1. BUREAU of Real Estate forum
Renaissance Indian Wells
Indian Wells, CA
January 30, 2015

2. Real Estate Commissioner
BUREAU
of Real Estate
Wayne Bell
Real Estate Commissioner

3. BUREAU of Real Estate Operations Report
Tom Pool
Assistant Commissioner

4. Financial Statistics FY 2014-2015
$49.2 MILLION BUDGET
FIVE OFFICES/EXAM CENTERS
SACRAMENTO
OAKLAND
FRESNO
LOS ANGELES
SAN DIEGO
7/1/2013 – 12/31/2013
7/1/2014 – 12/31/2014
Revenues
$24,201,000
$24,799,000
Expenditures
$20,535,000
$26,329,000

5. BUREAU OF REAL ESTATE BY PROGRAM AREA JANUARY 2015

6. License Population Peak 11/2007: License Population as of 12/31/2014:
549, 250
License Population as of 12/31/2014:
402,758

7. LICENSING WORKLOAD 7/1/13 – 7/1/13 7/1/14 – 12/31/14 % Change
Exams Scheduled
RES
18,536
21,646
17%
REB
4,410
3,969
-10%
New Licenses
7,798
10,345
31%
2,614
2,385
-9%
Renewals
25,777
23,924
-7%
14,296
13,897
-3%
Renewal Rate
74% 0%
86%
85%
-1%
Total Licensees
406,377
402,758

8. MORTGAGE LENDING ACTIVITY
Need MLO Endorsement to Originate Residential Loans
MLO Stats
Jan. 2014
Jan. 2015
Approved Individuals
15,743
15,668
Approved Companies
4,179
4,595
Approved Branches
794
854
Total MLOs
20,716
21,117

9. SUBDIVISIONS WORKLOAD
Applications for Public Report
7/1/ /31/13
7/1/ /31/14
Final
1,311
1,186
Renewal
185
196
Amendment 99
140
Total Applications Received
1,595
1,522
TOTAL UNITS
7/1/ /31/13 14,088
7/1/ /31/14 16,212

10. ENFORCEMENT WORKLOAD 7/1/13 -12/31/13 7/1/14 – 12/31/14 % Change
License Denials 76
183
141%
Disciplinary Actions
(Revocations, Surrenders, Suspensions, Public Reprovals)
466
588
26%
Desist & Refrain Orders 40 72
80%
Citations - 29

11. Consumer Recovery Account
FY 11/12
FY 12/13
FY 13/14
FY 14/15 YTD
(6 Months)
Claims Filed
243
180
152
114
Claims Paid 94 77
104 63
Amount Paid
$3,165,669
$2,625,615
$4,286,536
$2,821,792
Total Active Claims
429

12. BROKER SUPERVISION
Lissete Garcia, Staff Counsel

13. Applicable Laws and Regulations
Bus. & Prof. Code Section Responsibility of Corporate Officer in Charge
Regulation 2725 – Broker Supervision over activities of his or her salespersons

14. Broker-Salesperson Relationship Agreements
Must be written.
Contract provisions that attempt to limit liability for broker’s failure to supervise or salesperson’s wrongful acts committed while performing licensed activities are contrary to the law.

15. Responsibilities
Salespersons can only perform licensed activities under the real estate broker that they are licensed under.
All compensation must be paid from the broker.

16. Fiduciary Duty
Licensees owe a fiduciary duty to exercise reasonable care, skill, and diligence to their principal.
Misrepresentations, concealment, dishonest dealing, or fraud committed by a salesperson may lead to discipline of broker’s license for violations of the Real Estate Law, including for the failure to supervise.

17. Broker’s Responsibilities
Brokers are required to supervise the activities of salespersons and employees to ensure full compliance with the Real Estate Law.
Brokers are required to review all documents prepared by the salesperson.
Brokers are required to retain records for (3) three years.

18. Delegation of Duty to Supervise
Regulation 2724 allows a broker to delegate the responsibility of supervising unlicensed persons acting as apartment, hotel, motel, or trailer park managers under certain conditions.
Case example: Property management

19. Disciplinary Action
A broker may be subject to discipline if he or she fails to reasonably supervise the activities of his or her salesperson or, as the designated broker for a corporate broker, fails to supervise and control the activities of the corporation.

20. Guilty Knowledge
Bus. and Prof. Code Section provides that no violation by a salesperson is grounds for the revocation or suspension of his or her employing broker unless, after a hearing, it is found that that the broker had guilty knowledge of the violation.

21. Willful Blindness
A broker who does not have guilty knowledge because he or she failed to supervise a salesperson, may still be disciplined for negligent supervision.

22. Case Example - Diaz
Brokers are required to supervise all of salesperson’s licensed activities, not just those that benefit the broker or corporation.

23. DON’Ts Fail to keep track of salesperson’s transactions.
Fail to supervise branch office(s).
Allow unlicensed entities to operate from your branch office.
Allow your salespeople to work for or accept compensation from others for activities requiring a real estate license.

24. Bureau of Real Estate Audits
Tom Pool
Assistant Commissioner

25. Types of Audits Investigative - New Investigative Follow-Up
Investigative – Other
Routine - New
Routine - Follow-Up

26. Types of Audits Closed Statewide – 2014

27. Types of Audits Closed Statewide – 2010

28. Audits Closed by Activities Statewide – 2014

29. Findings of Audits Closed, 1/1/14 – 12/31/14

30. Trust Fund Shortages
$6,483, in total trust fund shortages in 2014
Breakdown by real estate activity:
$5,622, – Property Management
$194, – Mortgage Loans
$568, – Broker Escrow
$68, Subdivisions
$28, – Sales

31. Broker Supervision The Basics:
Policies, rules, procedures and systems to review, oversee, inspect and manage
A broker shall establish a system for monitoring compliance with such policies, rules, procedures and systems.
The form and extent of such policies, rules, procedures and systems shall take into consideration the # of salespersons employed and the # and location of branch offices.

32. Broker Supervision Considerations:
Do signed, dated broker-salesperson agreements include duties and supervision?
Is there regular reporting by agents to the broker, or scheduled update meetings?
Is there a separation of duties in the area of trust fund handling and accounting?

33. Broker Supervision Considerations:
Does broker look into activities of salesperson, broker-associates?
Is there a visible, active presence?
Is there a training program for salespersons?
Given the private information contained in files, how are files secured?
What does the trust account situation look like?

34. Bureau of Real Estate Audit Section
Contact: Dan Sandri – Assistant Commissioner, Audits

35. Licensing LEGISLATION update
Tom Pool
Assistant Commissioner
Licensing & Administration

36. Processing Time Frames
Generally, on-time renewal applications are processed in received date order. 
Licensees who submit their renewal on time can continue working pursuant to after license expiration date.
Late renewals on a priority basis as those individuals can not work while their license is expired. 

37. Processing Timeframes

38. The Career Compass Wellington Pendell
CE Provider
Law Requires Written Exams/Students Must Pass
CalBRE Received Complaints
Resulting Investigations
The Career Compass Issued Certificates w/o Exams
5/28/14 CalBRE Withdrew all of Course Approvals
5/28/14 Instructor Wellington Pendell Lost Approved Status
Licensees were denied CE Credit
Actions Posted

39. The Career Compass Wellington Pendell
Continued to Operate after May 28, 2014 by:
Associating with an approved CE provider
Tina L. Parker
Wayne Rapp
Gold Coast Schools
Investigation Findings:
Knowingly disseminated advertising or promotion materials that include false and/or misleading statements or representations as to CAREER COMPASS’s authorization to sponsor or promote CE coursework.

40. The Career Compass

41. The Career Compass

42. The Career Compass 1/1/18, 2015 Desist and Refrain Order Served
Order states that the Career Compass Inc, Wellington D. Pendell, Tina L. Parker and Wayne Rapp must:
“Desist and Refrain from stating or implying that they, or any of them, are approved by the Bureau to act as a sponsor of an educational offering without having complied will all the provisions of Code Section and Section 3006 et seq. of the Regulations.”

43. Formal Actions Against Course Providers

44. Course Providers

45. Legislation Update
AB 2540 (Dababneh) – Contact Information
Requires current:
mailing address
telephone number
electronic mail address
Applies only to contact information that he or she maintains or uses to perform any activity that requires a real estate license
Update within 30 days after making the change.

46. Legislation Update

47. Sacramento, California
Q&A
THANK YOU
This power point presentation will be made available in its entirety on the CalBRE website.
Next Meeting – TBA
Sacramento, California

48. Thank YOu