Official Summary Text
AB 1850, as amended, Irwin.
Real estate: wholesaling.
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 makes it unlawful for any person to engage in the business of, act in the capacity of, advertise as, or assume to act as a real estate broker or a real estate salesperson within this state without first obtaining a real estate license from the Department of Real Estate. Existing law defines a real estate broker for these purposes as a person who, for compensation or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to, among other things, sell or offer to sell, buy or offer to buy, solicit prospective sellers or buyers of, solicit or obtain listings of, or negotiate the
purchase, sale, or exchange of real property or a business opportunity for another or others. A willful violation of the Real Estate Law is a crime.
This bill would expand the definition of a real estate broker under the Real Estate Law to include a person who, for compensation or in expectation of a compensation, regardless of the form or time of payment,
does or negotiates to enter into, or offers to enter into, a contract or option to purchase real property with the intent to sell, assign, or market that contract or option to another person for compensation or profit.
negotiates the sales contract.
The bill would also prohibit a person from engaging in wholesaling unless they hold a valid real estate license, as specified, and would define wholesaling as entering into or
offering to enter into a contract or option to purchase real property
with the intent to sell, assign, or market
on behalf of another person and selling, assigning, or marketing
that contract or option to
another person
them
for compensation or profit. The bill would require a wholesaler to clearly disclose in writing to any property owner with whom they contract that they
do not intend to
will not
take title to the property, as specified. The
bill would require an advertisement or offer to sell or assign a contract or option under these provisions to clearly disclose in writing that the person making the offer does not hold legal title to the property.
The bill would deem the failure to provide the above-described disclosure as substantial misrepresentation and would make the failure to provide this disclosure subject to disciplinary action, as specified.
By expanding the application of the real estate professional licensing laws, the willful violation of which is a crime, the bill would impose a state-mandated local program.
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.