0 calbre approved credit hours 2016, book.pdf · 2018. 3. 1. · 45hoursonline 4228 lobos road...

0 CalBRE Approved Credit Hours Last Modified: August 8, 2016

Copyright© 2016

45HoursOnline holds the copyright to this book, Demonstration Course, 2016 Edition. As its copyright holder, we authorize its use for our customers only. By “customer,” we mean anyone who has paid for a course or package of courses that includes this book. Customers may download, copy, and print this book but only for their individual use. Customers may not distribute this book in any form without our written permission.

Publisher

45HoursOnline 4228 Lobos Road Woodland Hills, CA 91364

(818) 716-1028

[email protected]

www.45HoursOnline.com

CalBRE Disclaimer

This course is approved for continuing education credit by the California Bureau of Real Estate; however, this approval does not constitute an endorsement of the views or opinions which are expressed by the course sponsor, instructors, authors, or lecturers

CalBRE Course and Instructor Evaluation

A course and instructor evaluation is available on the California Bureau of Real Estate (CalBRE) website at www.bre.ca.gov. Access this form by typing in “RE 318A” in the search box located in the upper right corner of the home page.

mailto:[email protected]

http://www.45hoursonline.com/

http://www.bre.ca.gov/

PREFACE:

To save space we use the following abbreviations and terms:

BPC The Business and Professional Code of California. BRE California Bureau of Real Estate, aka, CalBRE BPC Business and Professions Code

CalBRE California Bureau of Real Estate, aka, BRE

CAR® California Association of REALTORS®

CC The Civil Code of California

CR Commissioner’s Regulations

NAR® National Association of REALTORS®

You can find all California codes at www.leginfo.ca.gov/calaw.html. Unless otherwise stated, all legal cases are from California. In citing cases, we specify only the names of the litigants and the year of the decision.

The forms cited in this course are from CAR®.

We use these typographic conventions:

This is a “margin note” for short comments, images, and links.

We use margin notes to provide definitions and short footnotes.

Supplemental text added by the Editor to articles written by others is delimited from the original in one of two ways: (1) When the text is lengthy, it is enclosed in a dashed, light-green box (as you see here); otherwise, (2) curly braces are used {as you see here} in line with the text. Supplemental text is considered part of this course.

Paragraphs set against a light-gray background (as you see here) are sidebars. Sidebars are explanatory notes and parenthetical content. The information contained within sidebars is not considered part of the course.

Opinions of and personal asides by the Editor, Chuck Milbourne, are set against a yellow background (as you see here). Feel free to skip these.

For consistency and economy, the Editor has changed all references to sections of the California Civil Code to “CC §”; to the California Business and Professions Code to “BPC §”; and to the Bureau of Real EstateCommissioner’s Regulations to “CR §”. The symbol ‘§’ may be read as “section” and the symbol ‘§§’ as “sections.” “Et al,” as in “CC §2780 et al,” may be read as “all the sub-sections that follow.”

http://www.leginfo.ca.gov/calaw.html




http://www.dre.ca.gov/files/pdf/relaw/2015/regs.pdf

http://www.dre.ca.gov/files/pdf/relaw/2015/regs.pdf

Demonstration Course, 2016 Edition

2016 45HoursOnline, All Rights Reserved Page i

TABLE OF CONTENTS

1 Introduction 1

1.1 About our 45-Hour Package 1

2 Ethics Excerpt: “Seller Beware! A Case History” 4

3 Agency Excerpt: “Disclosure of Agency Relationships” 6

4 Trust Funds Excerpt: “Interest Bearing Accounts” 8

5 Fair Housing Excerpt: “Fair Employment and Housing Act” 10

6 Risk Management Excerpt: “Litigation” 12

7 Management and Supervision Excerpt: “Notification of Hires/Terminations” 14

8 Consumer Protection Reader (CPR) 15

8.1 CPR Part1 Excerpt #1: “Litigation” 15

8.2 CPR Part 1 Excerpt #2: “Visual Red Flags” 18

8.3 CPR Part 2 Excerpt #1: “Noisy Neighbors Be Gone” 19

8.4 CPR Part 2 Excerpt #2: “False Predictions Aren’t Fraud” 20


2016 45HoursOnline, All Rights Reserved Page 1

1 INTRODUCTION

This course is for demonstration purposes only – NO CalBRE CREDITS are awarded for passing this course!

This course consists of one excerpt from each of our six, three-hour courses and four excerpts from our 27-hour, Consumer Protection Reader (CPR) – divided into two individual course: (1) Part 1 (12 hours), and (2) Part 2 (15 hours).

By taking our Demonstration Course you will preview our course materials, quizzes, and finals. It should answer most of your questions about how our 45-hour package works. You may also use this course to judge for yourself how difficult or easy are our final exams.

1.1 ABOUT OUR 45-HOUR PACKAGE

Process

Unlike this Demonstration Package which has just one course, our 45-Hour Package consists of eight courses: Six three-hour courses, one 12-hour course, and one 15-hour course.

The process of completion is simple: For each course: (1) read its book, (2) take its quiz, and (3) pass its final.

After passing all finals, you click a button to show all certificate numbers – one for each course. Then you click our link to CalBRE’s renewal site, eLicensing. There eLicensing prompts you to enter each certificate number to verify completion of your CE requirement. You answer a few questions about your past four years, your current status, and then you make an online payment to CalBRE and your renewal is complete.

The Books

Our textbooks are digital (PDFs). You may read them offline, online, or on paper if you choose to print them. They look great on a Kindle or iPad.

Our textbooks are self-study meaning that you read them at your own pace and wherever convenient. Unlike other education sponsors, we do not log your time online.

The Quizzes

There is an individual quiz and corresponding final for each course – it is the final which you must pass to gain credit for a course.

The purpose of the quiz is to prepare you for the final. Although we give you a score, there is no passing score. The quiz must be taken before the final.

The quiz questions are much more difficult than the questions on the final. Some are wordy, lengthy, and, in a few cases, ambiguous or even a little


Page 2 2016 45HoursOnline, All Rights Reserved

tricky. We don’t care how well you do on the quizzes but we do want you to learn enough from them to pass its corresponding final.

After finishing the quiz, your answers are marked as right or wrong. We then make available its “Quiz Explanations.” This document contains detailed explanations for all the questions on the quiz. We suggest that for each question you answered wrong or else guessed right, that you read its corresponding explanation.

The Finals

There are two finals for each course – the Original and the Retake. If you pass the Original, you’re done; but if you should fail it, at any time later you may make a second attempt to complete the course by passing the Retake exam – an exam having the same number of questions but different questions than on the Original. If you pass the Retake exam, you complete the course; but should you fail it, you fail the course.

If you fail the course, you must start that course over – not the package, just that one course. When starting over you begin a study period with a duration based on the length of the course you failed. The study period is just three hours for each of our six three-hour courses but it is 48 hours for our two much longer consumer protection courses. During the course’s study period, you are locked out of all other final exams.

After having failed a course and during its study period period, we lock you out of all other final exams. During the study period you are expected to re-read the course’s textbook and re-take its quiz. When the lock-out period is over you may begin anew as if you never failed the course.

The questions on all finals consist of 90% multiple choice questions having three selections each with the remainder consisting of true/false questions.

Study List

Should you fail an exam, we give you a link to a “Study List.” It lists all questions you missed together with a reference to a section number in the textbook where the information needed to answer the question can be found.

Time Constraints

CalBRE requires us to enforce four time constraints:

(1) Four-Day Study Period: Immediately after registration begins the four-day study during which you are expected to study the course materials. Only when the study period ends may you begin your finals. CalBRE gives you one year to pass all eight courses.

(2) 15-Hour Daily Quota: You may not complete (i.e., pass) more than 15 hours of CE in any 24-hour period. In other words, you are not allowed to take the final for any course that if passed would result in your having completed more than 15-hours during the preceding 24-hours. For example, if within the preceding 23 hours you had completed three three-hour courses (9 hours), you would not be allowed to take the final for any course having more than six hours but you would be eligible to take the finals for two three-hour courses.



(3) One Minute/Question Time Limit: When taking a final, we must limit the time to as many minutes as the final has questions. For example, since the final for each three-hour course has 16 questions, we can give you only 16 minutes to answer all 16 questions. If you should fail to push the [Grade My Final] button before the time runs out, the final is not graded and your aborted attempt does not count against you.

(4) One Year Completion Requirement: CalBRE will not give credit to any course completed more than one year after registration.

Completion

When you have completed all courses, you print your “Certificate.” The Certificate lists all courses together with their unique certificate numbers – the numbers by which they are known to CalBRE. We then give you a link to CalBRE’s renewal site, eLicensing, where you enter the certificate numbers, and pay CalBRE for your renewal. Renewal is immediate and for the next four years. (Out-of-state licensees, licensees with restricted licenses, licensees convicted of a crime within the preceding six years, and corporate licensees must use the mails and may not use eLicensing to renew their licenses.)

Warranties

We guarantee:

(1) Our 45-Hour package provides all courses needed to renew your license. It doesn’t matter what kind of license you have (salesperson, broker, or corporate) or whether you have renewed before – this package has everything you need.

(2) If you are dissatisfied with our Package for any reason, we will give you a full refund (provided you haven’t completed all of its courses).

(3) If you need help, we are 95% available during business hours to answer you calls and respond to your emails.



2 ETHICS EXCERPT: “SELLER BEWARE! A CASE

HISTORY”

This is §2.2, “Seller Beware! A Case History”, from our course, Ethics, 2016 Edition.

Buyers have three options when presented with material disclosures late in escrow: (1) waive liability, (2) cancel, or (3) complete the sale and sue the seller and his broker for damages.

Consider the case of Jue v. Smiser (1994).

The Facts

Julia Morgan (1872 – 1957)

A Genuine “Julia Morgan.”

On April 1, 1992, Ken and Victoria Smiser listed their home in Oakland with Tabaloff & Company. On April 22 an article about their home appeared in the San Francisco Chronicle. The article stated that their home was designed by Julia Morgan , the celebrated architect of Hearst Castle. Geoffrey and Charlene Jue read the article and called Tabaloff to make an appointment to see the home. When they toured it, the listing agent gave them a brochure which stated the home was an “Authenticated, Julia Morgan Design, built 1917” [emphasis added] .

The Jue’s made a full-price offer contingent on the sale of their home. The Smiser’s countered requesting the Jue’s remove the contingency. The Jue’s accepted.

On June 8th, the Jue’s signed documents required to close on June 11. After signing a note, deed of trust, and other closing documents, they were asked by Tabaloff to sign an addendum containing the following:

Buyer and Seller acknowledge that the residence … is commonly known to be a Julie Morgan design and that there are no plans available at the Oakland City Hall verifying same.

The Jue’s refused to sign the disclaimer.

Over the next two days the Jue’s attempted to verify that the Smiser’s home was designed by Julia Morgan. They spoke to an expert who concluded that the home was, in fact, designed by Morgan. They also spoke to Morgan’s goddaughter who was unaware of any proof the home had been designed by her godmother.

The next day, on June 9th, the Jue’s signed the disclaimer; escrow closed on schedule two days later.

The Suit

Three months later (November, 1992), the Jue’s filed suit against Tabaloff, two of Tabaloff’s agents, and the Smiser’s. The Jue’s claimed negligent misrepresentation, fraud, and other standard complaints.

On February 1993, the defendants (the Smiser’s and Tabaloff) had the case dismissed. They successfully argued to the trial court that they had disclosed to the Jue’s in their June 9th addendum that the home might not

https://scholar.google.com/scholar_case?case=2153930380029100994&q=Jue+v.+Smiser&hl=en&as_sdt=2006&as_vis=1



be a Julia Morgan and the Jue’s acknowledged this disclosure and completed the sale. The trial court accepted this reasoning, dismissed the case, and awarded Tabaloff and the Smiser’s a judgment against the Jue’s for $43,118.59 in attorney fees and court costs.

The Jue’s appealed.

The Jue’s argued that the fact that they had acknowledged the misrepresentation and decided to proceed with their purchase did not preclude their suit for damages. They quoted the following from Bagdasarian v. Gragnon, 1948:

When a party learns that he has been defrauded, he may, instead of rescinding, elect to stand on the contract and sue for damages, and, in such a case his continued performance of the agreement does not constitute a waiver of his action for damages.

The Decision

The appellate court agreed with the reasoning in Bagdasarian and allowed the buyers to sue both the Smiser’s and Tabaloff for misrepresentation. In their decision they wrote:

Sound public policy considerations support our decision. The Legislature has enacted a series of statutes designed to foster honesty and full disclosure in real estate transactions (CC §§ 1102 et seq.,

2079 et seq.) Our decision should encourage sellers and their representatives to investigate and learn the “true facts” pertaining to real property before it is offered for sale. Possession and communication of such knowledge will be of benefit to all parties in the course of negotiations leading to execution of a sale agreement.

For a more complete description

of the case, click here.

See a well presented

presentation of this case on YouTube ►.

Conclusion

Buyers presented with material disclosures late in escrow may acknowledge the disclosure, complete the sale, and then sue the seller and his broker for misrepresentation for not having made the disclosures earlier.

http://scocal.stanford.edu/opinion/bagdasarian-v-gragnon-29348

http://www.priceslaw.com/Prices_Law/ForwardToThePast.html

https://www.youtube.com/watch?v=IMQPssxkJtQ&ebc=ANyPxKrrZAcGcIiodwT3wdR7e0WyMBmYEZrDKZF1aX8eF2aFyot5dvUEFJH4Xi5yeilur4TGat6H9Ar9AvpPF_8n30NLVAxJug

https://www.youtube.com/watch?v=IMQPssxkJtQ&ebc=ANyPxKrrZAcGcIiodwT3wdR7e0WyMBmYEZrDKZF1aX8eF2aFyot5dvUEFJH4Xi5yeilur4TGat6H9Ar9AvpPF_8n30NLVAxJug



3 AGENCY EXCERPT: “DISCLOSURE OF AGENCY

RELATIONSHIPS”

The following is §4.13, “Disclosure of Agency Relationships”, from our three-hour course, Agency, 2016 Edition.

As soon as practicable, a listing agent must disclose to the seller whether the listing agent is acting exclusively as the seller’s agent, or as a dual agent representing both the seller and the buyer.

As soon as practicable, a selling agent must disclose to the buyer and seller whether the agent is acting exclusively as the buyer’s agent, exclusively as the seller’s agent, or as a dual agent representing both the buyer and seller. The term “exclusively” is generally understood to mean the agent acting for the principal in that transaction as contrasted with the dual agency in the same sales contract and does not mean the listing or selling agent does not have other clients. It does not preclude, for example, the listing broker from representing other sellers or the selling agent from representing other buyers. The disclosed agency relationships must be confirmed in writing, either in the purchase agreement or in separate writings executed or acknowledged by seller, buyer, and agent(s), prior to or coincident with execution of the contract.

The below form satisfies this requirement.

These disclosure requirements and the form of the written confirmations are contained in CC §2079.17 .

AGENCY CONFIRMATION STATEMENT (As required by the Civil Code)

Subject Property Address:

______________________________________________________________________________________________________________________________

Listing Agent:

____________________________________________________________

Is the agent of (check one)

the Seller exclusively; or,

both the Buyer and Seller.

Selling Agent:

____________________________________________________________

If not the same as Listing Agent, the agent of (check

one):

the Buyer exclusively; or

the Seller exclusively; or

both the Buyer and Seller.

WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS CONFIRMATION:

Seller: _______________________________________________ Date: ____________ Buyer:

_______________________________________________ Date: ___________



Seller: _______________________________________________ Date: ____________ Buyer:

_______________________________________________ Date: ___________

Listing Agent: ______________________________________________________ By:

__________________________________________________________ Date: ___________

(Please Print)

(Associate Licensee or Broker Signature)

Listing Agent: ______________________________________________________ By:

__________________________________________________________ Date: ___________

(Please Print)

(Associate Licensee or Broker Signature)



4 TRUST FUNDS EXCERPT: “INTEREST BEARING

ACCOUNTS”

The following is §3.3, “Interest-Bearing Accounts”, from our three-hour course, Trust Funds, 2016 Edition.

A trust fund bank account normally may not be interest-bearing. A broker may, however, at the request of the owner of trust funds, or of the principals to a transaction or series of transactions from whom the broker has received trust funds, deposit the funds into an interest-bearing account in a bank or savings and loan association if all of the following requirements of BPC §10145(d) are met:

(1) The account is in the name of the broker as trustee for a specified beneficiary or specified principal of a transaction or series of transactions.

(2) All of the funds in the account are covered by insurance provided by an agency of the federal government.

(3) The funds in the account are kept separate, distinct, and apart from funds belonging to the broker or to any other person for whom the broker holds funds in trust.

(4) The broker discloses the following information to the person from whom the trust funds are received and to any beneficiary whose identity is known to the broker at the time of establishing the account:

the nature of the account;

how the interest will be calculated and paid under various circumstances;

whether service charges will be paid to the depository and by whom; and

possible notice requirements or penalties for withdrawal of funds from the account.

(5) No interest earned on funds in the account shall inure directly or indirectly to the benefit of the broker or to any person licensed to the broker, even if the funds’ owners would permit such an arrangement.

Executory: Something not yet performed or done. For example, a purchase agreement with contingencies.

(6) In an executory sale, lease, or loan transaction in which the broker accepts funds in trust to be applied to the purchase, lease, or loan, the parties to the contract shall have specified in the contract or by collateral written agreement the person to whom interest earned on the funds is to be paid or credited.

Obligor: The person who binds himself to another, one who has engaged to perform an obligation, one who makes a bond.

Impound Account: A trust

The only other situation where a real estate broker is allowed to deposit trust funds into an interest-bearing account occurs when the broker is acting as an agent for a financial institution which is the beneficiary of a loan. In this case the broker may, pursuant to CalBRE Reg, 2830.1, deposit and maintain funds received from or for the account of an obligor (borrower)



account established to set aside funds for future needs.

into an interest-bearing trust account in a bank or savings and loan association in order to pay interest on an impound account to the obligor in accordance with CC §2954.8, as long as the following requirements are met:

These are better known as “escrow impound accounts” – accounts which lenders create to collect “up-front” money from the borrower when he takes out a mortgage to cover future expenses such as property taxes and insurance.

(1) The funds received from or for the account of the obligor are for the future payment of property taxes, assessments, or insurance relating only to a property containing a one-to-four family residence.

(2) The account is in the name of the broker as trustee.

(3) All of the funds in the account are covered by insurance provided by an agency of the federal government.

(4) All of the funds in the account are funds held in trust by the broker for others.

(5) The broker discloses to the obligor how interest will be calculated and paid.

(6) No interest earned on the trust funds shall inure directly or indirectly to the benefit of the broker or to any person licensed to the broker.



5 FAIR HOUSING EXCERPT: “FAIR EMPLOYMENT AND

HOUSING ACT”

The following is §2.4.3, “Fair Employment and Housing Act”, from our three-hour course, Fair Housing, 2016 Edition.

The 1963 Fair Employment and Housing Act (Government Code §§12900 – 12996) created the Department of Fair Employment and Housing (DFEH) . The DFEH is the proxy enforcement authority for HUD’s Fair Housing Act (FHA).

The “Housing Act” portion of the California Fair Employment and Housing Act is also known as the Rumford Act.

The Rumford Act has been amended several times to make it “substantially equivalent” to the FHA. The Rumford Act is more expansive than the FHA in that it includes the five additional State protected classes (sexual orientation, marital status, ancestry, source of income, and age).

History

William Byron Rumford

Click here ► to hear a preview of a documentary about Assemblyman Rumford and click here to learn how REALTOR®’s tried to defeat his fair housing act.

Click here for a Facebook page dedicated to the legacy of Byron Rumford.

In 1963, five years before the passage of the FHA, the California legislature passed the Rumford Act. The Rumford Act prohibits discrimination in all aspects of housing. It is named after the man most responsible for its passage, William Byron Rumford – a pharmacist/Assemblyman from Oakland/Berkeley.

The California Real Estate Association (now CAR®) led an effort to repeal the Rumford Act. This effort resulted in Proposition 14. This initiative proposed a State constitutional amendment which in effect would have nullified all housing acts – especially the Rumford Act – and would have spelled out in the Constitution the unrestricted freedom of owners to sell their properties to whomever they pleased.

In November 1964, Proposition 14 was put before the voters. The voters approved it by a 2 to 1 majority.

In 1966 the California Supreme Court found Proposition 14 unconstitutional. Its decision was appealed to the U.S. Supreme Court and on May 29th 1967, a year later, in a 5/4 decision the U.S. Supreme Court upheld the California Supreme Court’s decision which declared Proposition 14 unconstitutional.

And still the effort to repeal the Rumford Act was not over. When Ronald Reagan ran for governor, one of his key campaign slogans was “Repeal the Rumford Act!” A final legislative effort in 1967 to repeal the Rumford Act was blocked by one of the three Republican assemblymen that had originally voted for it – William Bagley.

https://www.youtube.com/watch?v=uNUBywDN-ms

http://www.blackpast.org/aaw/california-fair-housing-act-rumford-act-1963-1968

https://www.facebook.com/fairlegislation



Over the years, additional fair housing measures have been passed so that today, California’s fair housing laws are very similar to federal laws.



6 RISK MANAGEMENT EXCERPT: “LITIGATION”

The following is §2.10.5 “Litigation”, from our three-hour Risk Management, 2016 Edition course.

Other than trial by combat, civil litigation is the worst way to resolve a dispute. It is expensive, time consuming, lengthy, and painful. Because litigation is complex, most litigants must hire an attorney at a cost of hundreds of dollars per hour.

Litigation starts with a lawsuit (aka, a “complaint”). The person initiating the lawsuit is the “plaintiff”; the person sued, the “defendant.” The plaintiff typically sues anyone he believes responsible for his losses and who has the means to pay damages.

Defendants with “deep pockets” – especially those with E&O – are especially prized. Under California law, the plaintiff may collect his entire money judgment from the defendant with the deepest pocket even if that defendant was found only one percent liable for the plaintiff’s injuries (see Wiki’s article on “Joint-and-Several Liability”).

The plaintiff initiates a lawsuit by filing a “complaint” at the county courthouse. The complaint states the causes for the action, the factual justification, and “prays” the court to grant him “relief” (i.e., money or some other court-ordered form of restitution).

A typical complaint is composed to intimidate the defendants into quickly paying a settlement so as to not incur ruinous litigation costs. If the defendant fails to file an “answer” (a rebuttal), the plaintiff is entitled to a default judgment in the full amount of his claim. Often, the defendant returns his answer accompanied by his own complaint (“cross complaint”) in pursuit of the strategy that the best defense is a good offense.

After the defendant files his answer, the parties engage in “discovery” to compel one another to reveal the facts each needs to prevail at trial. Discovery may consist of written questions requiring written answers (“interrogatories”), witnesses questioned before a court stenographer (“depositions”), and compulsory exchanges of documents (“subpoenas”). During the discovery process, the parties are free to amend their complaints with new causes of action and claims for additional damages.

Every step in civil litigation can be delayed by legal challenges argued before a judge (“motions”). Often these challenges are initiated by the fiscally stronger party to force the weaker party to drop his suit or to settle for pennies on the dollar.

Only a tiny percentage of suits are ever resolved by judge or jury. To prevail in a civil trial, the plaintiff need only convince 3/4th’s of the jury (often comprised of government workers and pensioners) that his defendant was most likely responsible for his injuries (source). The standard of proof in

civil cases is “preponderance of evidence” –meaning the plaintiff need only convince the judge or jury that his claim for damages is more likely just than unjust.

http://en.wikipedia.org/wiki/Joint_and_several_liability

http://en.wikipedia.org/wiki/The_best_defense_is_a_good_offense

http://education.occourts.org/jsthe_jury_system.asp



Even after a judgment is rendered, litigation may continue. Any party may appeal the decision if he believes it was based on legal error. If the appeal is rejected, the “appellant” may appeal to a higher court and if that appeal is unsuccessful appeal to an even higher court and so on until the case is either accepted or rejected by the final court of appeals: (1) the California Supreme Court for cases related to State law, or (2) the U.S. Supreme Court for case related to federal law.

If the plaintiff prevails and is awarded a money judgment, he has the

frequently difficult and sometimes impossible task of collecting it – neither the court nor the sheriff will assist him. If the plaintiff (now called the “judgment creditor”) is lucky, the defendant (called the “judgment debtor”) will pay without complaint. But often the judgment creditor is unlucky. His efforts to collect can by thwarted in innumerable ways; first and foremost:

the big “BK” – bankruptcy – the end of the road for the plaintiff where the plaintiff more often than not collects a great big bupkis for all his time, expense, and anxiety.



7 MANAGEMENT AND SUPERVISION EXCERPT: “NOTIFICATION OF

HIRES/TERMINATIONS”

From the Broker Evaluation Compliance Manual .

This section relates only to the salesperson licensee. As will be explained later, broker associates have different requirements.

Whenever a salesperson enters the employ of a broker, the broker shall notify the Commissioner of that fact within five days. This notification shall be given on a form prepared by the Bureau and shall be signed by the broker and the salesperson. The form of notification shall provide at least the following information:

(1) Name and business address of the broker. (2) Mailing address of the salesperson, if different from the business

address. (3) Date when the salesperson entered the employ of the broker. (4) Certification by the salesperson that he has complied with the

provisions of BPC §10161.8(d) . Whenever a real estate salesman enters the employ of a new real estate broker he shall mark out the name of his former broker on the face of the license and type or write the name of the new employing broker in ink on the reverse side, and date and initial same.

(5) Name and business address of the real estate broker to whom the salesperson was last licensed and the date of termination of that relationship.

(6) Certification by the salesperson that the predecessor broker has notice of the termination of the relationship.

If the saleperson’s license is restricted, the broker must use Restricted Salesperson Change Application (RE 214A) to add or remove a restricted licensee from their employ.

A broker may add or remove a salesperson from their employ by either completing a Salesperson Change Application (RE 214) or doing the same online using the Bureau’s eLicensing System. Instructions for using this system can be found on the Bureau’s website and then by searching for the eLicensing Tutorial.

As an acceptable alternative to (5) and (6) above, form Salesperson Change Application (RE 214) may be utilized by the predecessor broker to give notice of the termination of the broker/salesperson relationship as required by BPC §10161.8(b) if this notice is mailed to the commissioner not more than ten days following such termination.

Whenever employment of a real estate salesman is terminated, the broker shall immediately notify the Commissioner thereof in writing.

Reference: Real Estate Law Book, BPC §10161.8; CR 2752

Although a broker may be employed by another broker to perform in the same capacity as a salesperson, CalBRE does not require the employing broker to notify the Bureau when hiring or terminating a broker-associate as it does for salespersons. Moreover, while a salesperson licensee must “hang” his license with a single broker, a broker-associate is a free agent who may work with multiple brokerages in addition to operating under his individual broker license and/or work with his own clients.

An associate broker is required to report to CalBRE all addresses where he regularly conducts licensed activities. He may report multiple addresses (each address other than the broker’s primary business address it calls a “branch”) using eLicensing or CalBRE Form RE 203 . (Source )

http://www.dre.ca.gov/files/pdf/brkrcomp.pdf

http://codes.findlaw.com/ca/business-and-professions-code/bpc-sect-10161-8.html

http://www.calbre.ca.gov/files/pdf/forms/re214a.pdf

http://www.calbre.ca.gov/files/pdf/forms/re214a.pdf

http://bre.ca.gov/files/pdf/forms/re214.pdf

https://secure.dre.ca.gov/elicensing/

http://www.calbre.ca.gov/files/pdf/brkrcomp.pdf




http://www.calbre.ca.gov/files/pdf/mlb/mlb_fall05.pdf



8 CONSUMER PROTECTION READER (CPR)

The textbook for the Consumer Protection Reader, 2016 Edition (CPR) is about 230 pages long. It is the textbook for two courses: (1) our 12-hour CPR, Part 1, and (2) our 15-hour CPR, Part 2.

The CPR textbook has two sections: The first is entitled “Defensive Real Estate” which is a continuation of our Risk Management course; the second section is entitled “Consumer Protection Articles” which consists of over 100 articles which together provide a thorough review of changes affecting California real estate brokerage over the past four years. Areas covered include law, taxes, industry, financing, mortgages, settlement, risk management, and home ownership.

The following four sections are excerpts from the CPR.

8.1 CPR PART1 EXCERPT #1: “LITIGATION”

Dispute resolution by civil litigation is awful.

Civil litigation is expensive, lengthy, stressful, disruptive, and uncertain. Nevertheless when the litigated matter is truly important, when the disputants are irreconcilable, when the stakes are high, and when money is of no object; dispute resolution via civil litigation is the best and fairest means of justice available.

Here is how civil litigation works …

First, the easy part: The plaintiff files a “complaint” against one or more defendants and has each served with the complaint. (Someone, often the sheriff, hands the written complaint to a defendant.)

The complaint, as with all aspects of civil litigation, is highly formal. It must cite recognized “causes of action” (e.g., “negligent misrepresentation”, “fraudulent concealment”), cite supportive allegations, and “pray” for relief usually quantified as monetary damages. Most complaints are fashioned from boilerplate, modified by attorneys, naming anyone conceivably liable for their client’s injuries. Attorneys take special care to name defendants (1) that have pockets deep enough to pay for their plaintiff’s damages, (2) who may be willing to settle out of court in exchange for having their name dropped from the complaint, or (3) have insurance policies with high liability limits.

Online services (example)

provide cookbooks of sample complaints in Word format.

You need to understand just how easy it is for someone who knows the local court rules and has a sample book of pleadings to file suit . It costs about $370 to $435 to file the complaint with the court (source ) and about $40 per defendant for the sheriff to serve it (source).

Most complaints (aka, Statements of Claim) “pray for relief” in an extortionate amount. Most of these pleadings are hyperbolic screeds which allege any and every conceivable wrongdoing the client and his attorney believe they have any chance of proving in court.

http://www.jurisdocuments.com/SampleDocs.htm

http://www.lacourt.org/forms/pdf/fees/fee-schedule-2015.pdf

http://ocsd.org/divisions/custody/court/civil/fees



The psychological strategy used to craft the complaint is “shock-and-awe.” Often its objective is to frighten the defendants into quickly settling out of court to avoid ruinous legal expenses.

If you are served with a complaint, you need to respond – usually within 30 days – otherwise the plaintiff can seek a default judgment from the court in the full amount of his claim.

Click here ► to listen to a

humorous and musical look at billing from the attorney’s perspective.

When served with a complaint, your first thought will be to move to Mexico. Your second thought will be to find an attorney to be your champion. Any attorney you approach will demand a retainer to draft an “answer” or to seek an immediate settlement with the plaintiff’s attorney. The retainer is likely to be in the range of $5K to $10K. At a rate of about $250/hour, $10K buys you 50 hours of your attorney’s time. Your attorney bills you for every minute spent on your case; say “hello” and he will charge you for a quarter hour – his minimum billing unit . When your retainer has been depleted, he will request another advance – and so on until you settle the case or, more likely, run out of money.

In rare cases, a judge will demand that a plaintiff pay the defendant a hefty fine for having brought to his court a meritless lawsuit. You can read about such a case in the below article, “Meritless Lawsuit Against Agent Draws Sanctions.”

If you know your plaintiff’s case is without merit, you might harbor fantasies of retaliating with a counterclaim alleging “abusive process” and/or “malicious prosecution.” You cannot! Both causes of action require the case on which it is based to be first decided by a court in your clear favor before you can file a complaint alleging either claim. And even if you should prevail and file suit alleging either claim, the evidentiary bar required to support them is so high that your chances are, practically speaking, zero .

Answer: A written pleading by which the defendant responds to the plaintiff’s complaint.

Assuming you can find an attorney and can afford his retainer, your attorney has a number of ways he can respond: (1) he can file for an extension, (2) he can challenge the legality of the complaint (a “demurrer”), (3) he can file different types of motions to delay or stop (“quash”) the complaint, (4) he can answer the complaint, or (5) he can file an answer with a cross-complaint (or “countersuit”) thereby calling and raising the ante for you and your plaintiff.

After you file your answer, next comes the “discovery” period during which your plaintiff may take all the time in the World to “discover” the evidence needed to support his case.

Everything discovered by your plaintiff becomes a matter of public record which anyone can access (many jurisdictions are online). At any time your plaintiff may amend his complaint compelling you to answer with your attorney’s help at his usual fee.

Eventually, if the case is not settled or dropped, it may come to trial. If the claim includes money damages, you and your plaintiff can agree to a “bench trial” or a “jury trial.” If you choose a “bench trial,” a judge will hear the evidence and decide your case; otherwise, a jury will decide your case.

Your plaintiff’s burden-of-proof is minimal; all he has to do to prove an allegation is to convince the trier-of-fact (judge or jury) that his allegation is more likely true than that it is not true.

It comes as a surprise to many people that many attorneys who specialize in civil litigation have no trial experience . Why? Because the time and

https://www.youtube.com/watch?v=FFVtkpsWCn4



money required to prepare for and conduct the trial is so expensive that few litigants can afford to do so.

For fiscal year 2013-14, Superior Court resolved 193,190 unlimited civil cases (cases where the amount in controversy is over $25K). Of these 19% went to trial. For limited cases, 6.5% of the 486,597 went to trial. (Source ) (NOTE: Limited civil cases follow simplified rules compared to unlimited civil cases.)

Judge Judy is the Queen of Hearts of her court room.

If you have to go to court, you will find it a nasty place. Most litigants are half mad from years of frustration after having suffered ruinous legal expenses. The court personnel, including judges, have been made surly and cynical from constant stress. On the other hand, your attorney is in his element and is earning your money.

The judge treats you as if you were his ignoble subject and expects you to treat him as if royalty . Woe to you should you fail to address the judge as “your Honor” or remain seated when he swaggers into his courtroom. Show him any sign of disrespect, real or imagined, and he may find you “in contempt of court” and impose upon you a fine or even time in jail.

In civil cases the standard of proof is “a preponderance of the evidence.” What does this mean? It means that if the trier-of-fact (judge or jury) believes your plaintiff is just even slightly more right than are you, then the trier-of-fact will find for your plaintiff.

The jury usually consists of 12 members, many of whom will be postal workers, government employees, and pensioners. To be found liable (the term “guilty” does not apply to civil cases), three fourths of the jury must agree find for the plaintiff. Juries on civil cases cannot hang.

After the trier-of-fact renders its decision, after you have spent tens if not hundreds of thousands of dollars in legal expenses, it still is not over! Either party may appeal. Even a prevailing plaintiff may appeal if he regards the damages awarded to him as insufficient.

An appeal must be based on either a procedural error or a serious error in the application of the law; that is, a procedural error that could have affected the outcome. These are called “reversible errors.” Reversible errors include (1) erroneously instructing the jury on the law, (2) permitting improper argument by an attorney, and (3) the improper admission or exclusion of evidence.

An appeal is not a new trial – no new evidence is heard or old evidence challenged. The facts of the case cited in the appeal must be from the original court transcript (available for a fee from the court stenographer). It is also usually a requirement that the legal errors alleged by the appellant must have been challenged when they occurred during the trial.

Very few civil cases between private litigants ever make it to the California Supreme Court. Those that are accepted for review must involve unsettled and important issues of California law.

The appeal is a written document based on the trial transcript. It provides a legal argument for setting aside the original judgment. If the appellate court believes your appeal has no merit, it “affirms” the lower court’s decision thereby letting the decision of the lower court stand. Should this occur, the appellant may appeal to a higher Court of Appeal. The last stop for a state-litigated case is usually the California Supreme Court ; the last stop in a federally-litigated case is the U.S. Supreme Court.

http://www.courts.ca.gov/documents/2015-Court-Statistics-Report-Introduction.pdf

http://en.wikipedia.org/wiki/Jury

http://en.wikipedia.org/w/index.php?title=Improper_argument&action=edit



If a Court of Appeal agrees to hear your case, it listens to oral argument and renders its decision – usually many months later. It is from these decisions that the common law evolves.

Ultimately one party will prevail and a judgment will be issued by the court. If the judgment includes a cash award, more legal maneuvering may be required to collect it.

The homestead exemption in Florida is unlimited. This means that a bankrupt with 20 million dollars of equity in his Florida mansion may keep his mansion after discharging his debts

(source).

Often judgment debtors, when faced with a demand to pay a large award, file for bankruptcy to discharge the judgment. (Money judgments for personal injuries may not be discharged through bankruptcy). Before declaring bankruptcy, impending bankrupts may divest their assets into safe harbors such as offshore banks, precious metals, and homesteads in Florida . Bankruptcy usually defeats the judgement creditor.

Said Robert Bass in a column written for RealtyTimes.com:

I can confidently speak for countless litigators who will tell you that litigation is misery… it is the worst way to resolve disputes. Alas, it is also the best system that mankind has been able to come up with. (source).

8.2 CPR PART 1 EXCERPT #2: “VISUAL RED FLAGS”

Click here for Barbara Nichols’

site.

The following lists of visual, written, and neighborhood red flags are taken from an article in Realty Magazine Online by Barbara Nichols. Ms. Nichols is a risk management expert who serves as an expert witness in real estate related lawsuits:

To spot fire or insect damage, push on the wood to see if it’s spongy or scrape off some paint to see underneath.

Efflorescence

Look for water marks or efflorescence on the foundation. Efflorescence is a white chalky substance left behind by water on the outside of the cement or brick.

Look to see if the ground slopes toward the house. If it does, consider it likely that water has seeped into the foundation and may have caused or will cause dry rot and/or accelerate termite infestation.

Use your nose and fingers to probe for water. Where there is water there may be dry rot, mold, or termites.

Damaged Flashing

Look for curling, damaged, or missing shingles or flashing . If you find such defects check for water damage underneath.

Check if the floors are level. If they are not, be alert to possible structural damage.

If you find stains on the ceiling suspect a damaged roof.

If retaining walls are leaning, suspect ground movement.

Be suspicious of any structural irregularities such as changes in ceiling or floor levels, the presence of exterior wall surfaces inside the home, or anything else that suggests an unpermitted

http://www.nolo.com/legal-encyclopedia/florida-bankruptcy-homestead-exemption.html

http://realtytimes.com/rtpages/20000523_mediatelitigate.htm

http://www.barbaranichols.net/

http://realtormag.realtor.org/law-and-ethics/law/article/2001/05/law-you-find-and-conquer-red-flags



Termite Piles

construction.

Look for recent repair work. For example, wide cracks in a patio deck that may have been filled with cement or recently laid tile.

Look for termite piles along walls.

If you find red flags, be sure to question the seller about them. If the seller is evasive or has unconvincing answers, consider his evasiveness a red flag.

Be sure to check with your home inspector after he has completed his inspection. If he did not spot the same red flags you found, find out why.

8.3 CPR PART 2 EXCERPT #1: “NOISY NEIGHBORS BE GONE”

by Carla Hill for Realty Times, April 3, 2012 Copyright© 2012 Realty Times®. All Rights Reserved. Used With Permission.

From noisy neighbors and adolescent garage bands to urban living spaces it can be hard to find some peace and quiet.

Aside from relying on city and HOA ordinance enforcement, a strong hand with teenagers, or complaining to the noisy party, it can be tough to find a solution to a noisy space.

Enter QuietFiber® noise absorbing material . This versatile material is a solid way to address sound issues and can be installed as an easy do-it-yourself project. According to the makers of this revolutionary product, “QuietFiber is the only sound dampening product on the market that can be custom tailored to create a complimentary design element in any space. You have the sound abatement properties you need in a product that can be completely hidden under a tapestry or in strategic spots throughout the room, or disguised as an artistic element within the space.”

QuietFiber® is one of several noise absorbing products. A list of others can be found here.

When complaints from neighbors began to trickle in for club owner Bobbie Rahmani in Los Angeles, California, he knew he had to find a way to deaden the noise and relieve his stressed out neighbors. He also wanted a solution that looked as good as it worked.

“We haven’t had any complaints since we hung the panels, and no news is always good news,” Rahmani said of the noise deadening qualities of the QuietFiber treatments.

Generator enclosure

This versatile material is a solid way to address sound issues and can be installed as an easy do-it-yourself project. High sound absorbency QuietFiber is a two-inch thick DIY interior noise solution that can be cut to fit and simply hot glued underneath a bar, cabinets, countertops, tables, chairs, behind a wall tapestry or curtains. Slide a QuietFiber “pillow” on top of cabinets, or anywhere else that reverberant noise and echo is a problem. Easily cut to size with a serrated knife, Quiet Fiber can be concealed almost

http://www.grainger.com/category/sound-proofing-and-acoustical-absorption-products/noise-control/safety/ecatalog/N-hnn



soundproofed with QuietFiber. anywhere.

This product can be the solution for walls and ceilings. Plus, as an added bonus it is fire-rated for floor, 100% recyclable, and 100% USA made.

To see an impressive Youtube video demonstration of this

product, click here ►.

Are you looking for solutions in your new construction? Consider using this solution in walls between studs and under drywall. Existing-homes can benefit as well. That’s what the makers of this new product are counting on!

8.4 CPR PART 2 EXCERPT #2: “FALSE PREDICTIONS AREN’T

FRAUD”

by Bob Hunt for Realty Times, October 13, 2014 Copyright© 2014 Realty Times®. All Rights Reserved. Used With Permission.

“Don’t worry about an adjustable loan or negative amortization. Look at how your property has been appreciating! That’s not going to stop; and you’ll always be able to refinance or to sell at a profit.”

Many people have said that or something like it. Most of the time, most of them were wrong. Could they be sued? Of course. You can be sued for just about anything. But, would they lose the law suit? Not necessarily. And that – to most of us, I suspect – is somewhat surprising.

Two recent California Appellate Court decisions deal with law suits where representations about the future value of the plaintiff’s real estate was a central element. The similarity of both of the complaints and the decisions merit discussing them together. One is Cansino v. Bank of America, 2014; the other is Graham v. Bank of America, 2014.

The Cansinos were classic serial borrowers – a species nurtured by the financing climate of the early 2000s. In 2000, they obtained a $280,000 mortgage (five year, fixed-rate) on their Milpitas home. In 2002, they refinanced with a $386,000 loan (fixed rate for three years). In 2005, they refinanced again for $496,000 (initial rate was 1%; five years minimum monthly payments would result in negative amortization). At that time, the lender appraised their home at $620,000. The lenders representatives “told plaintiffs their home would appreciate and they would be able to sell or refinance the home at a later date before having to make higher monthly loan payments or pay an increased principal of $620,000 which would result from negative amortization.”

According to the record, “In 2010, plaintiffs discovered that their home was valued between $350,000 and $400,000.” As of March 2012, the balance due on the loan was approximately $625,000 and the fair market value was approximately $350,000.

The Cansinos filed suit in 2011.

The borrower in the Graham case obtained two loans in 2004, allowing him to purchase his Vista home with 100% financing. The purchase price was $489,000. The maker of the $97,800 second mortgage appraised the house at $525,000. Mr. Graham fell behind in payments in 2011. A notice

https://www.youtube.com/watch?v=AoIfQmPhpCg

http://caselaw.findlaw.com/ca-court-of-appeal/1661538.html

http://caselaw.findlaw.com/ca-court-of-appeal/1667662.html



of default was recorded in 2012 indicating he owed more than $100,000 in past due payments and costs.

In his suit against the bank, Graham alleged that “Lending Personnel made the following representations related to his loans: (a) the home had an ‘increasing and revised upwards’ – value of $525,000; (b) such was the fair market value (FMV) of the home; (c) such ‘rapid increase in the FMV’ of the home ‘demonstrated the security of the purchase’; (d) the FMV of the home ‘was ever-increasing such that the [home] could be ‘turned for a profit’ in the near future or refinanced to obtain better terms’.”

In both cases the plaintiffs alleged fraud as a cause of action. Both cases were dismissed at the trial level and then were heard at their respective districts’ Courts of Appeal.

While there were other issues at play in both cases, the Appellate Courts upheld the trial courts in each instance. The fraud issues were essentially the same and the reasoning of both courts was the same.

Predictions about a buyer’s real estate investment or the fair market value for property in the future are not actionable representations. ‘It is [settled] law that an actionable misrepresentation must be made about past or existing facts; statements regarding future events are merely deemed opinions. (Graham)

The law is well established that actionable misrepresentations must pertain to past or existing material facts. Statements or predictions regarding future events are deemed to be mere opinions which are not actionable. (Cansinos)

The courts were quite clear about this. You may well be a qualified expert in some field or another; but, when you start talking about future events, you are not representing facts, you are expressing an opinion.

So, there you have it. Those speculative and irresponsible statements that we all (now, at least) condemn, may be all of that, but they are probably not actionable in a court of law.

Please, though, don’t tell anyone that I said it was OK to make such statements.

0 calbre approved credit hours 2016, book.pdf · 2018. 3. 1. · 45hoursonline 4228 lobos road...

Documents