New California Bureau of Real Estate Now Has Teeth!

Commercial real estate has always been the “red-headed stepchild” of the California Bureau (formerly Department) of Real Estate. In years past most of their oversight was focused on two areas, residential real estate and mortgage brokers. Why? Because protecting general consumers was their primary focus. Complaints to the Bureau typically came from individuals who felt they were wronged by a deceitful residential agent or that their funds were misappropriated by a mortgage lender. Commercial disputes that involved leasing most often went directly to the courts for settlement.

Now, there’s a new sheriff in town.

Commissioner Wayne Bell has turned over a new leaf and is now pursuing ALL unlicensed individuals with new authority to cite, fine and even issue Cease and Desist orders. In the last two months alone over 30 C/D orders were issued. No stats have been made public that I am aware of as to the fines that were levied but a non-licensed individual can be fined up to $2,500 per incident which due and payable within thirty days. Do the math. If a person does 100 leases while not licensed those fees can really add up.

These C/D orders mostly come under violations of Section 10131 of the Business and Professional Code. That code states as follows:

10131. A real estate broker within the meaning of this part is a person who, for compensation or in expectation of compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others: (a) Sells or offers to sell, buys or offers to buy, solicits prospective sellers or purchasers of, solicits or obtains listings of or negotiates the purchase, sale or exchange of real property or a business opportunity. (b) Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase or exchanges of leases on real property, or on a business opportunity, or collects rents from real property, or improvements thereon, or from business opportunities. (c) Assists or offers to assist in filing an application for the purchase or lease of, or in locating or entering upon, lands owned by the state or federal government. (d) Solicits borrowers or lenders for or negotiates loans or collects payments or performs services for borrowers or lenders or note owners in connection with loans secured directly or collaterally by liens on real property or on a business opportunity. (e) Sells or offers to sell, buys or offers to buy, or exchanges or offers to exchange a real property sales contract, or a promissory note secured directly or collaterally by a lien on real property or on a business opportunity, and performs services for the holders thereof.