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AB-1059 Dual agency: commercial real estate transactions.(2017-2018)

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Date Published: 03/31/2017 04:00 AM
AB1059:v98#DOCUMENT

Amended  IN  Assembly  March 30, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1059


Introduced by Assembly Member Gonzalez Fletcher

February 16, 2017


An act to amend Section 580 of the Business and Professions Code, relating to healing arts. An act to add Section 2079.21.5 to the Civil Code, relating to real estate.


LEGISLATIVE COUNSEL'S DIGEST


AB 1059, as amended, Gonzalez Fletcher. Healing arts. Dual agency: commercial real estate transactions.
Existing law, the Real Estate Law, provides for the licensure and regulation of real estate brokers and real estate salespersons by the Real Estate Commissioner. Under existing law, a real estate broker is a person who, for compensation or in expectation of compensation, does or negotiates to do specified acts relating to a real estate transaction. Under existing law, a real estate salesperson is a person who, for compensation or in expectation of compensation, is employed by a licensed real estate broker to do specified acts relating to a real estate transaction.
Existing law requires listing agents and selling agents to provide the seller and the buyer in a real property transaction, including any commercial property, with a copy of a specified form that contains required disclosures regarding a real estate agency relationship. Existing law authorizes a real estate agent, including a licensed real estate broker, either acting directly or through one or more associate licensees, meaning a person who is licensed as a real estate broker or real estate salesperson, to be the dual agent of both the seller and the buyer in a real estate transaction only if he or she obtains the knowledge and consent of, and makes certain affirmative obligations to, both the seller and the buyer. Existing law prohibits a dual agent from disclosing to the buyer that the seller is willing to sell the property at a price less than the listing price without the express written consent of the seller. Existing law also prohibits a dual agent from disclosing to the seller that the buyer is willing to pay a price greater than the offering price without the express written consent of the buyer.
This bill, with respect to a commercial real estate transaction, would prohibit an agent from acting as a dual agent in a commercial real estate transaction. The bill would prohibit a brokerage firm, broker, or any of its associate licensees from acting as an agent for both a seller and a buyer in the same commercial real estate transaction. The bill would prohibit a brokerage firm, broker, or any of its associated licensees from acting as a dual agent in connection with its representation of any principal. The bill would define various terms for purposes of carrying out these provisions.

Existing law provides for the licensure and regulation of various healing arts practitioners by various boards, as defined, within the Department of Consumer Affairs, and prohibits a person, company, or association from selling, bartering, or offering to sell or barter any degree that is required for licensure under the law.

This bill would make a nonsubstantive change to that provision.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 2079.21.5 is added to the Civil Code, to read:

2079.21.5.
 (a) Notwithstanding any other law, an agent shall not act as a dual agent in a commercial real estate transaction.
(b) Notwithstanding any other law, a brokerage firm, broker, or any of its associate licensees shall not act as an agent for both a seller and a buyer in the same commercial real estate transaction. Notwithstanding any other law, a brokerage firm, broker, or any of its associated licensees shall not act as a dual agent in connection with its representation of any principal.
(c) Notwithstanding any other law, for the purposes of this section, the following definitions shall apply:
(1) “Seller” includes any person or entity that leases or sells, offers to lease or sell, intends to lease or sell, or is interested in leasing or selling commercial real estate that he, she, or it owns or controls. “Seller” includes a lessor and landlord.
(2) “Buyer” includes any person or entity that leases or buys, offers to lease or buy, intends to lease or buy, or is interested in leasing or buying commercial real estate from seller. “Buyer” includes a lessee and tenant.
(3) “Commercial real estate transaction” includes any negotiation regarding an agreement or the consummation of an agreement to lease, purchase, or sell commercial real estate between a seller and a buyer.
(4) “Brokerage firm” means a business entity that is engaged in brokerage services for the lease, purchase, or sale of commercial real estate.
(5) “Broker in charge” means the individual broker responsible for an office.
(6) “Brokerage services” means those real property activities requiring a license under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code.
(7) “Commercial real estate” means any estate specified by paragraph (1) or (2) of Section 761 in property that constitutes or is improved with any commercial real property, any leasehold in these types of property exceeding one year’s duration, and mobilehomes, when offered for sale or sold through an agent pursuant to Section 10131.6 of the Business and Professions Code.
(8) “Dual agent” means any brokerage firm or broker that represents both a seller and a buyer in the same transaction. A “dual agent” includes the broker in charge and all agents, licensees or other representatives of the broker in charge and the brokerage firm.
(9) “Principal” means the person or entity with which a brokerage firm and its licensees has an agency relationship related to the negotiation and lease, purchase, or sale of an interest in real estate. Brokerage firms and their licensees owe a fiduciary duty to their principals. “Principal” also means client.
(10) “Fiduciary duty” means the duty to act for the benefit of the principal in all matters relating to the agency relationship. A fiduciary shall put the interest of the principal ahead of the interests of the fiduciary and any third party. Fiduciaries shall disclose all material facts the fiduciary learns about the transaction, shall disclose any knowledge gained from other parties to the principal’s transaction, shall protect the principal’s confidences, and act with reasonable care and obedience toward the principal. Unless otherwise agreed, the duty to protect a principal’s confidences continues after the brokerage service agreement expires or is otherwise terminated.
(11) “Licensee” means a person or entity holding any license under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code issued by the Real Estate Commissioner.

SECTION 1.Section 580 of the Business and Professions Code is amended to read:
580.

A person, company, or association shall not sell or barter or offer to sell or barter any medical degree, podiatric degree, or osteopathic degree, or chiropractic degree, or any other degree which is required for licensure, certification, or registration under this division, or any degree, certificate, transcript, or any other writing, made or purporting to be made pursuant to any laws regulating the licensing and registration or issuing of a certificate to physicians and surgeons, podiatrists, osteopathic physicians, chiropractors, persons lawfully engaged in any other system or mode of treating the sick or afflicted, or to any other person licensed, certified, or registered under this division.