Existing law requires the Bureau of Real Estate Appraisers to adopt regulations for the administration of the Recovery Account relating to claims, funding, and administrative procedures, as specified.
This bill would repeal the provisions providing for the adoption of regulations and would instead enact provisions relating to claims, funding, and the administration of the Recovery Account. The bill, among other things, would establish eligibility, application, and notice requirements and procedures for the bureau’s consideration and investigation of applications. The bill would authorize the bureau to transfer funds between the Administration Account and the Recovery Account under specified circumstances. By authorizing the transfer of funds into a continuously appropriated fund, the bill would make an appropriation. The bill would require a real estate appraiser’s license to be automatically suspended upon payment from the Recovery Account of a settlement of a claim or toward satisfaction of a judgment based on clear and convincing evidence of fraud, misrepresentation, or deceit with intent to defraud. The bill would require a claimant who is an electronic filer who signs the application using an electronic signature to declare under penalty of perjury that the information submitted is true and correct, and would make it a misdemeanor for a person to file documents with false information. By expanding the crime of perjury and creating a new crime, the bill would impose a state-mandated local program. The bill would repeal all of the provisions relating to the Real Estate Appraisers Regulation Fund on January 1, 2030.
This bill would require the Bureau of Real Estate Appraisers, on and after July 1, 2026, to post specified information about the Recovery Account on the bureau’s internet website, including eligibility requirements and the application process. The bill would require the bureau, upon receipt of a complaint by a licensee or a member of the public, to provide a notification to the complainant that includes information regarding eligibility and the application process. The bill would require the bureau, on or before January 1, 2027, and annually thereafter, to submit to the Legislature a report that includes specified information relating to the Recovery Account, including the balance of the account for the prior fiscal year and the total payments made from the Recovery Account.
This bill would require the bureau to conduct a study on the feasibility of mandatory licensing for real estate appraisers in California and to report its findings to the appropriate committees of the Legislature on or before December 31, 2028. The bill would require the report to include, among other things, the types of real estate appraisal assignments for which a license is currently not required in California and the bureau’s recommendations on specified matters, including recommended amendments to existing law. The bill would repeal those provisions on January 1, 2030.
The bill would make other conforming and technical changes to various provisions of the Real Estate Law, including eliminating gendered pronouns and updating cross-references.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
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.
The people of the State of California do enact as follows:
SECTION 1.
Section 9882 of the Business and Professions Code, as amended by Section 4 of Chapter 681 of the Statutes of 2023, is amended to read:9882.
(a) (1) There is in the Department of Consumer Affairs a Bureau of Automotive Repair under the supervision and control of the director. The duty of enforcing and administering this chapter is vested in the chief who is responsible to the director. The director may adopt and enforce those rules and regulations that the director determines are reasonably necessary to carry out the purposes of this chapter and declare the policy of the bureau, including a system for the issuance of citations for violations of this chapter as specified in Section 125.9.(2) (A) On or after July 1, 2023, the director may include in the citation system a process for informal review of and recommendation on citations, including establishment of an informal citation conference conducted by a panel of independent representatives appointed by the chief. The informal citation conference panel shall consist of three members, with one representative each from the bureau, the public, and the automotive repair industry.
(B) (i) The director may include in the citation system a process for an automotive repair dealer, upon successful completion of remedial training conducted by a provider certified pursuant to subdivision (d) of Section 9884.7, to prevent disclosure of the citation on the internet as provided in Section 27.
(ii) To be eligible for citation nondisclosure under this subparagraph, the automotive repair dealer shall not have attended remedial training in the prior 18-month period from the effective date of citation.
(iii) Any employee of the automotive repair dealer who was involved in the violation resulting in the bureau’s issuance of the citation also may be required by the bureau to attend remedial training with the automotive repair dealer to prevent disclosure of the citation.
(3) Rules and regulations adopted pursuant to this subdivision shall be adopted pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(b) Notwithstanding any other law, the powers and duties of the bureau, as set forth in this article and under the Automotive Repair Act, shall be subject to review by the appropriate policy committees of the Legislature. In that review, the bureau shall have the burden of demonstrating a compelling public need for the continued existence of the bureau and its regulatory program, and that its function is the least restrictive regulation consistent with the public health, safety, and welfare.
(c) This section shall be effective only until January 1, 2028, and as of that date is repealed.
SEC. 2.
Section 9882 of the Business and Professions Code, as amended by Section 5 of Chapter 681 of the Statutes of 2023, is amended to read:9882.
(a) (1) There is in the Department of Consumer Affairs a Bureau of Automotive Repair under the supervision and control of the director. The duty of enforcing and administering this chapter is vested in the chief who is responsible to the director. The director may adopt and enforce those rules and regulations that the director determines are reasonably necessary to carry out the purposes of this chapter and declare the policy of the bureau, including a system for the issuance of citations for violations of this chapter as specified in Section 125.9.(2) The director may include in the citation system a process for informal review of and recommendation on citations, including establishment of an informal citation conference conducted by a panel of independent representatives appointed by the chief. The informal citation conference panel shall consist of three members, with one representative each from the bureau, the public, and the automotive repair industry.
(3) Rules and regulations adopted pursuant to this subdivision shall be adopted pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(b) This section shall become operative on January 1, 2028.
SEC. 3.
Section 10050 of the Business and Professions Code is amended to read:10050.
(a) (1) There is in the Business, Consumer Services, and Housing Agency a Department of Real Estate, the chief officer of which department is named the Real Estate Commissioner.(2) Notwithstanding any other law, the powers and duties of the department, as set forth in this part and Chapter 1 (commencing with Section 11000) of Part 2, shall be subject to review by the appropriate policy committees of the Legislature. The review shall be performed as if this part and that chapter were scheduled to be repealed as of January 1, 2030.
(b) It shall be the principal responsibility of the commissioner to enforce all laws in this part and Chapter 1 (commencing with Section 11000) of Part 2 in a manner that achieves the maximum protection for the buyers of real property and those persons dealing with real estate licensees.
(c) Wherever the term “commissioner” is used in this division, it means the Real Estate Commissioner.
SEC. 4.
Section 10071 of the Business and Professions Code is amended to read:10071.
The commissioner shall enforce the provisions of this part and of Chapter 1 (commencing with Section 11000) of Part 2. The commissioner has full power to regulate and control the issuance and revocation, both temporary and permanent, of all licenses to be issued under the provisions of this part, and to perform all other acts and duties provided in this part and Chapter 1 (commencing with Section 11000) of Part 2 and necessary for their enforcement.SEC. 5.
Section 10073 of the Business and Professions Code is amended to read:10073.
The commissioner shall employ deputies, clerks, and employees as needed to discharge in the proper manner the duties imposed upon the commissioner by law.SEC. 6.
Section 10078 of the Business and Professions Code is amended to read:10078.
(a) The commissioner shall adopt a seal with the words “Real Estate Commissioner State of California” and any other device as the commissioner may desire engraved thereon, by which the commissioner shall authenticate the proceedings of their office.(b) Copies of all records and papers in the office of the commissioner certified under the hand and seal of the commissioner shall be received in evidence in all cases equally and with like effect as the originals.
SEC. 7.
Section 10082 of the Business and Professions Code is amended to read:10082.
The commissioner may publish or cause to be published at appropriate intervals a directory or list of licensed brokers and salespersons and may publish therewith any matter as the commissioner may deem pertinent to this part and Chapter 1 (commencing with Section 11000) of Part 2. The commissioner shall furnish one copy of the directory to each licensed broker upon request and payment of an appropriate charge based upon the cost of publication. The directory may contain copies of this part and Chapter 1 (commencing with Section 11000) of Part 2 and the rules and regulations of the commissioner.SEC. 8.
Section 10151 of the Business and Professions Code is amended to read:10151.
(a) Application for the real estate salesperson license examination shall be made in writing to the commissioner. The commissioner may prescribe the format and content of the salesperson examination application. The application for the salesperson examination shall include valid contact information at which the department may contact the applicant and shall be accompanied by the real estate salesperson license examination fee.(b) Persons who have been notified by the commissioner that they passed the real estate salesperson license examination may apply for a real estate salesperson license. A person applying for the salesperson examination may also apply for a real estate salesperson license. However, a license shall not be issued until the applicant passes the real estate salesperson license examination. If there is any change to the information contained in a real estate salesperson license application after the application has been submitted and before the license has been issued, the commissioner may require the applicant to submit a supplement to the application listing the changed information.
(c) (1) The commissioner may prescribe the format and content of the real estate salesperson license application. The application for the real estate salesperson license shall include valid contact information at which the department may contact the applicant.
(2) An application for the real estate salesperson license examination or for both the examination and license shall include evidence or certification, satisfactory to the commissioner, of successful completion at an accredited institution of a three-semester unit course, or the quarter equivalent thereof, or successful completion of an equivalent course of study as defined in Section 10153.5 in real estate principles as well as the successful completion at an accredited institution of a course in real estate practice as set forth in Section 10153.2, and one additional course as set forth in Section 10153.2, other than real estate principles, real estate practice, advanced legal aspects of real estate, advanced real estate finance, or advanced real estate appraisal. The applicant shall provide this evidence or certification to the commissioner prior to taking the real estate salesperson license examination.
(d) The commissioner shall waive the requirements of this section for the following applicants:
(1) An applicant who is a member of the State Bar of California.
(2) An applicant who has qualified to take the examination for an original real estate broker license by satisfying the requirements of Section 10153.2.
(e) Application for endorsement to act as a mortgage loan originator, as defined in Section 10166.01, shall be made either electronically or in writing as directed by the commissioner. The commissioner may prescribe the format and the content of the mortgage loan originator endorsement application, which shall meet the minimum requirements for licensing of a mortgage loan originator, pursuant to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).
SEC. 9.
Section 10151.2 of the Business and Professions Code is amended to read:10151.2.
(a) For purposes of this section, “member of the Armed Forces of the United States” includes the following persons and no others: all members of the United States Army, the United States Navy, the United States Air Force, the United States Space Force, the Marine Corps, the Merchant Marine in time of war, the Coast Guard, the National Guard, and all officers of the Public Health Service detailed by proper authority for duty either with the Army or the Navy.(b) The commissioner shall inquire in every application for licensure under this part if the individual applying for licensure:
(1) Is, or previously was, a member of the Armed Forces of the United States.
(2) Intends to apply military experience towards broker licensure requirements.
(c) The commissioner shall expedite, and may assist, the initial licensure process for an applicant who supplies satisfactory evidence to the department that the applicant has served as an active duty member of the Armed Forces of the United States and was honorably discharged.
(d) The commissioner shall expedite the licensure process for an applicant who meets both of the following requirements:
(1) Supplies evidence satisfactory to the commissioner that the applicant is married to, or in a domestic partnership or other legal union with, an active duty member of the Armed Forces of the United States who is assigned to a duty station in this state under official active duty military orders.
(2) Holds a current license in another state, district, or territory of the United States in the profession or vocation for which the applicant seeks a license from the commissioner.
(e) As required by Section 115.10, the commissioner shall register applicants who are military service members or spouses of service members. Pursuant to subdivision (e) of Section 115.10, a person registered shall be deemed to be a licensee of the department for purposes of the laws administered by the department relating to standards of practice, discipline, and continuing education for the duration of the military orders described in paragraph (2) of subdivision (b) of Section 115.10, and the registration shall expire when those military orders expire. Pursuant to subdivision (f) of Section 115.10, the commissioner may take appropriate enforcement action against a person registered, including, but not limited to, revoking or suspending the registration of a person who does not meet the requirements of subdivision (b) of Section 115.10 or the laws applicable to licensees. This subdivision is declaratory of existing law.
(f) The commissioner shall post information on the department’s internet website about the ability of applicants who have served as members of the Armed Forces of the United States to apply military experience towards broker licensure requirements.
SEC. 10.
Section 10151.3 of the Business and Professions Code is amended to read:10151.3.
The Department of Real Estate shall compile information on military, veteran, and spouse licensure into an annual report for the Legislature, which shall be submitted in conformance with Section 9795 of the Government Code. The report shall include all of the following:(a) The number of applications for expedited licenses submitted by veterans and active duty spouses pursuant to subdivisions (c) and (d) of Section 10151.2.
(b) The number of licenses issued and denied per calendar year pursuant to subdivisions (c) and (d) of Section 10151.2.
(c) The average length of time between application and issuance of licenses pursuant to subdivisions (c) and (d) of Section 10151.2 per license type.
(d) The number of applicants for a broker license who request to apply military experience towards meeting licensure requirements.
(e) The number of applicants for a broker license whose military experience was accepted by the department to meet licensure requirements.
SEC. 11.
Section 10152.5 is added to the Business and Professions Code, to read:10152.5.
(a) Pursuant to subdivision (u) of Section 11105 of the Penal Code, the department shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice for all of the following:(1) Original applicants for a salesperson license, pursuant to Section 10151.
(2) Original applicants for a broker license, pursuant to Section 10150.
(3) Persons seeking to be designated as the officer of a broker who is a corporation, pursuant to Section 10211.
(4) Real estate salesperson licensees, as defined in Section 10016.
(5) Real estate broker licensees, as defined in Section 10015.
(6) Designated officers of a corporation licensed as a broker, as described in Section 10211.
(7) Persons who submit a petition for reinstatement of the person’s license or the reduction of a penalty, pursuant to Section 11522 of the Government Code.
(b) The Department of Justice shall provide a state- or federal-level response, pursuant to subdivision (p) of Section 11105 of the Penal Code.
SEC. 12.
Section 10153 of the Business and Professions Code is amended to read:10153.
In addition to the proof of honesty and truthfulness required of any applicant for a real estate license, the commissioner shall ascertain by written examination that the applicant, and in case of a corporation applicant for a real estate broker’s license that each officer, or agent thereof through whom it proposes to act as a real estate licensee, has all of the following:(a) An appropriate knowledge of the English language, including reading, writing, and spelling and of arithmetical computations common to real estate and business opportunity practices.
(b) An understanding of the principles of real estate and business opportunity conveyancing, the general purposes and general legal effect of agency contracts, deposit receipts, deeds, mortgages, deeds of trust, chattel mortgages, bills of sale, land contracts of sale and leases, and of the principles of business and land economics and appraisals.
(c) A general and fair understanding of the obligations between principal and agent, of the principles of real estate and business opportunity practice and the canons of business ethics pertaining thereto, of the provisions of this part, of Chapter 1 (commencing with Section 11000) of Part 2, and of the regulations of the Real Estate Commissioner as contained in Title 10 of the California Code of Regulations.
SEC. 13.
Section 10153.2 of the Business and Professions Code is amended to read:10153.2.
(a) An applicant to take the examination for an original real estate broker license shall also submit evidence, satisfactory to the commissioner, of successful completion, at an accredited institution, of:(1) A three-unit semester course, or the quarter equivalent thereof, in each of the following:
(A) Real estate practice, which shall include both of the following:
(i) A component on implicit bias, including education regarding the impact of implicit bias, explicit bias, and systemic bias on consumers, the historical and social impacts of those biases, and actionable steps students can take to recognize and address their own implicit biases.
(ii) A component on federal and state fair housing laws as those laws apply to the practice of real estate. The fair housing component shall include an interactive participatory component, during which the applicant shall roleplay as both a consumer and real estate professional.
(B) Legal aspects of real estate.
(C) Real estate appraisal.
(D) Real estate financing.
(E) Real estate economics or accounting.
(2) A three-unit semester course, or the quarter equivalent thereof, in three of the following:
(A) Advanced legal aspects of real estate.
(B) Advanced real estate finance.
(C) Advanced real estate appraisal.
(D) Business law.
(E) Escrows.
(F) Real estate principles.
(G) Property management.
(H) Real estate office administration.
(I) Mortgage loan brokering and lending.
(J) Computer applications in real estate.
(K) On and after July 1, 2004, California law that relates to common interest developments, including, but not limited to, topics addressed in the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4 of the Civil Code) and in the Commercial and Industrial Common Interest Development Act (Part 5.3 (commencing with Section 6500) of Division 4 of the Civil Code).
(b) The commissioner shall waive the requirements of this section for an applicant who is a member of the State Bar of California and shall waive the requirements for which an applicant has successfully completed an equivalent course of study as determined under Section 10153.5.
SEC. 14.
Section 10153.3 of the Business and Professions Code is repealed.SEC. 15.
Section 10153.3 is added to the Business and Professions Code, to read:10153.3.
(a) Licenses that were suspended pursuant to former Section 10153.4, as it read on December 31, 2025, and for which the current license status remains suspended due to former Section 10153.4, as that section read on December 31, 2025, shall be deemed expired. The expiration date shall be four years following the date of issuance of the license.(b) The department shall update its records to reflect this change.
(c) This section shall remain in effect only until January 1, 2027, and as of that date is repealed.
SEC. 16.
Section 10153.4 of the Business and Professions Code is repealed.SEC. 17.
Section 10153.5 of the Business and Professions Code is amended to read:10153.5.
As used in Sections 10151 and 10153.2, “an equivalent course of study” consists of courses at a private vocational school that have been found by the commissioner, upon consideration of an application for approval, to be equivalent in quality to the real estate courses offered by the colleges and universities accredited by the Western Association of Schools and Colleges.As used in Sections 10151 and 10153.2, “accredited institution” shall mean a college or university that either:
(a) Is accredited by the Western Association of Schools and Colleges, or by any other regional accrediting agency recognized by the United States Department of Education.
(b) In the judgment of the commissioner, has a real estate curriculum equivalent in quality to that of the institutions accredited pursuant to subdivision (a).
SEC. 18.
Section 10156.2 of the Business and Professions Code is amended to read:10156.2.
An application on the form prescribed by the commissioner for the renewal of a license, filed before midnight of the last day of the period for which a previous license was issued, accompanied by the applicable renewal fee and good faith evidence of compliance with the provisions of Article 2.5 (commencing with Section 10170), entitles the applicant to continue operating under their existing license after its specified expiration date, if not previously suspended or revoked.If the commissioner determines that the applicant has not complied with the continuing education requirements, they shall either (1) advise the applicant of the applicability of Section 10171.2 on an extended period for compliance; or (2) advise the applicant that their rights to operate under the prior license will expire five days from the date the notice is mailed, or on the date the license would normally expire, whichever is later; and the commissioner’s reason for that determination, and the right of the applicant to request a hearing on the decision. Nothing in this section shall prevent the commissioner from delaying the renewal of the license of a licensee pursuant to Section 10177.
SEC. 19.
Section 10156.6 of the Business and Professions Code is amended to read:10156.6.
A restricted license issued pursuant to Section 10156.5 as the commissioner in their discretion finds advisable in the public interest may be restricted:(a) By term.
(b) To employment by a particular real estate broker, if a salesperson.
(c) By conditions to be observed in the exercise of the privileges granted.
SEC. 20.
Section 10156.7 of the Business and Professions Code is amended to read:10156.7.
(a) A restricted license issued pursuant to Section 10156.5 does not confer any property right in the privileges to be exercised thereunder, and the holder of a restricted license does not have the right to the renewal of the license.(b) The commissioner may without hearing issue an order suspending the licensee’s right to further exercise any privileges granted under a restricted license pending final determination made after formal hearing.
SEC. 21.
Section 10162 of the Business and Professions Code is amended to read:10162.
(a) Every licensed real estate broker shall have and maintain a definite place of business in the State of California that serves as the broker’s office for the transaction of business. This office shall be the place where the broker’s license is displayed and where personal consultations with clients are held.(b) A real estate license does not authorize the licensee to do business except from the location stipulated in the real estate license as issued or as altered pursuant to Section 10161.8.
(c) (1) Every applicant for a real estate broker or salesperson license shall provide to the commissioner their current office or mailing address, a current telephone number, and a current electronic mail address that they maintain or use to perform any activity that requires a real estate license at which the department may contact the licensee.
(2) Every real estate broker and salesperson licensee shall inform the commissioner of any change to their office or mailing address, telephone number, or electronic mail address no later than 30 days after making the change.
(3) The licensee email address provided to the department shall not be considered a public record and shall not be disclosed pursuant to a request under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), unless required by an order of a court of competent jurisdiction.
(4) Information sent from an email account of the department to a valid email address provided by an applicant or licensee is presumed to have been delivered to the email address provided.
(d) Notwithstanding Section 10185, a violation of this section is not a misdemeanor.
(e) For the purposes of this section, “valid email address” means an email address at which the applicant or licensee is currently receiving email at the time the application or license renewal is submitted to the department, or has been updated pursuant to paragraph (2) of subdivision (c).
SEC. 22.
Section 10167.4 of the Business and Professions Code is amended to read:10167.4.
The commissioner may require such proof as they may deem advisable concerning the honesty and truthfulness of (a) any applicant for a license as a prepaid rental listing service, (b) the designated agents of the applicant, (c) the officers, directors, and any persons owning 25 percent or more of the shares of any corporation making such an application, or (d) any person owning or controlling a beneficial ownership interest of 25 percent or more in the entity making application before authorizing the issuance of a license for a location. For this purpose, the commissioner may hold a hearing in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code and may refuse to issue a license to an applicant who does not furnish satisfactory proof of their honesty and truthfulness or of the honesty and truthfulness of the corporate officers, directors, and shareholders. To assist in this determination, the commissioner shall require the fingerprinting of every original applicant, including designated agents, officers, directors, persons owning 25 percent or more of the shares of the corporate applicant, and persons owning or controlling a beneficial ownership interest of 25 percent or more in the entity making application.SEC. 23.
Section 10167.45 is added to the Business and Professions Code, to read:10167.45.
(a) Pursuant to subdivision (u) of Section 11105 of the Penal Code, the department shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice for all of the following, related to “prepaid rental listing services,” as defined in Section 10167:(1) Original applicants for a license as a prepaid rental listing service.
(2) Licensees with a license as a prepaid rental listing service.
(3) Persons who submit a petition for reinstatement of the person’s license or the reduction of a penalty, pursuant to Section 11522 of the Government Code.
(b) The Department of Justice shall provide a state- or federal-level response, pursuant to subdivision (p) of Section 11105 of the Penal Code.
SEC. 24.
Section 10170.5 of the Business and Professions Code is amended to read:10170.5.
(a) Except as otherwise provided in Section 10170.8, a real estate license shall not be renewed unless the commissioner finds that the applicant for license renewal has, during the four-year period preceding the renewal application, successfully completed the 45 clock hours of education provided for in Section 10170.4, including all of the following:(1) A three-hour course in ethics, professional conduct, and legal aspects of real estate, which shall include, but not be limited to, relevant legislation, regulations, articles, reports, studies, court decisions, treatises, and information of current interest.
(2) A three-hour course in agency relationships and duties in a real estate brokerage practice, including instruction in the disclosures to be made and the confidences to be kept in the various agency relationships between licensees and the parties to real estate transactions.
(3) A three-hour course in trust fund accounting and handling.
(4) A three-hour course in fair housing that shall include an interactive participatory component, during which the applicant shall roleplay as both a consumer and real estate professional.
(5) A three-hour course in risk management that shall include, but need not be limited to, principles, practices, and procedures calculated to avoid errors and omissions in the practice of real estate licensed activities.
(6) A two-hour course in implicit bias training that shall include both of the following:
(A) A component regarding the impact of implicit bias, explicit bias, and systemic bias on consumers and the historical and social impacts of those biases.
(B) Actionable steps licensees can take to recognize and address their own implicit biases.
(7) In addition to paragraphs (1) to (6), inclusive, a broker shall complete a three-hour course in the management of real estate offices and supervision of real estate licensed activities that shall include, but need not be limited to, the requirements described in subdivision (a) of Section 10159.7 and Section 10164.
(8) Not less than 18 clock hours of courses or programs related to consumer protection, and designated by the commissioner as satisfying this purpose in the commissioner’s approval of the offering of these courses or programs, which shall include, but not be limited to, forms of real estate financing relevant to serving consumers in the marketplace, land use regulation and control, pertinent consumer disclosures, agency relationships, capital formation for real estate development, fair practices in real estate, appraisal and valuation techniques, landlord-tenant relationships, energy conservation, environmental regulation and consideration, taxation as it relates to consumer decisions in real estate transactions, probate and similar disposition of real property, governmental programs such as revenue bond activities, redevelopment, and related programs, business opportunities, mineral, oil, and gas conveyancing, and California law that relates to managing community associations that own, operate, and maintain property within common interest developments, including, but not limited to, management, maintenance, and financial matters addressed in the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4 of the Civil Code).
(9) Other courses and programs that will enable a licensee to achieve a high level of competence in serving the objectives of consumers who may engage the services of licensees to secure the transfer, financing, or similar objectives with respect to real property, including organizational and management techniques, including relevant information to assist a salesperson or broker in understanding how to be effectively supervised by a responsible broker or branch manager, that will significantly contribute to this goal.
(b) Except as otherwise provided in Section 10170.8, a real estate license shall not be renewed for a licensee who already has renewed under subdivision (a), unless the commissioner finds that the applicant for license renewal has, during the four-year period preceding the renewal application, successfully completed the 45 clock hours of education provided for in Section 10170.4, including a nine-hour update survey course that covers the subject areas specified in paragraphs (1) to (7), inclusive, of subdivision (a).
(c) Any denial of a license pursuant to this section shall be subject to Section 10100.
(d) For purposes of this section, “successful completion” of a course described in paragraphs (1) to (7), inclusive, of subdivision (a) means the passing of a final examination.
SEC. 25.
Section 10471.1 of the Business and Professions Code is amended to read:10471.1.
(a) The claimant shall serve a copy of the notice prescribed in subdivision (e) together with a copy of the application upon the judgment debtor by personal service, by certified mail, or by publication, as set forth in subdivision (b).(b) If the judgment debtor holds an unexpired and unrevoked license issued by the department, service of the notice and a copy of the application may be made by certified mail addressed to the judgment debtor at the latest business or residence address on file with the department. If the judgment debtor does not hold an unexpired and unrevoked license issued by the department and personal service cannot be effected through the exercise of reasonable diligence, the claimant shall serve the judgment debtor by one publication of the notice in each of two successive weeks in a newspaper of general circulation published in the county in which the judgment debtor was last known to reside.
(c) If the application is served upon the judgment debtor by certified mail, service is complete five days after mailing if the place of address is within the State of California, 10 days after mailing if the place of address is outside the State of California but within the United States, and 20 days after mailing if the place of address is outside the United States. Personal service is complete on the date of service. Service by publication is complete upon completion of the second week of publication.
(d) If a judgment debtor wishes to contest payment of an application by the commissioner, the debtor shall mail or deliver a written response to the application addressed to the department at its headquarters office within 30 days after service of the notice and application, and shall mail or deliver a copy of the response to the claimant. If a judgment debtor fails to mail or deliver a timely response, the debtor shall have waived their right to present objections to payment.
(e) The notice served upon the judgment debtor shall include the following statement:
“NOTICE: Based upon a judgment entered against you in favor of (name of claimant), application for payment from the Consumer Recovery Account of the Real Estate Fund is being made to the Department of Real Estate. “If payment is made from the Consumer Recovery Account on an application where the final judgment was established by clear and convincing evidence or the Real Estate Commissioner determined that the claimant provided clear and convincing evidence of the judgment debtor’s fraud, misrepresentation, deceit, or conversion of trust funds, all licenses and license rights that you have under the Real Estate Law will be automatically suspended on the date of payment and cannot be reinstated until the Consumer Recovery Account has been reimbursed for the amount paid plus interest at the prevailing rate. “If you wish to contest payment by the Real Estate Commissioner, you must file a written response to the application addressed to the Department of Real Estate at ___________ within 30 days after mailing, delivery, or publication of this notice and mail or deliver a copy of that response to the claimant. If you fail to do so, you will have waived your right to present your objections to payment.” |
(f) If a judgment debtor fails to mail or deliver a written response to the application with the department within 30 days after personal service, mailing, or final publication of the notice, the judgment debtor shall not thereafter be entitled to notice of any action taken or proposed to be taken by the commissioner with respect to the application.
SEC. 26.
Section 10471.4 of the Business and Professions Code is amended to read:10471.4.
(a) In its consideration and investigation of an application, the department shall have recourse to all appropriate means of investigation and discovery available to it under Article 2 (commencing with Section 11180) of Chapter 2 of Part 1 of Division 3 of Title 2 of the Government Code.(b) The commissioner may grant payment on an application if the final judgment satisfies the requirements of Section 10471 and was established by proof by preponderance of the evidence, or a higher standard of proof.
SEC. 27.
Section 10471.5 of the Business and Professions Code is amended to read:10471.5.
(a) The commissioner shall give notice of a decision rendered with respect to the application to the claimant and to a judgment debtor who has filed a timely response to the application in accordance with Section 10471.1.(b) If the application is denied, the notice to the claimant and judgment debtor shall include the following:
“Claimant’s application has been denied. If the claimant wishes to pursue the application in court, the claimant must file the application as follows in a superior court of this state not later than six months after receipt of this notice, pursuant to Section 10472 of the Business and Professions Code. If the underlying judgment is a California state court judgment, the application shall be filed in the court in which the underlying judgment was entered. If the underlying judgment is a federal court judgment, the application shall be filed in the superior court of any county within California that would have been a proper venue if the underlying lawsuit had been filed in a California state court, or in the Superior Court of the County of Sacramento.”
(c) If the decision of the commissioner is to make a payment to the claimant out of the Consumer Recovery Account, the following notice shall be given to the judgment debtor along with a copy of the decision of the commissioner:
“The decision of the Real Estate Commissioner on the application of ____ is to pay $____ from the Consumer Recovery Account. A copy of that decision is enclosed.”
(d) If the decision of the commissioner is to make a payment to the claimant out of the Consumer Recovery Account and to suspend the license of the judgment debtor, the following notice shall be given to the judgment debtor along with a copy of the decision of the commissioner:
“The decision of the Real Estate Commissioner on the application of ____is to pay $____ from the Consumer Recovery Account. A copy of that decision is enclosed.
“Pursuant to Section 10475 of the Business and Professions Code, all of your licenses and license rights under the Real Estate Law will be suspended effective on the date of the payment, and you will not be eligible for reinstatement of any license issued under authority of the Real Estate Law until you have reimbursed the Consumer Recovery Account for this payment plus interest at the prevailing legal rate.
“If you desire a judicial review of the suspension of your licenses and license rights, you may petition the superior court for a writ of mandamus. If the underlying judgment is a California state court judgment, the petition shall be filed in the court in which the judgment was entered. If the underlying judgment is a federal court judgment, the petition shall be filed in the superior court of any county within California that would have been a proper venue if the underlying lawsuit had been filed in a California state court, or in the Superior Court of the County of Sacramento. To be timely, the petition must be filed with the court within 30 days of receipt of this notice.”
SEC. 28.
Section 10472 of the Business and Professions Code is amended to read:10472.
(a) A claimant against whom the commissioner has rendered a decision denying an application pursuant to Section 10471 may, within six months after the mailing of the notice of the denial, file a verified application in superior court for an Order Directing Payment Out of the Consumer Recovery Account based upon the grounds set forth in the application to the commissioner. If the underlying judgment is a California state court judgment, the application shall be filed in the court in which the underlying judgment was entered. If the underlying judgment is a federal court judgment, the application shall be filed in the superior court of any county within California that would have been a proper venue if the underlying lawsuit had been filed in a California state court, or in the Superior Court of the County of Sacramento.(b) A copy of the verified application shall be served upon the commissioner and upon the judgment debtor. A certificate or affidavit of service shall be filed by the claimant with the court. Service on the commissioner may be made by certified mail addressed to the headquarters office of the bureau. Service upon a judgment debtor may be made in accordance with Section 10471.1. The notice served upon the judgment debtor shall read as follows:
“NOTICE: An application has been filed with the court for a payment from the Consumer Recovery Account that was previously denied by the Real Estate Commissioner.
“If the Department of Real Estate makes a payment from the Consumer Recovery Account pursuant to a court order, all of your licenses and license rights under the Real Estate Law may be suspended until the Consumer Recovery Account has been reimbursed for the amount paid plus interest at the prevailing rate.
“If you wish to defend in court against this application, you must file a written response with the court within 30 days after having been served with a copy of the application. If you do not file a written response, you will have waived your right to defend against the application.”
SEC. 29.
Section 10473.1 of the Business and Professions Code is amended to read:10473.1.
The judgment debtor may defend an action against the Consumer Recovery Account on their own behalf and shall have recourse to all appropriate means of defense and review, including examination of witnesses. All matters, including, but not limited to, the issues of fraud, misrepresentation, deceit, or conversion of trust funds, finally adjudicated in the underlying action are conclusive as to the judgment debtor and the applicant in the proceeding against the Consumer Recovery Account, if the final judgment was established by proof by clear and convincing evidence or the commissioner determined that the applicant provided clear and convincing evidence of the judgment debtor’s fraud, misrepresentation, deceit, or conversion of trust funds.SEC. 30.
Section 10475 of the Business and Professions Code is amended to read:10475.
Should the commissioner pay from the Consumer Recovery Account any amount in settlement of a claim or toward satisfaction of a judgment against a licensed broker or salesperson or a person holding a prepaid rental listing service license, the license of the broker or salesperson or prepaid rental listing service licensee shall be automatically suspended upon the date of payment from the Consumer Recovery Account if the final judgment was established by proof by clear and convincing evidence or the commissioner determined that the claimant provided clear and convincing evidence of the fraud, misrepresentation, deceit, or conversion of trust funds. No broker or salesperson or prepaid rental listing service licensee shall be granted reinstatement until they have repaid in full, plus interest at the prevailing legal rate applicable to a judgment rendered in any court of this state, the amount paid from the Consumer Recovery Account on their account. A discharge in bankruptcy shall not relieve a person from the penalties and disabilities provided in this chapter.SEC. 31.
Section 11001 of the Business and Professions Code is amended to read:11001.
The Real Estate Commissioner (hereafter referred to in this chapter as the commissioner) may adopt, amend, or repeal such rules and regulations as are reasonably necessary for the enforcement of this chapter. The commissioner may issue any order, permit, decision, demand, or requirement to effect this purpose. These rules, regulations, and orders shall be adopted pursuant to the provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).SEC. 32.
Section 11301 of the Business and Professions Code is amended to read:11301.
(a) There is hereby created within the Department of Consumer Affairs a Bureau of Real Estate Appraisers to administer and enforce this part.(b) Notwithstanding any other law, the powers and duties of the bureau, as set forth in this part, shall be subject to review by the appropriate policy committees of the Legislature. The review shall be performed as if this part were scheduled to be repealed as of January 1, 2030.
SEC. 33.
Section 11411 of the Business and Professions Code is amended to read:11411.
There shall be separate accounts in the Real Estate Appraisers Regulation Fund for purposes of administration and for purposes of recovery. These accounts shall be known respectively as the Administration Account and the Recovery Account. On and after January 1, 2026, 5 percent of the amount of any license or certificate fee collected in the 2024–25 fiscal year shall be transferred to the Recovery Account. On and after January 1, 2026, 5 percent of any license or certificate fee collected under this part shall be credited to the Recovery Account. The Recovery Account is a continuing appropriation for carrying out this chapter.SEC. 34.
Section 11411.5 is added to the Business and Professions Code, to read:11411.5.
As used in this chapter, the following definitions apply:(a) “Application” means an application for payment from the Recovery Account filed with the bureau pursuant to subdivision (a) of Section 11413.
(b) “Claimant” means an aggrieved person who files an application pursuant to subdivision (a) of Section 11413.
(c) “Court of competent jurisdiction” means a small claims, municipal, or superior court of the State of California, or a United States district court or a United States bankruptcy court sitting to conduct its affairs within the boundaries of the State of California.
(d) “Digital signature” has the same meaning as in subdivision (d) of Section 16.5 of the Government Code. The use of an electronic signature or a digital signature shall have the same force or effect as a wet signature.
(e) “Electronic filer” means a claimant or claimant’s attorney who electronically uploads or transmits to the bureau an application or document in electronic form at or through the bureau’s internet website.
(f) “Electronic signature” has the same meaning as defined in subdivision (h) of Section 1633.2 of the Civil Code.
(g) “Electronic submission” means the upload or transmission of an application or document by electronic means at or through the bureau’s internet website.
(h) “Final judgment” means a judgment, arbitration award, or criminal restitution order for which the period for appeal has expired, enforcement of which is not barred by the order of any court or by any statutory provision, and which has not been nullified or rendered void by any court order or statutory provision.
(i) “Party” means either the claimant, the judgment debtor, or the bureau.
(j) “Person” includes corporation, partnership, company, or firm.
(k) “Recovery account” means the separate account in the Real Estate Appraisers Regulation Fund established pursuant to Section 11411.
SEC. 35.
Section 11412 of the Business and Professions Code is amended to read:11412.
(a) On or before January 1, 2002, the director shall determine the number of complaint cases containing judicial findings of fraud that may be eligible for recovery. This information shall be used by the director to determine whether a real estate appraiser Recovery Account is necessary or whether to recommend that it should be eliminated.(b) The statute of limitations for claims against the fund arising between the effective date of this part and the creation of the fund shall be tolled until the date the fund is created.
(c) On and after July 1, 2026, the bureau shall do both of the following:
(1) Post information on its internet website about the Recovery Account, including eligibility requirements and the application process.
(2) Upon receipt of a complaint by a licensee or a member of the public, provide a notification to the complainant that includes information regarding eligibility requirements and the application process.
(d) On or before January 1, 2028, and annually thereafter, the bureau shall submit to the Legislature a report in compliance with Section 9795 of the Government Code that includes, for the prior fiscal year, the balance of the Recovery Account, the number of applicants who applied for payment from the Recovery Account, the number of applicants whose claims were approved, and the total payments made from the Recovery Account.
SEC. 36.
Section 11412.2 is added to the Business and Professions Code, to read:11412.2.
(a) In addition to the amount paid into the Recovery Account as set forth in Section 11411, the director may authorize a transfer from the Administration Account to the Recovery Account of any amount deemed necessary.(b) If the balance remaining in the Recovery Account contains more than four hundred thousand dollars ($400,000), the director may authorize the transfer of all or part of the surplus amount to the Administration Account.
(c) The director may authorize the return to the Recovery Account of all or any amount previously transferred to the Administration Account under this section.
SEC. 37.
Section 11413 is added to the Business and Professions Code, to read:11413.
(a) (1) When an aggrieved person obtains either (A) a final judgment in a court of competent jurisdiction, including, but not limited to, a criminal restitution order issued pursuant to subdivision (f) of Section 1202.4 of the Penal Code or Section 3663 of Title 18 of the United States Code, or (B) an arbitration award that includes findings of fact and conclusions of law rendered in accordance with the rules established by the American Arbitration Association or another recognized arbitration body, and in accordance with Sections 1281 to 1294.2, inclusive, of the Code of Civil Procedure when applicable, and when the arbitration award has been confirmed and reduced to judgment pursuant to Section 1287.4 of the Code of Civil Procedure, against a defendant based upon the defendant’s fraud, misrepresentation, or deceit with intent to defraud, and arising directly out of any transaction in which the defendant, while licensed under this part, performed acts for which a real estate appraiser’s license was required, the aggrieved person may, upon the judgment becoming final, file an application with the bureau for payment from the Recovery Account, within the limitations specified in Section 11418, of the amount unpaid on the judgment that represents an actual and direct loss to the claimant in the transaction.(2) As used in this section, “actual and direct loss” excludes all of the following:
(A) Punitive or exemplary damages.
(B) Legal fees, attorney’s fees, court costs, or arbitration fees.
(C) Nonpecuniary damages, such as inconvenience, aggravation, and emotional distress.
(b) The application shall be delivered in person, by certified mail, or electronically in a manner prescribed by the bureau, to an office of the bureau no later than one year after the judgment has become final.
(c) The application shall be made on a form prescribed by the bureau, verified by the claimant, and shall include the following:
(1) The name and address of the claimant.
(2) If the claimant is represented by an attorney, the name, business address, and telephone number of the attorney.
(3) The identification of the judgment, the amount of the claim and an explanation of its computation.
(4) A detailed narrative statement of the facts in explanation of the allegations of the complaint upon which the underlying judgment is based.
(5) (A) Except as provided in subparagraph (B), a statement by the claimant, signed under penalty of perjury, that the complaint upon which the underlying judgment is based was prosecuted conscientiously and in good faith. As used in this section, “conscientiously and in good faith” means that no party potentially liable to the claimant in the underlying transaction was intentionally and without good cause omitted from the complaint, that no party named in the complaint who otherwise reasonably appeared capable of responding in damages was dismissed from the complaint intentionally and without good cause, and that the claimant employed no other procedural means contrary to the diligent prosecution of the complaint in order to seek to qualify for the Recovery Account.
(B) For the purpose of an application based on a criminal restitution order, all of the following statements by the claimant:
(i) The claimant has not intentionally and without good cause failed to pursue any person potentially liable to the claimant in the underlying transaction other than a defendant who is the subject of a criminal restitution order.
(ii) The claimant has not intentionally and without good cause failed to pursue in a civil action for damages all persons potentially liable to the claimant in the underlying transaction who otherwise reasonably appeared capable of responding in damages other than a defendant who is the subject of a criminal restitution order.
(iii) The claimant employed no other procedural means contrary to the diligent prosecution of the complaint in order to seek to qualify for the Recovery Account.
(6) The name and address of the judgment debtor or, if not known, the names and addresses of persons who may know the judgment debtor’s present whereabouts.
(7) The following representations and information from the claimant:
(A) That the claimant is not a spouse of the judgment debtor nor a personal representative of the spouse.
(B) That the claimant has complied with all of the requirements of this chapter.
(C) That the judgment underlying the claim meets the requirements of subdivision (a).
(D) A description of searches and inquiries conducted by or on behalf of the claimant with respect to the judgment debtor’s assets liable to be sold or applied to satisfaction of the judgment, an itemized valuation of the assets discovered, and the results of actions by the claimant to have the assets applied to satisfaction of the judgment.
(E) That the claimant has diligently pursued collection efforts against all judgment debtors and all other persons liable to the claimant in the transaction that is the basis for the underlying judgment.
(F) That the underlying judgment and debt have not been discharged in bankruptcy, or, in the case of a bankruptcy proceeding that is open at or after the time of the filing of the application, that the judgment and debt have been declared to be nondischargeable.
(G) That the application was submitted to the bureau, as prescribed in subdivision (b), no later than one year after the underlying judgment became final.
(d) The application form shall include detailed instructions with respect to documentary evidence, pleadings, court rulings, the products of discovery in the underlying litigation, and a notice to the applicant of their obligation to protect the underlying judgment from discharge in bankruptcy, to be appended to the application.
(e) An application for payment from the Recovery Account that is based on a criminal restitution order shall comply with all of the requirements of this chapter. For the purpose of an application based on a criminal restitution order, the following terms have the following meanings:
(1) “Complaint” means the facts of the underlying transaction upon which the criminal restitution order is based.
(2) “Judgment” means the criminal restitution order.
(3) “Judgment debtor” means any defendant who is the subject of the criminal restitution order.
SEC. 38.
Section 11413.1 is added to the Business and Professions Code, to read:11413.1.
(a) The claimant shall serve a copy of the notice prescribed in subdivision (e) together with a copy of the application upon the judgment debtor by personal service, by certified mail, or by publication, as set forth in subdivision (b).(b) If the judgment debtor holds an unexpired and unrevoked license issued by the bureau, service of the notice and a copy of the application may be made by certified mail addressed to the judgment debtor at the latest business or residence address on file with the bureau. If the judgment debtor does not hold an unexpired and unrevoked license issued by the bureau and personal service cannot be effected through the exercise of reasonable diligence, the claimant shall serve the judgment debtor by one publication of the notice in each of two successive weeks in a newspaper of general circulation published in the county in which the judgment debtor was last known to reside.
(c) If the application is served upon the judgment debtor by certified mail, service is complete five days after mailing if the place of address is within the State of California, 10 days after mailing if the place of address is outside the State of California but within the United States, and 20 days after mailing if the place of address is outside the United States. Personal service is complete on the date of service. Service by publication is complete upon completion of the second week of publication.
(d) If a judgment debtor wishes to contest payment of an application by the bureau, the debtor shall mail or deliver a written response to the application addressed to the bureau at its headquarters office within 30 days after service of the notice and application, and shall mail or deliver a copy of the response to the claimant. If a judgment debtor fails to mail or deliver a timely response, the debtor shall have waived their right to present objections to payment.
(e) The notice served upon the judgment debtor shall include the following statement:
“NOTICE: Based upon a judgment entered against you in favor of (name of claimant), application for payment from the Recovery Account of the Real Estate Appraisers Regulatory Fund is being made to the Bureau of Real Estate Appraisers. “If payment is made from the Recovery Account on an application where the final judgment was established by clear and convincing evidence or the Bureau of Real Estate Appraisers determined that the claimant provided clear and convincing evidence of the judgment debtor’s fraud, misrepresentation, or deceit with intent to defraud, all licenses and license rights that you have under the Real Estate Appraisers’ Licensing and Certification Law will be automatically suspended on the date of payment. Your license cannot be reinstated until the Recovery Account has been reimbursed for the amount paid plus interest at the prevailing rate. “If you wish to contest payment by the Bureau of Real Estate Appraisers, you must file a written response to the application addressed to the Bureau of Real Estate Appraisers at ___________ within 30 days after mailing, delivery, or publication of this notice and mail or deliver a copy of that response to the claimant. If you fail to do so, you will have waived your right to present your objections to payment.” |
(f) If a judgment debtor fails to mail or deliver a written response to the application with the bureau within 30 days after personal service, mailing, or final publication of the notice, the judgment debtor shall not thereafter be entitled to notice of any action proposed to be taken by the bureau with respect to the application.
SEC. 39.
Section 11413.2 is added to the Business and Professions Code, to read:11413.2.
(a) For all applications and documents submitted electronically to the bureau, the claimant or claimant’s attorney shall submit the application and supporting documentation as a single, noneditable but printable portable document format (PDF). The total file size shall not exceed 100 megabytes.(b) Any electronically submitted application received by the bureau shall be considered filed on the date received by the bureau.
SEC. 40.
Section 11413.3 is added to the Business and Professions Code, to read:11413.3.
(a) The response by a judgment debtor shall contain a verification that a copy of the response was sent to the claimant or, if the claimant is represented by an attorney, to the claimant’s attorney, at the address specified in the application for the claimant or their attorney.(b) If the judgment debtor is not represented by an attorney in objecting to payment of the application, the response shall contain the judgment debtor’s name, the address at which they wish to receive correspondence and notices relating to the application, and a telephone number where they can be reached during regular business hours. If the judgment debtor is represented by an attorney in objecting to the application, the response shall contain the name, business address, and telephone number of the attorney.
SEC. 41.
Section 11413.4 is added to the Business and Professions Code, to read:11413.4.
(a) A judgment debtor who has filed a response objecting to payment to a claimant from the Recovery Account may submit a written argument setting forth in detail the factual and legal bases, including all supporting documentation, upon which they believe the application should be denied. The argument may be submitted at any time from the filing of the response until 30 days after the date of mailing of the notice set forth in subdivision (c) of Section 11413.1, and shall be served upon the bureau and the claimant as specified in Section 11417.4.(b) The claimant shall have 30 days after the mailing of argument by the judgment debtor in which to submit their own argument in favor of payment. The argument by the claimant shall be served upon the bureau and the judgment debtor as specified in Section 11417.4.
SEC. 42.
Section 11414 is added to the Business and Professions Code, to read:11414.
(a) If the bureau determines that the application as submitted by the claimant fails to comply substantially with the requirements of Section 11413 or with the requirements of a regulation adopted by the chief under authority of Section 11313, the bureau shall, within 45 days after receipt of the application, mail an itemized list of deficiencies to the claimant.(b) The time within which the bureau is required to act under Section 11415 shall be measured from the date of receipt by the bureau of an application that is substantially complete. In the event of an irreconcilable dispute between the claimant and the bureau on the question of whether the application is substantially complete, the claimant may immediately file the claim with the court pursuant to Section 11417.3.
SEC. 43.
Section 11414.1 is added to the Business and Professions Code, to read:11414.1.
(a) An application for payment from the Recovery Account shall be made on a form prescribed by the bureau, shall contain the items specified by subdivision (c) of Section 11413, and shall contain all of the information specified in Section 11414.2, except as provided in subdivision (b) of this section. The application shall be verified by the claimant in the manner specified in Section 446 of the Code of Civil Procedure for the verification of a pleading. If executed outside of California, the information in the application and accompanying documents shall be verified before a person qualified to administer oaths within the jurisdiction where executed or certified under penalty of perjury in accordance with the provisions of subdivision (b) of Section 2015.5 of the Code of Civil Procedure.(b) The application is deemed verified by claimant if electronically submitted to the bureau, provided that one of the following conditions is satisfied:
(1) If the claimant is the electronic filer, the claimant signs the application using an electronic signature and declares under penalty of perjury under the laws of the State of California that the information submitted is true and correct.
(2) If the claimant’s attorney is the electronic filer, the claimant signs the application using a digital signature.
(3) If the claimant affixes a wet signature on the printed application before electronically submitting the application to the bureau, the claimant or claimant’s attorney certifies that the original signed application is available for inspection and will be mailed to the bureau, upon the bureau’s written request.
(c) The claimant may submit with the application less than all of the information specified in Section 11414.2 as constituting a substantially complete application if the claimant believes that the information submitted with the application is sufficient for the bureau to determine whether the application qualifies under Sections 11412.1 to 11419.3, inclusive, for payment from the Recovery Account. An application shall not be deemed substantially complete within the meaning of Section 11414.2 unless either of the following applies:
(1) The bureau determines that the information submitted is sufficient for the bureau to make a determination whether the application qualifies for payment from the Recovery Account and notifies the claimant.
(2) The application and supporting information meet all of the requirements specified in Section 11414.2.
(d) If any documents or other attachments are submitted with the application, the application shall contain a verification by the claimant that the documents are true and correct copies of the originals and, if the documents purport to be copies of documents filed in court, that they are true and correct copies of the originals filed with the court.
(e) The application shall contain the name and address of the claimant and, if the claimant is not being represented by an attorney in the filing of the application, a telephone number where the claimant can be reached during regular business hours. If the claimant is represented by an attorney in the filing of the application, the application shall contain the name, business address, and telephone number of the attorney.
SEC. 44.
Section 11414.2 is added to the Business and Professions Code, to read:11414.2.
Except as provided in Section 11414.1, an application for payment from the Recovery Account is “substantially complete” within the meaning of subdivision (b) of Section 11414 if it contains and complies with all of the following:(a) Proof that the judgment debtor was served with the notice and application.
(b) A copy of the judgment showing it to be a final judgment and any findings of facts, conclusions of law, jury verdicts, jury special verdicts, statements of decisions, memorandum decisions, or any other indication by the court or jury of its decision and the reasons for the decision. If the original judgment was appealed, copies of the appellate decision and remittitur.
(c) Copies of the original complaint, answer, cross-complaints, answers to cross-complaints, and all amendments or other subsequent versions of any of those documents.
(d) Copies of any pretrial or posttrial briefs or settlement conference statements.
(e) A listing of all depositions and interrogatories taken in the underlying action, describing the party or parties taking the deposition or propounding the interrogatories, the deponent or person responding to interrogatories, and all persons present at any deposition.
(f) Copies of any demurrers or motions for summary judgment, supporting documents, and rulings thereon.
(g) Copies of all documents reflecting the terms of the underlying transaction, including, but not limited to, offers, counteroffers, escrow instructions, closing statements, deeds, notes, and deeds of trust.
(h) A detailed narrative description by the claimant under penalty of perjury of all the facts of the underlying transaction, including how the claimant was damaged by the judgment debtors and the roles of all other persons involved in the transaction.
(i) A description by the claimant of the basis for each element of damages.
(j) If any codefendant was dismissed from the underlying lawsuit, a statement of the reason for dismissal as to each codefendant.
(k) A list of the names of any witnesses who testified at the underlying trial and the present or last known addresses of the witnesses to the extent known by the claimant.
(l) A description of searches and inquiries conducted by or on behalf of the claimant with respect to the assets of the judgment debtor and the assets of all other persons liable to the claimant in the transaction, which assets may be liable to be sold or applied to the losses suffered by the claimants, an itemized valuation of the assets discovered, and the results of actions by the claimant to have the assets applied to the losses suffered by the claimant.
(m) If the claimant claimed any loss related to the transaction as a deduction on the claimant’s tax return, a description of the amount of the tax benefit derived therefrom.
(n) A statement whether the judgment debtor is known to have filed bankruptcy. If so, a statement whether the claimant was named as a creditor in the bankruptcy, filed a claim in the bankruptcy, and pursued an adversary complaint to have the debt determined to be nondischargeable. If the judgment debtor filed for bankruptcy and the claimant failed to take any of the foregoing actions, a statement as to why the claimant failed to take those actions.
(o) Abstracts of judgment bearing evidence of having been recorded in the county or counties in which the judgment debtor may possibly have assets.
(p) If any of the items specified in subdivisions (a) to (o), inclusive, are not included in the initial application, or are requested in a deficiency letter and not supplied, a statement under penalty of perjury that the claimant has made a diligent effort to locate and produce the items but has been unable to locate them or has found that they do not exist.
(q) All documents or copies of documents submitted to meet the requirements of this section shall be clear and legible.
(r) Certification by the claimant that all documents submitted are true and correct copies of the originals and, if the documents purport to be copies of documents filed in court, that they are true and correct copies of the originals filed with the court.
SEC. 45.
Section 11415 is added to the Business and Professions Code, to read:11415.
(a) The bureau shall render a final written decision on the application within 180 days after a completed application has been received unless the claimant agrees in writing to extend the time within which the bureau may render a decision.(b) The bureau may deny or grant the application or may enter into a compromise with the claimant to pay less in settlement than the full amount of the claim. If the claimant refuses to accept a settlement of the claim offered by the bureau, the written decision of the bureau shall be to deny the claim or it shall be deemed denied if a written decision is not rendered within the time specified in subdivision (a). Evidence of settlement offers and discussions between the bureau and the claimant shall not be competent evidence in judicial proceedings undertaken by the claimant pursuant to Section 11417.3.
SEC. 46.
Section 11415.1 is added to the Business and Professions Code, to read:11415.1.
(a) If the bureau mailed one or more itemized lists of deficiencies to a claimant as provided by subdivision (a) of Section 11414, and if, after an unreasonable length of time the bureau has received no response to the latest list of deficiencies, the bureau may notify the claimant that unless the application is substantially complete within a specified period of time of not less than 30 days, the application will be denied.(b) The determination of what constitutes an unreasonable length of time shall be within the discretion of the chief, taking into account the degree of difficulty in meeting the deficiencies specified. An “unreasonable length of time” shall not be deemed to be less than six months after the last mailing of a list of deficiencies.
(c) If the claimant has not received a response after the passing of the deadline specified by the bureau pursuant to subdivision (a), the bureau may deny the application.
SEC. 47.
Section 11416 is added to the Business and Professions Code, to read:11416.
(a) In its consideration and investigation of an application, the bureau shall have recourse to all appropriate means of investigation and discovery available to it under Article 2 (commencing with Section 11180) of Chapter 2 of Part 1 of Division 3 of Title 2 of the Government Code.(b) The bureau may grant payment on an application if the final judgment satisfies the requirements of Section 11413 and was established by proof by preponderance of the evidence, or a higher standard of proof.
SEC. 48.
Section 11417 is added to the Business and Professions Code, to read:11417.
(a) The bureau shall give notice of a decision rendered with respect to the application to the claimant and to a judgment debtor pursuant to Section 11413.1.(b) If the application is denied, the notice to the claimant and judgment debtor shall include the following:
“Claimant’s application has been denied. If the claimant wishes to pursue the application in court, the claimant must file the application as follows in a superior court of this state not later than six months after receipt of this notice, pursuant to Section 11417.3 of the Business and Professions Code. If the underlying judgment is a California state court judgment, the application shall be filed in the court in which the underlying judgment was entered. If the underlying judgment is a federal court judgment, the application shall be filed in the superior court of any county within California that would have been a proper venue if the underlying lawsuit had been filed in a California state court, or in the Superior Court of the County of Sacramento.”
(c) If the decision of the bureau is to make a payment to the claimant out of the Recovery Account, the following notice shall be given to the judgment debtor along with a copy of the decision of the bureau:
“The decision of the Bureau of Real Estate Appraisers on the application of ____ is to pay $____ from the Recovery Account. A copy of that decision is enclosed.”
(d) If the decision of the bureau is to make a payment to the claimant out of the Recovery Account and to suspend the license of the judgment debtor, the following notice shall be given to the judgment debtor along with a copy of the decision of the bureau:
“The decision of the Bureau of Real Estate Appraisers on the application of ____ is to pay $____ from the Recovery Account. A copy of that decision is enclosed.”
“Pursuant to Section 11418.2 of the Business and Professions Code, all of your licenses and license rights under the Real Estate Appraisers’ Licensing and Certification Law will be suspended effective on the date of the payment, and you will not be eligible for reinstatement of any license issued under authority of the Real Estate Appraisers’ Licensing and Certification Law until you have reimbursed the Recovery Account for this payment plus interest at the prevailing legal rate.”
“If you desire a judicial review of the suspension of your licenses and license rights, you may petition the superior court for a writ of mandamus. If the underlying judgment is a California state court judgment, the petition shall be filed in the court in which the judgment was entered. If the underlying judgment is a federal court judgment, the petition shall be filed in the superior court of any county within California that would have been a proper venue if the underlying lawsuit had been filed in a California state court, or in the Superior Court of the County of Sacramento. To be timely, the petition must be filed with the court within 30 days of receipt of this notice.”
SEC. 49.
Section 11417.1 is added to the Business and Professions Code, to read:11417.1.
(a) If the decision of the bureau is to make a payment out of the Recovery Account and the judgment debtor files a writ of mandamus as provided in subdivision (c) of Section 11417, no payment shall be made of the pending application unless and until the writ of mandamus has been denied and the denial has become final.(b) If the writ of mandamus is granted on the basis that the claimant has not met the requirements for payment from the Recovery Account, the application shall be denied.
SEC. 50.
Section 11417.2 is added to the Business and Professions Code, to read:11417.2.
If, at any time prior to the rendering of a decision on an application, the bureau makes a preliminary determination that the aggregate valid applications of all aggrieved persons against that licensee are likely to exceed the limits of liability in Section 11418, the bureau shall, in lieu of further administrative proceedings, initiate a proration proceeding pursuant to Section 11418.1 in a superior court of any county in this state that would be a proper court for the filing of a denied application or writ of mandamus pursuant to Section 11417.SEC. 51.
Section 11417.3 is added to the Business and Professions Code, to read:11417.3.
(a) A claimant against whom the bureau has rendered a decision denying an application pursuant to Section 11413 may, within six months after the mailing of the notice of the denial, file a verified application in superior court for an Order Directing Payment Out of the Recovery Account based upon the grounds set forth in the application to the bureau. If the underlying judgment is a California state court judgment, the application shall be filed in the court in which the underlying judgment was entered. If the underlying judgment is a federal court judgment, the application shall be filed in the superior court of any county within California that would have been a proper venue if the underlying lawsuit had been filed in a California state court, or in the Superior Court of the County of Sacramento.(b) A copy of the verified application shall be served upon the bureau and upon the judgment debtor. A certificate or affidavit of service shall be filed by the claimant with the court. Service on the bureau may be made by certified mail addressed to the headquarters office of the bureau. Service upon a judgment debtor may be made in accordance with Section 11413.1. The notice served upon the judgment debtor shall read as follows:
“NOTICE: An application has been filed with the court for a payment from the Recovery Account that was previously denied by the Bureau of Real Estate Appraisers. “If the Bureau of Real Estate Appraisers makes a payment from the Recovery Account pursuant to a court order, all of your licenses and license rights under the Real Estate Appraisers’ Licensing and Certification Law may be suspended until the Recovery Account has been reimbursed for the amount paid plus interest at the prevailing rate. “If you wish to defend in court against this application, you must file a written response with the court within 30 days after having been served with a copy of the application. If you do not file a written response, you will have waived your right to defend against the application.” |
SEC. 52.
Section 11417.4 is added to the Business and Professions Code, to read:11417.4.
After initial service of the application on the bureau and the judgment debtor by the claimant as provided by subdivision (b) of Sections 11413 and subdivisions (a) and (b) of 11413.1, and after service of a response by the judgment debtor as provided by subdivision (c) of Sections 11413.1 and 11413.3, all parties shall be served with subsequent correspondence and notices by first class mail as follows:(a) The Bureau shall be served at:
Bureau of Real Estate Appraisers 3075 Prospect Park Drive, Suite 190 Rancho Cordova, CA 95670 |
(b) The claimant shall be served at their address as specified in the application, or if the claimant is represented by an attorney, at the address of the attorney as specified in the application.
(c) The judgment debtor shall be served at their address as specified in the response or, if the judgment debtor is represented by an attorney, as specified in the response.
If the claimant or judgment debtor later wishes to be served at an address other than as specified above, the party shall notify the other parties by first class mail of the new address.
SEC. 53.
Section 11417.5 is added to the Business and Professions Code, to read:11417.5.
(a) The bureau and the judgment debtor shall each have 30 days after being served with the application in which to file a written response. The court shall thereafter set the matter for hearing upon the petition of the claimant. The court shall grant a request of the bureau for a continuance of as much as 30 days and may, upon a showing of good cause by any party, continue the hearing as the court deems appropriate.(b) The claimant shall have the burden of proving compliance with the requirements of Section 11413 by competent evidence at an evidentiary hearing. The claimant shall be entitled to a de novo review of the merits of the application as contained in the administrative record.
(c) If the judgment debtor fails to file a written response to the application, the application may be compromised or settled by the bureau at any time during the court proceedings and the court shall, upon joint petition of the claimant and the bureau, issue an order directing payment out of the Recovery Account.
SEC. 54.
Section 11417.6 is added to the Business and Professions Code, to read:11417.6.
(a) Whenever the court proceeds upon an application under Section 11417.3, it shall order payment out of the Recovery Account only upon a determination that the aggrieved party has a valid cause of action within the purview of Section 11413, and has complied with Section 11417.3.(b) The bureau may defend any such action on behalf of the Recovery Account and shall have recourse to all appropriate means of defense and review, including examination of witnesses and the right to relitigate any issues material and relevant in the proceeding against the Recovery Account that were determined in the underlying action on which the judgment in favor of the applicant was based. If the judgment in favor of the applicant was by default, stipulation, consent, or pursuant to Section 594 of the Code of Civil Procedure, or whenever the action against the licensee was defended by a trustee in bankruptcy, the applicant shall have the burden of proving that the cause of action against the licensee was for fraud, misrepresentation, or deceit with intent to defraud. Otherwise, the judgment shall create a rebuttable presumption of the fraud, misrepresentation, or deceit with intent to defraud. The presumption shall affect the burden of producing evidence.
(c) The bureau may move the court at any time to dismiss the application when it appears there are no triable issues and the petition is without merit. The motion may be supported by affidavit of any person or persons having knowledge of the facts, and may be made on the basis that the petition, and the judgment referred to therein, does not form the basis for a meritorious recovery claim within the purview of Section 11413; provided, however, the bureau shall give written notice at least 10 days before the motion.
(d) The bureau may, subject to court approval, compromise a claim based upon the application of an aggrieved party. The bureau shall not be bound by any compromise or stipulation of the judgment debtor.
SEC. 55.
Section 11417.7 is added to the Business and Professions Code, to read:11417.7.
The judgment debtor may defend an action against the Recovery Account on their own behalf and shall have recourse to all appropriate means of defense and review, including examination of witnesses. All matters relating to the issues of fraud, misrepresentation, or deceit with intent to defraud finally adjudicated in the underlying action are conclusive as to the judgment debtor and the applicant in the proceeding against the Recovery Account, if the final judgment was established by proof by clear and convincing evidence or the bureau determined that the applicant provided clear and convincing evidence of the judgment debtor’s fraud, misrepresentation, or deceit with intent to defraud.SEC. 56.
Section 11418 is added to the Business and Professions Code, to read:11418.
Notwithstanding any other provision of this chapter and regardless of the number of persons aggrieved or real estate appraisals involved in a transaction or the number of judgments against a licensee, the liability of the Recovery Account shall not exceed the following amounts:(a) For applications for payment from the Recovery Account filed on or after January 1, 2026, fifty thousand dollars ($50,000) for any one transaction and two hundred fifty thousand dollars ($250,000) for any one licensee.
(b) When multiple licensed real estate appraisers are involved in a transaction and the individual conduct of two or more licensees results in a judgment meeting the requirements of subdivision (a) of Section 11413, the claimant may seek recovery from the Recovery Account based on the judgment against any licensed real estate appraiser, subject to the limitations of this section and subparagraph (E) of paragraph (7) of subdivision (c) of Section 11413.
SEC. 57.
Section 11418.1 is added to the Business and Professions Code, to read:11418.1.
If the amount of liability of the Recovery Account as provided for in Section 11418 is insufficient to pay in full the valid claims of all aggrieved persons by whom claims have been filed against any one licensee, the amount shall be distributed among them in the ratio that their respective claims bear to the aggregate of the valid claims, or in any other manner as the court deems equitable. Distribution of any moneys shall be among the persons entitled to share therein, without regard to the order of priority in which their respective judgments may have been obtained or their claims have been filed. Upon petition of the bureau, the court may require all claimants and prospective claimants against one licensee to be joined in one action, to the end that the respective rights of all claimants to the Recovery Account may be equitably adjudicated and settled.SEC. 58.
Section 11418.2 is added to the Business and Professions Code, to read:11418.2.
If the bureau pays from the Recovery Account any amount in settlement of a claim or toward satisfaction of a judgment against a licensed appraiser, the license of the appraiser shall be automatically suspended upon the date of payment from the Recovery Account if the final judgment was established by proof by clear and convincing evidence or the bureau determined that the claimant provided clear and convincing evidence of the fraud, misrepresentation, or deceit with intent to defraud. No appraiser licensee shall be granted reinstatement until they have repaid in full, plus interest at the prevailing legal rate applicable to a judgment rendered in any court of this state, the amount paid from the Recovery Account on their account. A discharge in bankruptcy shall not relieve a person from the penalties and disabilities provided in this chapter.SEC. 59.
Section 11418.3 is added to the Business and Professions Code, to read:11418.3.
If, at any time, the money deposited in the Recovery Account is insufficient to satisfy any authorized claim or portion thereof, the bureau shall, when sufficient money has been deposited in the Recovery Account, satisfy the unpaid claims or portions thereof, in the order that the claims were approved, plus accumulated interest at the rate of 4 percent a year.SEC. 60.
Section 11418.4 is added to the Business and Professions Code, to read:11418.4.
Any sums received by the bureau pursuant to any provisions of this chapter shall be deposited in the State Treasury and credited to the Recovery Account.SEC. 61.
Section 11419 is added to the Business and Professions Code, to read:11419.
A person or the agent of any person shall not file with the bureau any notice, statement, or other document required under this chapter that is false or untrue or contains any willful, material misstatement of fact. A violation of this section is punishable by imprisonment in the county jail for a period of not more than one year or a fine of not more than one thousand dollars ($1,000), or both.SEC. 62.
Section 11419.1 is added to the Business and Professions Code, to read:11419.1.
When the bureau has paid from the Recovery Account any sum to the judgment creditor, the bureau shall be subrogated to all of the rights of the judgment creditor and the judgment creditor shall assign all of their rights, titles, and interests in the judgment to the bureau, and any amount and interest recovered by the bureau on the judgment shall be deposited to the Recovery Account.SEC. 63.
Section 11419.2 is added to the Business and Professions Code, to read:11419.2.
The failure of an aggrieved person to comply with this chapter shall constitute a waiver of any rights hereunder.SEC. 64.
Section 11419.3 is added to the Business and Professions Code, to read:11419.3.
Nothing in this chapter limits the authority of the bureau to take disciplinary action against a licensee for a violation of this part or of the rules and regulations adopted by the chief. The repayment in full of all obligations to the Recovery Account by a licensee does not nullify or modify the effect of any other disciplinary proceeding brought pursuant to this part.SEC. 65.
Section 11420 is added to the Business and Professions Code, to read:11420.
This chapter shall remain in effect only until January 1, 2030, and as of that date is repealed.SEC. 66.
Section 11425 is added to the Business and Professions Code, to read:11425.
(a) The bureau shall conduct a one-time study on the feasibility of mandatory licensing for real estate appraisers in California. The bureau shall report its findings, in compliance with Section 9795 of the Government Code, to all appropriate committees of the Legislature on or before December 31, 2028. The report shall include, at a minimum, all of the following:(1) The types of real estate appraisal assignments for which a license is currently not required in California, including the estimated population of individuals engaged in each type of appraisal assignment.
(2) Information from other states, including the scope of authorized activities in each state, license application and issuance costs, licensee populations, and any issues or consumer protection resulting from regulation in that state.
(3) The appraisal assignments that are recommended to be regulated in California, recommended exemptions, an implementation plan, recommended amendments to existing law, and an estimated timeline for implementation.
(4) Fiscal estimates, including estimated costs of implementing the recommendations, estimated revenue generated by the recommendations, and the potential impact to existing license fees.
(b) The bureau shall hold at least two public meetings prior to publication of the report to gather information from the public, consult with interested parties, and incorporate relevant stakeholder feedback.
(c) This section is repealed on January 1, 2030, pursuant to Section 10231.5 of the Government Code.
SEC. 67.
The Legislature finds and declares that Section 21 of this act, which amends Section 10162 of the Business and Professions Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:This act balances the public’s right to access records of the Department of Real Estate with the need to protect the privacy of applicants and licensees.
SEC. 68.
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.Text of SB 774 as chaptered, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions