Article 1 - Scope of Regulation

California Business and Professions Code — §§ 10130-10149

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Sections (43)

Amended by Stats. 2012, Ch. 569, Sec. 2. (AB 1950) Effective January 1, 2013.

It is 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, or to engage in the business of, act in the capacity of, advertise as, or assume to act as a mortgage loan originator within this state without having obtained a license endorsement.

The commissioner may prefer a complaint for violation of this section before any court of competent jurisdiction, and the commissioner and his or her counsel, deputies, or assistants may assist in presenting the law or facts at the trial.

It is the duty of

the district attorney of each county in this state to prosecute all violations of this section in their respective counties in which the violations occur.

§ 10131

Amended by Stats. 2018, Ch. 285, Sec. 27. (AB 2884) Effective January 1, 2019.

A real estate broker within the meaning of this part is a person who, for a compensation or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others:

(a)Sells or offers to sell, buys or offers to buy, solicits prospective sellers or buyers of, solicits or obtains listings of, or negotiates the purchase, sale, or exchange of real property or a business opportunity.

(b)Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase, or exchanges of leases on real property, or

on a business opportunity, or collects rents from real property, or improvements thereon, or from business opportunities.

(c)Assists or offers to assist in filing an application for the purchase or lease of, or in locating or entering upon, lands owned by the state or federal government.

(d)Solicits borrowers or lenders for or negotiates loans or collects payments or performs services for borrowers or lenders or note owners in connection with loans secured directly or collaterally by liens on real property or on a business opportunity.

(e)Sells or offers to sell, buys or offers to buy, or exchanges or offers to exchange a real property sales contract, 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.

§ 10131.01

Amended by Stats. 2012, Ch. 181, Sec. 1. (AB 806) Effective January 1, 2013. Operative January 1, 2014, by Sec. 86 of Ch. 181.

(a)Subdivision (b) of Section 10131 does not apply to (1) the manager of a hotel, motel, auto and trailer park, to the resident manager of an apartment building, apartment complex, or court, or to the employees of that manager, or (2) any person or entity, including a person employed by a real estate broker, who, on behalf of another or others, solicits or arranges, or accepts reservations or money, or both, for transient occupancies described in paragraphs (1) and (2) of subdivision (b) of Section 1940 of the Civil Code, in a dwelling unit in a common interest development, as defined in Section 4100 of the Civil Code, in a dwelling unit in an apartment building or complex, or in a single-family home, or (3) any person other than the resident manager or employees of that manager,

performing the following functions, who is the employee of the property management firm retained to manage a residential apartment building or complex or court and who is performing under the supervision and control of a broker of record who is an employee of that property management firm or a salesperson licensed to the broker who meets certain minimum requirements as specified in a regulation issued by the commissioner:

(A) Showing rental units and common areas to prospective tenants.

(B) Providing or accepting preprinted rental applications, or responding to inquiries from a prospective tenant concerning the completion of the application.

costs and accepting security deposits and rents.

(D) Providing information about rental rates and other terms and provisions of a lease or rental agreement, as set out in a schedule provided by an employer.

(E) Accepting signed leases and rental agreements from prospective tenants.

(b)A broker or salesperson shall exercise reasonable supervision and control over the activities of nonlicensed persons acting under paragraph (3) of subdivision (a).

(c)A broker employing nonlicensed persons to act under paragraph (3) of subdivision (a) shall comply with Section 10163 for each apartment building or complex or court where the nonlicensed persons are employed.

§ 10131.1

Amended by Stats. 2007, Ch. 301, Sec. 2. Effective January 1, 2008.

(a)A real estate broker within the meaning of this part is also a person who engages as a principal in the business of making loans or buying from, selling to, or exchanging with the public, real property sales contracts or promissory notes secured directly or collaterally by liens on real property, or who makes agreements with the public for the collection of payments or for the performance of services in connection with real property sales contracts or promissory notes secured directly or collaterally by liens on real property.

(b)As used in this section:

(1)“In the business” means any of the following:

(A)The acquisition for resale to the public, and not as an investment, of eight or more real property sales contracts or promissory notes secured directly or collaterally by liens on real property during a calendar year.

(B)The sale to or exchange with the public of eight or more real property sales contracts or promissory notes secured directly or collaterally by liens on real property during a calendar year. However, no transaction negotiated through a real estate licensee shall be considered in determining whether a person is a real estate broker within the meaning of this section.

(C)The making of eight or more loans in a calendar year from the person’s own funds to the public when those loans are held or resold and are secured directly or collaterally by a lien on residential real property consisting of a single dwelling unit in a condominium or cooperative or on any parcel containing only residential buildings if the total number of units on the parcel is four or less. However, no transaction negotiated through a real estate broker who meets the criteria of subdivision (a) or (b) of Section 10232 shall be considered in determining whether a person is a real estate broker within the meaning of this section.

(2)“Sale,” “resale,” and “exchange” include every disposition of any interest in a real property sales contract or promissory note secured directly or collaterally by a lien on real property, except the original issuance of a promissory note by a borrower or a real property sales contract by a vendor, either of which is to be secured directly by a lien on real property owned by the borrower or vendor.

(3)“Own funds” means either of the following:

(A)Cash, corporate capital, or warehouse credit lines at commercial banks, savings banks, savings and loan associations, industrial loan companies, or other sources that are liability items on the person’s financial statements, whether secured or unsecured.

(B)Cash, corporate capital, or warehouse credit lines at commercial banks, savings banks, savings and loan associations, industrial loan companies, or other sources that are liability items on the financial statement of an affiliate of the person, whether secured or unsecured.

(4)“Own funds” does not include funds provided by a third party to fund a loan on condition that the third party will subsequently purchase or accept an assignment of the loan.

§ 10131.2

Amended by Stats. 1965, Ch. 172.

A real estate broker within the meaning of this part is also a person who engages in the business of claiming, demanding, charging, receiving, collecting or contracting for the collection of an advance fee in connection with any employment undertaken to promote the sale or lease of real property or of a business opportunity by advance fee listing, advertisement or other offering to sell, lease, exchange or rent property or a business opportunity, or to obtain a loan or loans thereon.

§ 10131.3

Amended by Stats. 2022, Ch. 452, Sec. 8. (SB 1498) Effective January 1, 2023.

A real estate broker within the meaning of this part is also a person who, for another or others, for compensation or in expectation of compensation, issues or sells, solicits prospective sellers or purchasers of, solicits or obtains listings of, or negotiates the purchase, sale, or exchange of securities as specified in Section 25206 of the Corporations Code.

The provisions of this section do not apply to a broker-dealer or agent of a broker-dealer licensed by the Commissioner of Financial Protection and Innovation under the provisions of the Corporate Securities Law of 1968.

§ 10131.4

Added by Stats. 1993, Ch. 416, Sec. 1. Effective January 1, 1994.

A real estate broker within the meaning of this part is also a person who acts for another or others for compensation or in expectation of compensation, to do one or more of the following acts:

(a)To sell or offer for sale, buy or offer to buy, solicit prospective sellers or purchasers, solicit or obtain listings, or negotiate the purchase, sale, or exchange of mineral, oil, or gas property.

(b)To solicit borrowers or lenders for or negotiate loans on mineral, oil, or gas property, or collect payments for lenders in connection with these loans.

(c)To lease or offer to lease or negotiate the sale, purchase, or exchange of leases on mineral, oil, or gas property.

(d)To rent or place for rent, mineral, oil, or gas property or to collect rent or royalties from mineral, oil, or gas property or improvements thereon.

(e)Other than as an officer or employee of the state or federal government, to assist or offer to assist another or others in filing an application for the purchase or lease of, or to locate or enter upon mineral, oil, or gas property owned by the state or federal government.

§ 10131.45

Added by Stats. 1993, Ch. 416, Sec. 2. Effective January 1, 1994.

A real estate broker within the meaning of this part is also a person who engages in the following businesses as a principal:

(a)Except as provided in subdivision (d) of Section 10133.35, buying or leasing, or taking an option on mineral, oil, or gas property for the purpose of sale, exchange, lease, sublease, or assignment of a lease of the property or any part of the property.

(b)Offering mining claims or any interest therein for sale or assignment.

§ 10131.5

Added by Stats. 1947, Ch. 455.

A nonresident of California may become a real estate broker by conforming to all of the provisions of this part.

§ 10131.6

Amended by Stats. 2010, Ch. 610, Sec. 1. (AB 2762) Effective January 1, 2011.

(a)Notwithstanding any other provision of law, a person licensed as a real estate broker may sell or offer to sell, buy or offer to buy, solicit prospective purchasers of, solicit or obtain listings of, or negotiate the purchase, sale, or exchange of any manufactured home or mobilehome only if the manufactured home or mobilehome has been registered under Part 2 (commencing with Section 18000) of Division 13 of the Health and Safety Code.

(b)No real estate broker who engages in the activities authorized by this section shall maintain any place of business where two or more manufactured homes or mobilehomes are displayed and offered for sale by the person, unless the broker is also

licensed as a mobilehome dealer as provided for by Part 2 (commencing with Section 18000) of Division 13 of the Health and Safety Code.

(c)As used in this chapter, “manufactured home” means a structure as defined in Section 18007 of the Health and Safety Code, and “mobilehome” means a structure as defined in Section 18008 of the Health and Safety Code. “Manufactured home” and “Mobilehome” do not include a recreational vehicle, as defined in Section 18010 of the Health and Safety Code, a commercial modular, as defined in Section 18001.8 of the Health and Safety Code, or factory-built housing, as defined in Section 19971 of the Health and Safety Code.

(d)In order to carry out this section, the commissioner shall prescribe by regulation, after consultation with the Department of Housing and Community Development, methods and procedures to assure compliance with requirements of the

Health and Safety Code pertaining to manufactured home and mobilehome registration, collection of sales and use taxes, and transaction documentation.

(e)Nothing in this section increases or decreases, or in any way preempts, consumer notice requirements of the National Manufactured Housing Construction and Safety Standards Act of 1974 and related regulations which are set forth in Sections 5414 and 5422 of Title 42 of the United States Code and Subparts E and I of Title 24 of the Code of Federal Regulations.

§ 10131.7

Amended by Stats. 2010, Ch. 610, Sec. 1.3. (AB 2762) Effective January 1, 2011.

It is unlawful for any real estate licensee acting under authority of Section 10131.6 to do any of the following:

(a)To advertise or offer for sale in any manner any manufactured home or mobilehome, unless it is either in place on a lot rented or leased for human habitation within an established mobilehome park as defined in Section 18214 of the Health and Safety Code and the advertising or offering for sale is not contrary to any terms of a contract between the seller of the manufactured home or mobilehome and the owner of the mobilehome park, or is otherwise located, pursuant to a local zoning ordinance or permit, on a lot where its presence has been authorized or its continued presence and that use

would be authorized for a total and uninterrupted period of at least one year.

(b)To fail to withdraw any advertisement of a manufactured home or mobilehome for sale, lease, or exchange within 48 hours after the real estate licensee’s receipt of notice that the manufactured home or mobilehome is no longer available for sale, lease, or exchange.

(c)To advertise or represent a mobilehome as a new mobilehome or a manufactured home as a new manufactured home.

(d)To include as an added cost to the selling price of a mobilehome, an amount for licensing, as prescribed by Section 10751 of the Revenue and Taxation Code, except where the buyer and seller agree to the proration of the license fees for the applicable license period, or transfer of title of the mobilehome as a vehicle, which amount is not due to the state

unless, prior to the sale, the amount has been paid by the licensee to the state in order to avoid penalties that would have accrued because of late payment of the fees.

(e)To make any representation that a manufactured home or mobilehome is capable of being transported on California highways if the manufactured home or mobilehome does not meet all of the equipment requirements applicable to manufactured homes or mobilehomes of Division 12 (commencing with Section 24000) of the Vehicle Code, or to fail to disclose any material fact respecting those equipment requirements.

(f)To advertise or otherwise represent, or knowingly to allow to be advertised or represented on the real estate licensee’s behalf or at the real estate licensee’s place of business, that no downpayment is required in connection with the sale of a manufactured home or mobilehome when downpayment is in fact

required and the buyer is advised or induced to finance the downpayment by a loan in addition to any other loan financing the remainder of the purchase price of the manufactured home or mobilehome.

(g)To fail or neglect properly to cause the endorsement, dating, and delivery (or fail to endorse, date, and deliver) of the certificate of ownership or certificate of title of the manufactured home or mobilehome, and, when having possession, to fail to deliver the registration card to a transferee who is lawfully entitled to a transfer of registration. Except when the certificate of ownership or certificate of title is demanded in writing by a purchaser, the licensee shall satisfy the delivery requirement of this subdivision by submitting appropriate documents and fees to the Department of Housing and Community Development for transfer of registration in accordance with Chapter 8 (commencing with Section 18075) of Part 2 of Division 13 of the

Health and Safety Code and rules and regulations promulgated thereunder.

§ 10133

Amended by Stats. 1985, Ch. 476, Sec. 1.

(a)The acts described in Section 10131 are not acts for which a real estate license is required if performed by:

(1)A regular officer of a corporation or a general partner of a partnership with respect to real property owned or leased by the corporation or partnership, respectively, or in connection with the proposed purchase or leasing of real property by the corporation or partnership, respectively, if the acts are not performed by the officer or partner in expectation of special compensation.

(2)A person holding a duly executed power of attorney from the owner of the real property with respect to which the acts are performed.

(3)An attorney at law in rendering legal services to a client.

(4)A receiver, trustee in bankruptcy or other person acting under order of a court of competent jurisdiction.

(5)A trustee for the beneficiary of a deed of trust when selling under authority of that deed of trust.

(b)The exemptions in subdivision (a) are not applicable to a person who uses or attempts to use them for the purpose of evading the provisions of this part.

§ 10133.1

Amended (as added by Stats. 2017, Ch. 475, Sec. 2) by Stats. 2018, Ch. 285, Sec. 29. (AB 2884) Effective January 1, 2019.

(a)Subdivisions (d) and (e) of Section 10131, Section 10131.1, Article 5 (commencing with Section 10230), and Article 7 (commencing with Section 10240) of this code and Section 1695.13 of the Civil Code do not apply to any of the following:

(1)Any person or employee thereof doing business under any law of this state, any other state, or the United States relating to banks, trust companies, savings and loan associations, industrial loan companies, pension trusts, credit unions, or insurance companies.

(2)Any nonprofit cooperative association organized under Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code, in loaning or advancing money in connection with

any activity mentioned therein.

(3)Any corporation, association, syndicate, joint stock company, or partnership engaged exclusively in the business of marketing agricultural, horticultural, viticultural, dairy, livestock, poultry, or bee products on a cooperative nonprofit basis, in loaning or advancing money to the members thereof or in connection with any business of that type.

(4)Any corporation securing money or credit from any federal intermediate credit bank organized and existing pursuant to the provisions of an act of Congress entitled the “Agricultural Credits Act of 1923,” in loaning or advancing money or credit so secured.

(5)Any person licensed to practice law in this state, not actively and principally engaged in the business of negotiating loans secured by real property, when that person renders

services in the course of his or her practice as an attorney at law, and the disbursements of that person, whether paid by the borrower or other person, are not charges or costs and expenses regulated by or subject to the limitations of Article 7 (commencing with Section 10240), and the fees and disbursements are not shared, directly or indirectly, with the person negotiating the loan or the lender.

(6)Any person licensed as a finance lender when acting under the authority of that license.

(7)Any cemetery authority as defined by Section 7018 of the Health and Safety Code, that is authorized to do business in this state or its authorized agent.

(8)Any person authorized in writing by a savings institution to act as an agent of that institution, as authorized by Section 6520 of the Financial Code or comparable

authority of the Office of the Comptroller of the Currency of the United States Department of the Treasury by its regulations, when acting under the authority of that written authorization.

(9)Any person who is licensed as a securities broker or securities dealer under any law of this state, or of the United States, or any employee, officer, or agent of that person, if that person, employee, officer, or agent is acting within the scope of authority granted by that license in connection with a transaction involving the offer, sale, purchase, or exchange of a security representing an ownership interest in a pool of promissory notes secured directly or indirectly by liens on real property, which transaction is subject to any law of this state or the United States regulating the offer or sale of securities.

(10)Any person licensed as a residential mortgage lender or servicer when

acting under the authority of that license.

(11)Any organization that has been approved by the United States Department of Housing and Urban Development pursuant to Section 106(a)(1)(iii) of the federal Housing and Urban Development Act of 1968 (12 U.S.C. Sec. 1701x), to provide counseling services, or an employee of such an organization, when those services are provided at no cost to the borrower and are in connection with the modification of the terms of a loan secured directly or collaterally by a lien on residential real property containing four or fewer dwelling units.

(12)Any person licensed as a PACE program administrator when acting under the authority of that license.

(13)A PACE solicitor, when enrolled by a person licensed as a program administrator and acting pursuant to an agreement with that program

administrator licensee.

(14)A PACE solicitor agent, when enrolled by a person licensed as a program administrator and acting pursuant to an agreement between a PACE solicitor and that program administrator licensee.

(b)Persons described in paragraph (1), (2), or (3), as follows, are exempt from the provisions of subdivisions (d) and (e) of Section 10131 or Section 10131.1 with respect to the collection of payments or performance of services for lenders or on notes of owners in connection with loans secured directly or collaterally by liens on real property:

(1)The person makes collections on 10 or less of those loans, or in amounts of forty thousand dollars ($40,000) or less, in any calendar year.

(2)The person is a corporation licensed as an escrow

agent under Division 6 (commencing with Section 17000) of the Financial Code and the payments are deposited and maintained in the escrow agent’s trust account.

(3)An employee of a real estate broker who is acting as the agent of a person described in paragraph (4) of subdivision (b) of Section 10232.4.

For purposes of this subdivision, performance of services does not include soliciting borrowers, lenders, or purchasers for, or negotiating, loans secured directly or collaterally by a lien on real property.

(c)(1) Subdivision (d) of Section 10131 does not apply to an employee of a real estate broker who, on behalf of the broker, assists the broker in meeting the broker’s obligations to its customers in residential mortgage loan transactions, as defined in Section 50003 of the Financial Code, where the lender is an

institutional lender, as defined in Section 50003 of the Financial Code, provided the employee does not participate in any negotiations occurring between the principals.

(2)A broker shall exercise reasonable supervision and control over the activities of nonlicensed employees acting under this subdivision, and shall comply with Section 10163 for each location where the nonlicensed persons are employed.

(d)This section does not restrict the ability of the commissioner to discipline a broker or corporate broker licensee or its designated officer, or both the corporate broker licensee and its designated officer, for misconduct of a nonlicensed employee acting under this subdivision, or, pursuant to Section 10080, to adopt, amend, or repeal rules or regulations governing the employment or supervision of an employee who is a nonlicensed person as described in this subdivision.

(e)This section shall become operative on January 1, 2019.

§ 10133.15

Amended by Stats. 1998, Ch. 485, Sec. 9. Effective January 1, 1999.

The provisions of Article 5 (commencing with Section 10230) and Article 7 (commencing with Section 10240) do not apply to any person whose business is that of acting as an authorized representative, agent, or loan correspondent of any person or employee thereof doing business under any law of this state, any other state, or the United States relating to banks, trust companies, savings and loan associations, industrial loan companies, pension trusts, credit unions, or insurance companies or when making loans qualified for sale to any of the foregoing insofar as that business is concerned.

§ 10133.2

Amended by Stats. 2018, Ch. 285, Sec. 30. (AB 2884) Effective January 1, 2019.

The provisions of Sections 10016, 10131, 10131.1, and 10132 do not apply to any stenographer, bookkeeper, receptionist, telephone operator, or other clerical help in carrying out their functions as such.

§ 10133.3

Added by Stats. 1990, Ch. 729, Sec. 1.

The provisions of Sections 10131 and 10131.2 relating to business opportunities do not apply to any person, partnership, corporation, or other legal entity which for another or others sells or offers to sell, solicits prospective sellers or purchasers of, solicits or obtains listings of, advertises for sale, buys or offers to buy, or negotiates the purchase, sale, or exchange of radio, television, or cable enterprises which are licensed and regulated by the Federal Communications Commission, or any successor agency, pursuant to the Communications Act of 1934, as amended and which purchase, sale, or exchange is not in substance a transfer of real property.

§ 10133.35

Added by Stats. 1993, Ch. 416, Sec. 3. Effective January 1, 1994.

A real estate broker’s license shall not be required to engage in any of the following activities with respect to a mineral, oil, or gas property:

(a)To act as a depository under an oil lease, gas lease, or oil and gas lease other than for purpose of sale.

(b)To engage in any transaction subject to an order of a court of competent jurisdiction.

(c)To engage in the business of drilling for or producing oil or gas or mining for or producing minerals.

(d)To negotiate leases or agreements between an owner of mineral, oil, or gas lands, leases, or mineral rights, and a person organized for or engaging in oil or gas or mineral or metal production, or to enter into leases or agreements with an owner of mineral, oil, or gas lands, leases, or mineral rights on behalf of a disclosed or undisclosed person organized for or engaging in oil or gas or mineral or metal production.

(e)To deal with mineral rights or land, other than oil or gas rights or land, as the owner of the rights or land.

§ 10133.4

Added by Stats. 1992, Ch. 396, Sec. 1. Effective January 1, 1993.

(a)The provisions of subdivision (b) of Section 10131 do not apply to persons acting in the capacity of a film location representative in connection with a transaction which complies with the requirements of subdivision (c).

(b)As used in this section:

(1)“Film location representative” means an employee of a principal arranging for the use of real property for photographic purposes.

(2)“Principal” means the person who will use the real property for photographic purposes.

(c)In every transaction arranged by a film location representative, the principal shall maintain liability insurance insuring both that principal and the real property owner against death, bodily injury, and property damage arising out of or in connection with the use, ownership, or maintenance of the real property which is the subject of the transaction. The amount of the insurance coverage shall not be less than five hundred thousand dollars ($500,000) per person or one million dollars ($1,000,000) per occurrence for personal injury and five hundred thousand dollars ($500,000) for property damage. It must be issued by an insurance carrier authorized to sell such insurance in California.

§ 10133.45

Added by Stats. 2016, Ch. 854, Sec. 1. (AB 1381) Effective January 1, 2017.

(a)Subdivisions (a) and (b) of Section 10131 do not apply to persons acting in the capacity of an outdoor advertising representative in connection with a transaction described in subdivision (c).

(b)For purposes of this section, “outdoor advertising representative” means an employee of a corporation or a limited liability company or a general partner of a partnership that holds a license issued by the Department of Transportation to engage in the business of outdoor advertising, arranging for the lease or transfer of real property by his or her employer or an interest in real property solely for the placement of, access to, or operation of, an advertising display and appurtenances thereto, as

defined in Section 5202.

(c)In every transaction involving the transfer, lease, or use of real property for the operation of an advertising display negotiated by an outdoor advertising representative, the owner or operator of the advertising display shall maintain liability insurance coverage for death, bodily injury, and property damage arising out of, or in connection with, its acts, omissions, or operations on the real property. The amount of the insurance coverage shall not be less than five hundred thousand dollars ($500,000) per person or one million dollars ($1,000,000) per occurrence for personal injury and five hundred thousand dollars ($500,000) for property damage. It must be issued by an insurance carrier authorized to sell such insurance in California.

§ 10133.5

Amended by Stats. 1998, Ch. 485, Sec. 10. Effective January 1, 1999.

The provisions of Article 5 (commencing with Section 10230) do not apply to any person who is an approved lender, mortgagee, seller, or servicer for the Federal Housing Administration, United States Department of Veterans Affairs, Farmers Home Administration, Government National Mortgage Association, Federal National Mortgage Association, or Federal Home Loan Mortgage Corporation, when making loans to be sold to, or when servicing loans on behalf of and subject to audit by, any of the foregoing with respect to those loans.

§ 10135