Fiduciary Duty of Real Estate Agent

 In Real Estate

New Real Estate Laws Passed In 2016

  1. Advertising Requirements Using “Team Names”.

    Business and Professions Code Sections 10159.5 through 10159.7 governs the use of a “team name” and a fictitious business name in real estate sales advertising. Those provisions require a responsible broker’s name to be displayed as prominently and conspicuously as a team name in all advertising and defined such terms as “team name”, “responsible broker’s identity” and “fictitious business name”.

    Effective August 29, 2016, chapter 224 revises the definition of “responsible broker’s identity” to mean either (1) the name under which the responsible broker is currently licensed; or (2) both that name and the associated license number. This bill was enacted to correct a drafting error that previously required listing both the name and license number of the responsible broker when the intent was to require one or the other, but not both.

  2. Broker/Salespersons

    Under Business and Professions Code 10161.8 brokers are required to immediately notify the BRE whenever they employ, or terminate the employment of, a real estate salesperson. A willful or knowing violation of this law is a crime punishable as a misdemeanor.

    Effective January 1, 2018, Business and Professions Code 10161.8 requires brokers to state whether the newly hired salesperson is an associate licensee and, if the associate licensee is a broker, to identify each responsible broker with whom the licensee is contractually associated.

  3. Advertising Disclosures

    Under Business and Professions Code 10140.6 licensees are required to disclose certain information, including their license numbers on all advertising materials intended to the first point of contact with consumers and on Real Property Purchase Agreements. Under current law these disclosure requirements do not apply to “for sale” signs or to advertisements in print or electronic media.

    Effective January 1, 2018, Business and Professions Code 10140.6 will require the licensee’s name and the responsible broker’s identity to be included in those solicitation materials and Purchase Agreements. Also beginning in 2018 the disclosure requirements under Business and Professions Code 10140.6 will apply to (1) printed and electronic advertisements; (2) for sale, for rent, for lease and open house signs as well as directional signs.

  4. Comment:

    No doubt this law was pushed by the lobbyist for the sign industry.

  5. Common Interest Developments

    The Davis Sterling Act, Civil Code Sections 4000 to 6150 requires HOAs to maintain the common areas including repairing damage caused by wood destroying pests such as termites. Under CC 4785 the HOAs may require an occupant to temporarily vacate the unit in order to apply pesticide. The HOA much give at least 15 days advance notice of the need to temporarily vacate to the occupants and the owners.

    Under CC 1940.8.5 landlords must notify tenants before they can apply pesticide to a unit or the common area. The notice must contain specific information about the targeted pests and the pesticide to be applied among other details.

  6. Foreclosing After Death of Owner.

    Civil Code Section 2920.7 was recently enacted in 2016 which prohibits a lender from foreclosing once they have been notified that the borrower has died. The lender cannot record a Notice of Default until (1) requesting reasonable documentation of the borrower’s death from the claimant; (2) give the claimant at least 30 days to provide that documentation, Civil Code 2920.7(a). The servicer must also provide the claimant with certain information about the loan and must allow the claimant to apply to assume the loan and/or seek a foreclosure prevention alternative, Civil Code 2920.7(c)(d). Claimants remedies for violations for this new law include injunctive relief, attorneys fees and costs, Civil Code 2920.7(e).

  7. Landlord/Tenant Commercial Leasing.

    Since 2013 commercial landlords have been required to state on every Lease form or Rental Agreement whether the premises comply with all construction related accessability standards as determined by a certified access specialist (CASp) pursuant to Civil Code 1938. Now to further force commercial landlords and prospective tenants to address accessability issues during lease negotiations that disclosure requirement has now been expanded pursuant to Civil Code 1938 as follows:

    1. Every Commercial Lease form or Agreement signed after January 1, 2017, must state whether the premises have undergone a CASp inspection, Civil Code 1938(a).
    2. If the premises have been inspected and meet all disability access requirements the landlord must give prospective tenants a copy of any CASp inspection certificate and report before the Lease is signed. If the landlord does not give the report to the tenant at least 48 hours before the Lease is signed the tenant can rescind the Lease on the basis of the information in the report within 72 hours after signing the Lease, Civil Code 1938(c). If the tenant did not receive the report before signing the Lease, the landlord must give the tenant a copy of it within 7 days after signing the Lease, Civil Code 1938(d).

    About the Author

    • Scott Souders
      Scott Souders Attorney & Author


    Scott Souders is a real estate attorney who has practiced real estate law in excess of 42 years in Southern California. The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.

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