Real Estate Principles - Chapter 2
A candidate for an original real estate salesperson license must: 1. Be at least _____ years old to be issued a license (Surprisingly, there is no age restriction on taking the licensing exam.); 2. To obtain a real estate salesperson license, you must first qualify for and pass a _______ examination. Those who pass the examination are provided a _______ ________ which must be submitted to and approved by the _______. 3. Provide a social security number or an individual taxpayer identification number. 4. Honesty — Applicants must be honest and truthful. Conviction of a crime may result in the denial of a license. Failure to disclose any criminal violation or disciplinary action in an applicant's entire history may also result in denial of a license.
18 written license application DRE
The California Legislature enacted the nation's first real estate license law in _______. Providing for the ______ and regulation of real estate licensees, this law continues to serve as a model for similar legislation in many other states.
1917 licensing
For an applicant who has been licensed as a real estate salesperson in another state, the form RE 226 must be used to verify previous salesperson experience. If an applicant has been licensed as a real estate broker in another state, then the license law in California requires that _____ responsible parties submit a verification of this experience by completing form RE 228. The "responsible parties" in this situation are those persons who have been in a position to verify the applicant's employment status. This might include other real estate brokers, title officers, or loan officers. This type of verification must include a clear, detailed description of the applicant's duties/activities and indicate how the verifier is aware of the applicant's employment record.
2
When the holder of a license fails to renew it prior to the expiration. This person may legally renew the license within ______ years from such expiration by submitting a proper application, evidence of completion of the current continuing education requirements, and the appropriate late renewal fee.
2
______ years after a license expires, all license rights lapse. The individual will be required to re-qualify through the ______ process before being licensed in real estate.
2 examination
The applicant for an original real estate broker license must: 1. Be at least 18 years old; 2. Be honest and truthful; 3. Have been actively engaged as a real estate salesperson for at least ________ years during the _____ years immediately preceding the application OR prove that he/she has general real estate experience that is the equivalent of two years of full-time experience as a salesperson completed within a similar time period (We will explain this requirement in greater detail shortly.); 4. Have completed ______ COURSES in addition to the experience requirements (These specific courses are set forth on the next screen.); AND 5. Pass the qualifying examination.
2 five 8
The Broker's Examination and License Application: The applicant who fails to qualify for a license because of lack of experience and/or educational prerequisites is not entitled to a refund of the fee paid with the application, but the fee does remain to the applicant's credit for _____ years. Once a broker applicant has provided the necessary proof of his/her qualifications in the realm of education and/or experience, it's time for the next step, and it's a BIG one: the broker's _______ ________ All applicants for an original broker license must take and pass this written examination before the license can be granted.
2 qualifying examination
Many candidates for a real estate broker license base their claims of qualification on two years of experience as a licensed real estate salesperson in California. However, keep in mind that this is not enough to fulfill the experience mandate. Even if the DRE's records show that the applicant has been licensed for two or more years as a salesperson, the DRE also requires additional evidence of the salesperson's having been actively employed as a real estate salesperson. To prove this, the DRE requires that the applicant's employing broker(s) complete an Employment Verification, or RE ______, to provide additional evidence that an applicant has worked full-time as a salesperson for at least two years. Once these verification forms are completed, they must be mailed with the application to the DRE. In certain circumstances, the applicant may not be able to obtain this proof of experience from his employing broker. In such a case, there is an alternative. That applicant's experience may be corroborated on an Employment Certification, or RE 228, by at least two other individuals who were employed in a related real estate field AND were in a position to verify the applicant's duties, employment dates, and other pertinent information. The applicant must remember to include an explanation as to why the employing broker of record cannot verify the salesperson's experience.
226
All CA real estate licenses are issued for a period of _____ years. A license is renewable without examination, simply upon submittal of the appropriate fee AND evidence of completion of the required ______ ______.
4 continuing education.
For ALL renewals, ALL renewal applicants, including salespersons, must satisfactorily complete a total of _____ clock-hours of approved offerings within the four-year period immediately preceding license renewal.
45
The continuing education requirement in California is _____ HOURS every ______ years to renew a license. This requirement applies to ALL REAL ESTATE LICENSEES IN CALIFORNIA.
45 four
In order to be appointed as Commissioner, the Commissioner candidate must have served for a minimum of ______ years as a real estate _____ actively engaged in the real estate business in California OR must possess 5 years related experience associated with real estate activity in California during the last 10 years.
5 broker
Information regarding successful completion must be listed on a Continuing Education Course Verification (RE 251) and forwarded with the application for renewal. The DRE does not accept an application for license renewal earlier than ______ days prior to the expiration of the license.
60
Corporate Real Estate Licenses: If there is a change of salesperson, then the corporation must submit a completed Salesperson ________ Application (RE 214) for each currently licensed salesperson to be placed in the employ of the corporation. If there is a change in the location of the main office or the mailing address, the corporation must submit a completed Corporation _________ Application signed by a licensed officer.
Change Change
Corporate Real Estate Licenses: Note that if there is a change of the corporation's name, then a Corporation ________ Application, signed by a licensed officer, must be submitted to the _______, along with a copy of the Amended Articles of Incorporation reflecting the name change and bearing the endorsed stamp of the California Secretary of State.
Change DRE
The CA Real Estate _______ is appointed by the governor, and serves as the chief executive of the Department of Real Estate.
Commissioner
The Real Estate _________ governs the entire California Department of Real Estate. The _______ _________, which gives the Commissioner his authority and power, used police power to create the position of ________. Remember that police power is the right of the ______ to enact and enforce laws for the order, safety, health, morals, and general welfare of the public.
Commissioner California legislature Commissioner state
The _________ specific duties include but are not limited to the following: -The qualification of applicants and issuance of real estate _______; -The investigation of complaints and, where appropriate, pursuit of formal action against ________; -The investigation of non-licensees alleged to be performing acts for which a license is required; -The regulation of the sale or lease of subdivision interests; and -Through real estate broker and other license requirements, the regulation of dealings in mineral, oil and gas property and Prepaid Rental Listing Services.
Commissioner's licenses licensees
Corporate Real Estate Licenses: The designated broker-officer of a corporation may be replaced by another qualified broker for the balance of the license period by submitting: -A completed ______ ______ ________ (RE 201) and _______ ______ ________ (RE 212); AND -A copy of the signed __________ of the officer leaving the firm, or a copy of the Resolution of the Board of Directors with the corporate seal, or a signed statement giving the date of death of the currently licensed designated broker-officer.
Corporation license application Corporation background statement resignation
Corporate Real Estate Licenses: Some corporations choose to do business under a "_______" or fictitious business name. This is permitted in CA, provided that the corporation submits a copy of a Fictitious Business Name Statement as filed with the county clerk's office in the county where the corporation's principal place of business is located.
DBA
Each state has its own real estate licensing laws and regulatory body. In CA, this regulatory agency is the California Department of Real Estate, also known as the _____. The MAIN purpose of the California Department of Real Estate is to protect the ______. The DRE achieves this purpose through the enactment and enforcement of laws relating to real estate and by establishing requirements for the real estate ______' and ______' licenses.
DRE public salespersons and brokers
******* HELP In addition to the previous application and fee for the corporation, ______ broker who is to act for and on behalf of a corporation as a broker-officer must submit a completed Corporation _______ Application and the appropriate license fee. Broker-officer applicants who currently hold an officer license for a corporation, but have never obtained an individual broker license, will be required to furnish evidence of completion of the current continuing education requirements that have been attained within the previous ______ years. A Corporation Background _______ (RE 212) must be submitted by the designated officer of the original corporation license applicant for himself or herself, as well as for each director, the chief executive officer, the president, first-level vice presidents, secretary, chief financial officer, subordinate officers with responsibility for forming policy of the corporation, and for each natural person owning or controlling more than _______% of the corporation's shares.
EACH license 4 Statement 10
Note that in a situation in which an action or proceeding is brought by or against the Commissioner in regard to his work as such, the Attorney _______ will act as their attorney.
General
The CA Real Estate Commissioner is appointed by the _______, and serves as the chief executive of the Department of Real Estate.
Governor
In California, an applicant for any real estate license must submit one set of classifiable fingerprints, acceptable to the State Department of _______ (DOJ). The only applicant who is exempt from this requirement is one who is either currently licensed by the DRE OR who has held a real estate license that expired less than two years ago.
Justice
Under Section 11350.6 of the Welfare and Institutions Code, the DRE may ________ issue or renew a full-term license if the applicant is on a list of persons (obligors) who have not complied with a court order to provide child support payments. Additionally, a license may be _______ if a licensee's name remains on the list 150 days after notice.
NOT suspended
Under the provisions of AB 2429, salesperson examination applicants will be required to submit evidence of completion of a 3 semester, or quarter Chapter equivalent, college-level course in Real Estate ______, Real Estate _______ and one additional course which should be chosen from the following list of courses: Legal Aspects of Real Estate Real Estate Office Administration Real Estate Appraisal Computer Applications in Real Estate Real Estate Finance Real Estate Economics Property Management Business Law Escrows Accounting Mortgage Loan Brokering Lending Common Interest Developments
Principles Practice
In the case of a foreign corporation, a Certificate of ________ is required, executed within the 30 days prior to the date the corporation submits its application.
Qualification
The Commissioner's principal office is located in the City of ______, but they are allowed to establish branch offices in the City and County of San Francisco, the City of Los Angeles, and in other cities as they may deem necessary, and with the approval of the Department of ______.
Sacramento Finance
The Commissioner's annual salary is paid monthly out of the _____ Treasury upon a warrant of the Controller. The Commissioner is also allowed actual and necessary expenses in the discharge of their duties.
State
All licensing courses must be: _________ semester-Chapter (or four quarter-unit) courses in length; COLLEGE-level courses; and Offered by an institution of higher learning accredited by the ______ Association of Schools and Colleges or similar regional accrediting agency recognized by the United States Department of ________, OR by an equivalent course of study offered by a private vocational school approved by the _______, like REAL ESTATE EXPRESS.
THREE Western/Education DRE
An applicant who makes a claim of equivalent experience, in lieu of the two years of salesperson experience required for the broker examination, may base this claim on any combination of salesperson experience, equivalent real estate related experience, and education, which, considered as a whole, would satisfy the intent of the law. Applicants must make claims of equivalent real estate-related experience by submitting a completed Equivalent Experience _________, or RE _____. This form must be certified by employers or other responsible parties who have been in a position to verify the applicant's employment status. This verification must include a clear, detailed description of the applicant's duties and activities as they relate to the general field of real estate. Further information concerning the types of equivalent experience that the DRE considers acceptable for qualification purposes is contained in the most recent edition of the Instructions to License Applicants pamphlet
Verification 227
The applicant may apply for only the real estate exam or the combined exam and the four-year original license by submitting the following items. -An _________ for the real estate salesperson license (RE 400A or RE 216B); -The appropriate license fee; -One fully completed classifiable ______ card; -The fingerprint processing fee; AND -Transcripts showing completion of all of the required courses.
application fingerprint
The following parties are EXEMPT from the licensing requirements in CA. These parties DO NOT need to be licensed as real estate salespersons or brokers because of the nature of their work (in order to carry out their jobs as such): -The employees of ______ or other lending institutions; -The ______ who make federally-insured or federally-guaranteed loans; -________ personal property brokers; -Cemetery authorities; -Certain agricultural associations; -Certain collectors of payments for lenders or on notes for owners in connection with loans secured directly or collaterally by ______ on real property; -Some clerical help (depending on the extent of the duties handled by the clerical personnel); -Resident managers of apartment buildings and complexes or their employees; -Short-term (vacation) rental agents; -Employees of certain lending institutions; -Employees of real estate brokers for specific, limited functions;
banks lenders Licensed liens
The individual ________ license entitles a natural person to conduct a brokerage business under his/her own name or, if so licensed, under a fictitious business name.
broker
An original salesperson license is required for an individual who is to be employed as a salesperson under the control and supervision of a licensed ________. The license permits licensed activity only while in the employ of a broker. Salespersons' licenses must be available for inspection in the broker's main office. The salesperson can be compensated for work as an agent only by the salesperson's employing _____ - not by any other broker, other salesperson, client, or other person, according to Sections 10132 and 10137 of the Code.
broker broker
The Commission offers the following as an example. Let's say that Tahoe candidate, Grant Dailey, has been actively engaged as a licensed salesperson in California for one year, had additional experience as an escrow officer, and also had certain education relating to real estate.Grant has a valid reason to make a __________ claim for experience in this case.
combination
In regards to alternative qualification methods: The ____________, as you might expect, is the decision-maker in granting or denying such a claim. If a candidate's claim is rejected, then that candidate may still eventually qualify for a real estate broker license examination by working the required time as a salesperson. Often a claim of qualification is rejected, but the applicant is given a certain amount of _____ toward the required two years as a salesperson. The candidate should take special care in the preparation of both the claim of qualification AND the required verification forms when submitting these forms to the DRE. This extra attention helps to facilitate the experience review process. The DRE may conduct further inquiry when evaluating experience.
commissioner credit
Should someone in CA act in the capacity of a real estate salesperson without being licensed under the CA licensing laws, that individual cannot receive any _______ for such acts. Section 10132 of the Code defines a real estate salesperson and the acts requiring licensure and employment by a real estate broker.
compensation
A person must be LICENSED if he or she, for _______ (or the promise of ________) and for another person, undertakes or negotiates to undertake any of the following actions: -Sells or offers to sell, buys or offers to buy, and _______ prospective sellers or purchasers of real estate. -Solicits or obtains ______ of real estate. -__________ the purchase, sale, or exchange of real property or a business opportunity. -Assists or offers to assist in filing an application for the purchase or lease of property owned by the ______ or ________ government. -Negotiates loans, collects payments, or performs services for ______ or ______ or note owners. -Sells or offers to sell, buys or offers to buy, or exchanges or offers to exchange a real property sales ______, 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. -Leases or rents; offers to lease or rent; places for rent; solicits listings of places for rent; solicits for prospective tenants; negotiates the sale, purchase or exchanges of leases on real property; or collects rents from real property.* * Keep in mind that some _______ and _______ under the aforementioned section are exempt from the licensing requirement.
compensation/compensation solicits listings negotiates state or federal borrowers or lenders contract managers and employees
The Commissioner's responsibility is to enforce these laws in a manner in which maximum protection for real estate ______ is achieved. In administering the laws and regulations, the Commissioner exercises judgment impartially, with fairness to both the ______ AND the ________.
consumers consumer and the industry
California law states that copies of all records and papers in the Commissioner's office, which are certified under the hand and seal of the Commissioner, are to be received into ______ in all cases equally and with the same effect as the originals.
evidence
In addition to the unlicensed person being held accountable, if a broker has ALLOWED this person to operate under him and compensated this person for performing real estate activities that BY LAW require the person to possess a license, then that broker will ALSO be disciplined under the law. The Commissioner may impose a ______ against any real estate broker who is found in a disciplinary hearing to have compensated an unlicensed person for performing such activities without a license. In addition, if said broker has compensated the non-licensed for the activities for which he is not licensed, that broker is guilty of a _______ and may also be fined by the courts, under Sections 10138, 10139, 10139.5 of the Code.
fine misdemeanor
Examination applications that contain proper verification that the applicant has completed all three required courses will be entitled to take the examination and apply for a ______-year license upon the successful completion of the salesperson examination.
four
Through the DRE's enforcement of the real estate laws, the public is protected from incompetent or downright dishonest real estate _______. The goal is for the consumer to have confidence and trust in the honesty and capability of all practicing licensees, knowing that these licensees are being supervised by the _______.
licensees DRE
The revenue necessary to operate the DRE is derived from fees charged for real estate ______, subdivision public reports, and various other ______ issued by the Department. This revenue goes into the Real Estate General ______, which we will discuss at the end of this chapter. Employees operating from District Offices in five cities (Sacramento, Fresno, Los Angeles, Oakland, and San Diego) carry out the Department's responsibilities as mandated by the Real Estate Law and the ______ Lands Law.
licenses permits Fund Subdivided
There is another choice for applicants who wish to qualify for licensure as a broker. As an alternative to the experience requirements, the applicant may submit evidence of graduation from a four-year university (or college accredited by the Western Association of Schools and Colleges or similar regional accrediting agency recognized by the U. S. Department of Education) with a _______ or ______ in real estate, as the equivalent of two years' general real estate experience AND completion of the required real estate courses.
major or minor
CA Real Estate Law requires that every applicant for a real estate broker license must have successfully completed eight courses before taking the licensing exam. The courses are broken into two groups - the "______ courses" and the "________ courses.
mandatory elective
The application for license renewal must be postmarked prior to _____ of the expiration date of the current license to avoid a lapse in licensure and payment of a late renewal fee.
midnight
If a broker's license expires, the expiration will involve much more than simply the license and activities of that single broker. All licensed activities of the broker must cease, the broker's salespersons are immediately placed in a ______-_______ status, and any branch office licenses are cancelled.
non-working
In some cases, brokers will elect to do business as a corporation. A corporation may be licensed as a real estate broker, provided at least one officer of the corporation is a duly qualified real estate broker willing to act as the corporation's responsible designated broker-_______. Along with the appropriate ________ License Application and fee, the corporation must submit a Certificate of _______ issued by the Secretary of State within the ______ days prior to the date the application is filed and a statement of officers as filed with the Secretary of State.
officer Corporation Status 30
In addition to the previous exemptions, note that the following UNLICENSED parties may solicit for the sale of real property IF the party is: -The property _________. -A person holding the ______ _____ _____ FOR the owner. -An _______ at law acting in the capacity of an attorney ON BEHALF OF the ________. -A receiver or other court appointee. (We will address the topic of receivers in Chapter 12.) -A ______ who is selling the property under a deed of trust.
owner power of attorney attorney owner trustee
The only unlicensed person who may solicit for the sale of real property is the _______ and/or his legal ________, NOT including his real estate salesperson/broker, since obviously a salesperson or broker is already licensed.
owner/representatives
The MAIN purpose of the California Department of Real Estate is to protect the ______.
public
The Commissioner's mission, then, is to enforce the Real Estate Law and the Subdivided Lands Law in a manner that offers the maximum protection for persons dealing with real estate licensees and for _______ of subdivided real property. The mission and the responsibility, as you can see, work toward the same end: protecting the ______.
purchasers consumers
The Commissioner has been given both the power and the means to issue _______. The regulations serve as a means by which the ________ can more easily administer and enforce the Real Estate Law and the Subdivided Lands Law. The _______ of the Real Estate Commissioner have the force and effect of law and, once issued, become a part of the California Administrative Code.
regulations Commissioner Regulations