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AB-1535 Real estate: real estate brokers.(1993-1994)



Current Version: 06/16/93 - Chaptered

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AB1535:v96#DOCUMENT

Assembly Bill No. 1535
CHAPTER 34

An act to amend Section 10232.25 of the Business and Professions Code, relating to real estate.

[ Filed with Secretary of State  June 16, 1993. Approved by Governor  June 15, 1993. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 1535, Caldera. Real estate: real estate brokers.
Existing law requires specified trust funds reports to be filed with the Real Estate Commissioner by real estate brokers who negotiate or collect payments or provide servicing with respect to certain loan transactions or real property sales contracts if the annual dollar volume thereof exceeds a prescribed threshold. Existing law also requires real estate brokers who are exempt from making these trust funds reports to the commissioner, because their annual dollar volume does not exceed that threshold, to complete these reports according to specified requirements, and retain them on file at the broker’s office, where they would be available for inspection by representatives of the commissioner on 24 hours’ notice.
This bill would change the requirements for completing those reports.

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


SECTION 1.

 Section 10232.25 of the Business and Professions Code is amended to read:

10232.25.
 (a)  A real estate broker who meets the criteria of subdivision (a) of Section 10232 shall, within 30 days after the end of each of the first three fiscal quarters of the broker’s fiscal year, or within such additional time as the Real Estate Commissioner may allow for good cause, file with the commissioner a trust funds status report as of the last day of the fiscal quarter which shall include the following:
(1)  A representation that the form and content of the trust account records of the broker are in compliance with the regulations of the commissioner.
(2)  A representation that the broker’s trust fund bank account is maintained in compliance with the regulations of the commissioner.
(3)  A statement of the broker’s aggregate accountability for trust funds.
(4)  A report of trust funds in the broker’s custody consisting of the trust account bank statements as of the bank’s accounting date immediately preceding the end of the fiscal quarter and a schedule of withdrawals and deposits adjusting the account to its true balance as of the end of the fiscal quarter.
(5)  A statement explaining any difference in amount between the broker’s total accountability under paragraph (3) above and the adjusted trust account bank balance under paragraph (4) above.
(b)  Each report made pursuant to subdivision (a) shall include the following:
(1)  The name, address, and position or capacity of the person who prepared the report.
(2)  A declaration under penalty of perjury by the broker that the information and representations in the report are true, complete, and correct to the best of the broker’s knowledge and belief. The declaration in a report submitted on behalf of a corporate broker shall be signed by a broker-officer through whom the corporation is licensed as a real estate broker and by the chief executive officer of the corporation if he or she is not the signing broker-officer.
(c)  If a broker fails to file a report required under subdivision (a) within the time permitted, the commissioner may cause an examination and report to be made and may charge the broker one and one-half times the cost of making the examination and report.
(d)  A broker who meets the criteria of Section 10232, but who, in carrying on the activities described in subdivisions (d) and (e) of Section 10131, did not during a fiscal quarter, accept for the benefit of a person to whom the broker is trustee, any payment or remittance in a form convertible to cash by the broker, need not comply with the provisions of subdivision (a). In lieu thereof, the broker shall submit to the commissioner within 30 days after the end of the fiscal quarter or within such additional time as the commissioner may allow for good cause, a statement under penalty of perjury on a form provided by the department attesting to the fact that the broker did not receive any trust funds in cash or convertible to cash during the fiscal quarter.
(e)  Any real estate broker who engages in any of the activities specified in subdivision (d) or (e) of Section 10131, but who is not required by this section to file trust funds status reports with the commissioner and who is not exempt therefrom under subdivision (d), shall complete trust funds status reports in accordance with either (1) the requirements of subdivisions (a) and (b) applicable to trust funds status reports filed with the commissioner, or (2) the requirements established by the lender or note owner, if the lender or note owner does all of the following: (i) requires monthly reconciliations of trust account balances; (ii) requires annual, CPA-audited financial statements; and (iii) maintains a contractual right to audit the trust accounts held by the broker on behalf of the lender or note owner.
The broker shall retain all trust funds status reports prepared under this subdivision on file at the broker’s offices, where they shall be subject to inspection by representatives of the commissioner upon 24 hours’ notice.