AB 2992

Bill Subjects

Abstract

(1) Existing law, the Real Estate Law, provides for the licensure and regulation of real estate brokers and salespersons by the Real Estate Commissioner, the chief officer of the Department of Real Estate within the Business, Consumer Services, and Housing Agency. Existing law specifies that a willful violation of the Real Estate Law is a crime. Existing law requires the agreement providing for the amount of compensation to be paid to a real estate licensee for the sale of specified residential property or a mobilehome to contain a statement that the amount or rate of real estate commissions is not fixed by law but rather is set by each broker individually and may be negotiable between the seller and the broker. This bill would require agreements providing for the amount of compensation to be paid to a real estate licensee for the purchase of the specified residential property or a mobilehome to contain the above-described statement. By expanding the scope of a crime, this bill would impose a state-mandated local program. (2) Existing law imposes limitations on various contracts, including imposing limitations on an exclusive listing agreement regarding single-family residential property. This bill would require that a buyer's agent and a buyer execute a buyer-broker representation agreement as soon as practicable, but no later than the execution of the buyer's offer to purchase real property. The bill would define a buyer-broker representation agreement as a written contract between a buyer and a buyer's agent by which the buyer's agent has been authorized to provide specified services for or on behalf of the buyer under the contract. The bill would require a buyer-broker representation agreement to include specified terms and require that the buyer's agent provide the buyer a specified disclosure prior to execution of the agreement. The bill would prohibit a buyer-broker representation agreement from lasting longer than 3 months from the date the agreement was made, except if the agreement was entered into between a real estate broker and a corporation, limited liability company, or partnership. The bill would prohibit a buyer-broker representation agreement from renewing automatically and would require a renewal of the agreement to be in writing and be dated and signed by all parties to the agreement. The bill would prohibit a buyer-broker representation agreement from lasting longer than 3 months from the date the renewal was made. The bill would make a buyer-broker representation agreement made in violation of these durational and renewal requirements void and unenforceable. The bill would provide that a violation of these provisions by a licensed person under the Real Estate Law is also a violation of the person's licensing law. Because a violation of the bill's provisions by a person licensed under the Real Estate Law is a crime, the bill would impose a state-mandated local program. (3) Existing law provides various duties and obligations owed to a prospective purchaser of real property. Existing law requires a buyer's agent to provide the buyer in a real property transaction with a copy of a certain disclosure form that states that, among other things, the buyer's agent can, with the buyer's consent, agree to act as the agent for the buyer only, as soon as practical before execution of the buyer's officer to purchase. This bill would require the buyer's agent to additionally provide the disclosure form to the buyer as soon as practicable before execution of a buyer-broker representation agreement. The bill would revise the above-described disclosure statement to specify that the buyer's agent includes a buyer's agent under a buyer-broker representation agreement. (4) Under existing law, if an agreement between a principal and an agent in a real property sales transaction contains a provision requiring binding arbitration of any dispute between the principal and agent in the transaction, the agreement is required to display that provision in a specified manner with specified explanatory language. This bill would apply those requirements to a buyer-broker representation agreement. (5) 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.