California Broker Real Estate Exam Prep

Salesperson License Original Examination $60 Re-Examination $60 First Rescheduled Exam $15 Subsequent Rescheduled Exam $30 COMBINATION EXAMINATION AND LICENSE APPLICATION For those applicants who want to file their examination and license application at the same time: Salesperson Examination Fee $60 License Fee $245 Fingerprint Fee * Total Due to DRE with RE 435 = $305 ORIGINAL LICENSE FEES Salesperson License Fee $245 Fingerprint Fee * Total Due to DRE $245

The California Department of Real Estate (DRE) is housed within the Business, Consumer Services And Housing Agency. The regulation of licenses is an important function of the California Department of Real Estate. The DRE was established in 1917 with the formation of the first-ever Real Estate Law in the country. With this law, licensing practices and licensees are regulated in a manner which is emulated by many other states. The California Department of Real Estate exists to serve the real property market and protects the transactions occurring in the real estate field. The DRE grants licenses to Real Estate Brokers and Salespersons. Before applying for the real estate license, all the formalities of education and experience must be cleared. The DRE also handles the renewal of the licenses.

The first time renewal requirement for salespersons licenses is 45 hours: 45 Total hours 30 Elective hours 15 Core hours Additionally, members of the NAR are required to take a Code of Ethics course every 4 years. It is possible to combine the two requirements, but be sure to verify that your CE course meets the NAR requirement for COE.

45 Total hours 30 Elective hours 15 Core hours

Elements of a contract: Every contract has certain, essential elements that need to be present to be considered valid in a court of law. At the heart of every contract is a promise between two or more persons to do or not do a particular act. Consideration These promises are bound by both parties by what’s called “sufficient consideration.” In the normal parlance of our times, or for the sake of simplicity, we can call it “money.” A simple contractual promise, backed by sufficient consideration could be: I promise to purchase your principal residence for $150,000. Offer & Acceptance Contracts must also consist of a clear offer and acceptance. If an offer is made, but has not been accepted, there can be no contract. Capacity Contracts must be entered into by two adults of sound mind. This doesn’t just mean that you must be free from mental incapacity, it also means that if you enter into a contract while under the influence of drugs or alcohol, you may be deemed incapacitated and the contract may be void. No Duress Contracts must also be entered into freely. If you are signing your name to a contract with a gun to your head, that contract is said to be entered into under duress and may be deemed invalid. While the terms of the duress may not be so dramatic, other signs of duress may be financial or emotional coercion. While contracts can be either oral or written, the law requires that certain contracts be written in order to be enforceable. Contracts for the sale of real property, for example, must be in writing. Oral argeements can be valid, but they are also rather difficult to enforce.

Escheat is a common law doctrine that transfers the property of a person who died without heirs, to the state. It serves to ensure that property is not left in "limbo" without recognized ownership.

Dower rights are property interests that one spouse holds by law in any real property owned by a spouse. Traditionally the term dower was applied to the portion assigned to a surviving wife. The portion a husband could claim was termed curtesy and was often less than the dower percent. In California, marital property is divided (after a divorce) in accordance with the legal theory of community property.

California law provides several options in ownership of real property. They are: Sole Ownership Sole ownership may be described as ownership by an individual or other entity capable of acquiring title. Examples of common vesting cases of sole ownership are: 1. A Single Man or Woman, an Unmarried Man or Woman or a Widow or Widower: A man or woman who is not legally married or in a domestic partnership. For example: Bruce Buyer, a single man. 2. A Married Man or Woman as His or Her Sole and Separate Property: A married man or woman who wishes to acquire title in his or her name alone. The title company insuring title will require the spouse of the married man or woman acquiring title to specifically disclaim or relinquish his or her right, title and interest to the property. This establishes that both spouses want title to the property to be granted to one spouse as that spouse’s sole and separate property. The same rules will apply for same sex married couples. For example: Bruce Buyer, a married man, as his sole and separate property. 3. A Domestic Partner as His or Her Sole and Separate Property: A domestic partner who wishes to acquire title in his or her name alone. The title company insuring title will require the domestic partner of the person acquiring title to specifically disclaim or relinquish his or her right, title and interest to the property. This establishes that both domestic partners want title to the property to be granted to one partner as that person’s sole and separate property. For example: Bruce Buyer, a registered domestic partner, as his sole and separate property. CO-OWNERSHIP Title to property owned by two or more persons may be vested in the following forms: 1. Community Property: A form of vesting title to property owned together by married persons or by domestic partners. Community property is distinguished from separate property, which is property acquired before marriage or before a domestic partnership by separate gift or bequest, after legal separation, or which is agreed in writing to be owned by one spouse or domestic partner. In California, real property conveyed to a married person, or to a domestic partner is presumed to be community property, unless otherwise stated (i.e. property acquired as separate property by gift, bequest or agreement). Since all such property is owned equally, both parties must sign all agreements and documents transferring the property or using it as security for a loan. Each owner has the right to dispose of his/her one half of the community property by will. For example: Bruce Buyer and Barbara Buyer, husband and wife, as community property, or Sally Smith and Jane Smith, registered domestic partners as community property. Another example for same sex couples: Sally Smith and Jane Smith, who are married to each other, as community property. 2. Community Property with Right of Survivorship: A form of vesting title to property owned together by spouses or by domestic partners. This form of holding title shares many of the characteristics of community property but adds the benefit of the right of survivorship similar to title held in joint tenancy. There may be tax benefits for holding title in this manner. On the death of an owner, the decedent’s interest ends and the survivor owns all interests in the property. For example: Bruce Buyer and Barbara Buyer, husband and wife, as community property with right of survivorship, or John Buyer and Bill Buyer, husband and husband, as community property with right of survivorship. Another example for same sex couples: Sally Smith and Jane Smith, registered domestic partners, as community property with right of survivorship. 3. Joint Tenancy: A form of vesting title to property owned by two or more persons, who may or may not be married or domestic partners, in equal interests, subject to the right of survivorship in the surviving joint tenant(s). Title must have been acquired at the same time, by the same conveyance, and the document must expressly declare the intention to create a joint tenancy estate. When a joint tenant dies, title to the property is automatically conveyed by operation of law to the surviving joint tenant(s). Therefore, joint tenancy property is not subject to disposition by will. For example: Bruce Buyer, a married man and George Buyer, a single man, as joint tenants. Note: If a married person enters into a joint tenancy that does not include their spouse, the title company insuring title may require the spouse of the married man or woman acquiring title to specifically consent to the joint tenancy. The same rules will apply for same sex married couples and domestic partners. 4. Tenancy in Common: A form of vesting title to property owned by any two or more individuals in undivided fractional interests. These fractional interests may be unequal in quantity or duration and may arise at different times. Each tenant in common owns a share of the property, is entitled to a comparable portion of the income from the property and must bear an equivalent share of expenses. Each co-tenant may sell, lease or will to his/her heir that share of the property belonging to him/her. For example: Bruce Buyer, a single man, as to an undivided 3/4 interest and Penny Purchaser, a single woman, as to an undivided 1/4 interest. Other ways of vesting title include as: 1. A Corporation*: A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having an existence and personality separate from such shareholders. 2. A Partnership*: A partnership is an association of two or more persons who can carry on business for profit as co-owners, as governed by the Uniform Partnership Act. A partnership may hold title to real property in the name of the partnership. 3. Trustees of a Trust*: A Trust is an arrangement whereby legal title to property is transferred by a grantor to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called the beneficiaries. A trust is generally not an entity that can hold title in its own name. Instead title is often vested in the trustee of the trust. For example: Bruce Buyer trustee of the Buyer Family Trust. 4. Limited Liability Companies (LLC)*: This form of ownership is a legal entity and is similar to both the corporation and the partnership. The operating agreement will determine how the LLC functions and is taxed. Like the corporation its existence is separate from its owners. *In cases of corporate, partnership, LLC or trust ownership - required documents may include corporate articles and bylaws, partnership agreements, LLC operating agreements and trust agreements and/or certificates.

If you file for bankruptcy, get into other debt trouble or have a money judgment against you, your assets are at risk. A court may order that real property, such as your home, get sold to cover your debts. Often debts and legal fees are greater than the equity you have in the home. In that case, you end up without a home and without any means of buying one. However, if you live in California, your home may be exempt from most debt sales if your equity is under a certain amount or if a certain part of that equity is protected. How much? That depends on your age, marital status and other factors. The current exemptions are: $75,000 for a single person, $100,000 if a spouse or family member shares the house with you or $175,000 if either you or your spouse is: over 65 years old, or unable to work because of disabilities, or over age 55 with income under $25,000 a year if single or $35,000 per year if married and the sale is involuntary. If the market value of the home is not high enough to cover the amount of the debt plus the applicable exemption, the property cannot be sold for debt. Even if you have more equity and the home is sold, your homestead exemption amount must be paid to you in full from the proceeds. This will help you start over.

The homestead exemption is a legal regime to protect the value of the homes of residents from property taxes, creditors, and circumstances that arise from the death of the homeowner spouse. Homestead tax exemptions exempt a certain dollar amount or percentage of home value from property taxes. They’re called “homestead” exemptions because they apply to primary residences, not rental properties or investment properties. You must live in the home to qualify for the tax break.

Funds may not be disbursed to any party to the real property contract until final closing. A Broker may not allocate funds to a Salesperson until the transaction is fully funded. Commissions can only be paid to a licensed real estate broker who, in turn, may pay all or a portion of the commission to a licensed salesperson or broker associate provided that the salesperson or broker associate has a written contract with the broker. (Business and Professions Code §§ 10136, 10137, and 10138 and 10 CCR, Chapter 6, § 2726). Practice Tip: Your Broker will have set policies in place for the disbursement of commission checks. Every brokerage has certain rules in place for this process. It is a discussion that you will want to have before becoming an Independent Contractor.

To obtain a real estate salesperson license, you must first qualify for and pass a written examination. Those who pass the examination are provided a license application which must be submitted to and approved by the DRE. This license is required of individuals who conduct licensed real estate activities as described in the Real Estate Law under the supervision of a licensed broker. A license may also be obtained by a person who does not immediately intend to be employed by a broker. However, a salesperson without an employing broker may not perform acts requiring a real estate license. GENERAL REQUIREMENTS Age: You must be 18 years of age or older to be issued a license. Residence: If you are not a California resident, see Out-of-State Applicants. Honesty: Applicants must be honest and truthful. Conviction of a crime may result in the denial of a license. Failure to disclose any criminal violation or disciplinary action in an applicant's entire history may also result in the denial of a license.

2961. Grounds for Issuing an Order of Suspension or Debarment. An order of suspension or debarment pursuant to Section 10087 may be based upon a finding by the Commissioner of one or more of the following grounds: (a) The suspension or bar is in the public interest and the person subject to suspension or bar has committed or caused a violation of Division 4 (Sections 10000 through 11288) of the Code or a rule or order of the Commissioner and the violation was known or should have been known by the person committing or causing the violation. (b) The suspension or bar is in the public interest and the person subject to suspension or bar has committed or caused a violation of Division 4 (Sections 10000 through 11288) of the Code or a rule or order of the Commissioner and the violation has caused material damage to the public. (c) The person subject to suspension or bar has been convicted of or pleaded nolo contendere to any crime involving dishonesty, fraud, or deceit, or any other crime reasonably related to the qualifications, functions, or duties of a person engaged in the real estate business. (d) The person subject to suspension or bar has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the real estate business. The California Business and Professions Code outlines the specific acts of a licensee which could lead to lose of license.

Signatures of witnesses are usually required for a valid will. A valid holographic will does not require witnesses. To prepare a holographic will, the testator writes his wishes in his own handwriting. California Probate Code Section 6111 sets out the law for holographic wills. In order to create a valid holographic will in California, a testator writes the material portions of the will in his own handwriting. His signature must also be present on the will. A testator is not required to have witnesses to his signature when the will is written and signed in his own handwriting. For a valid holographic will, the court must be able to determine the date of execution. The testator should include the date of execution when preparing the holographic will. Dates of execution matter with wills because the most recent will is usually the legally valid one. Like all wills, a holographic will distributes the assets of the testator. To be considered valid by a California probate court, the will must be legible. Assets not distributed by the holographic will may be distributed according to state law. To write a valid holographic will, a testator must have testamentary capacity. The testator must know what his assets are and who his relatives are. An exact understanding of property is not required, but the testator must know generally what he owns and understand that he is determining where his assets will go after his death. Testamentary capacity is required for all wills.

A holographic will is a will and testament that has been entirely handwritten and signed by the testator.

California does not recognize real estate licenses from other States. In order to conduct licensed activities in California, you must have a California real estate license. California has no reciprocity with any other state to allow a waiver of any of the requirements to obtain a license.

Anything that can be legally owned may be called property. All property can be grouped into two main categories: real property and personal property. Personal property can be further classified as chattels and intangibles. Real property describes land and things that are attached to the land, which is why land is sometimes called real estate or realty. Even though wood, steel, and other building materials aren’t land themselves, when they’re built into structures attached to the land, they become real property, too. Trees and other plants naturally growing on the land are also part of the real property. But plants that require regular human cultivation and labor, such as grains and vegetables, sometimes aren’t treated as part of the real property.

In California a landlord is required to provide a safe living environment for the tenants and the law has been established under the California Civil Code. The failure of a landlord to provide such conditions can lead to violation of the law and impose civil and, at times, even criminal liability upon the landlord. Under the California Civil Code, landlords of a property must ensure that certain conditions are met which make the living space habitable and safe for potential lessees. These conditions include ensuring proper electric, gas, and plumbing utilities, as well as installing proper locks and security systems. If a landlord fails to meet these requirements, the lessee has the option of deducting the costs of repair from his rent or vacating the premises with no constraints. A landlord can also be held liable for certain breaches of security that occur on his property, if the unsafe condition or act could have been foreseen or prevented. In terms of residential leases, in order for a landlord to be allowed to place rental units on the market, the landlord must first ensure that all of the following conditions which make the building ‘fit for human occupancy’ are met: [Civil Code Secs. 1929, 1941] Effective waterproofing and weather protection of roof and exterior walls Well-maintained plumbing and gas facilities compliant with law in effect at the time of installation Water supply compliant with applicable law that is capable of producing hot and cold running water Well-maintained heating facilities compliant with applicable law at the time of installation Well-maintained electrical lighting compliant with applicable law at the time of installation Building, grounds, and appurtenances kept sanitary and free from debris and vermin at the time of rent or lease Sufficient number of receptacles for garbage Well-maintained floors, stairways, and railings Locks conforming to code [CA Civil Code Sec. 1941.3] Dead bolt lock on each main swinging entry door Window security or locking devices for windows capable of being opened The landlord is not only responsible for seeing to it that the aforementioned conditions are met at the time of lease, but he is also obligated to oversee all necessary repairs, except for in the event that the tenant violates any of the following obligations: [CA Civil Code Sec. 1941.2] To keep the area of the property which he or she occupies clean and sanitary To dispose of all garbage from his or her unit in a clean manner To properly use all electrical, gas, and plumbing fixtures To ensure that no one who enters the premise with his or her permission causes damage to any part of the unit or its facilities To occupy the premise as it was designed to be used, with separate portions for living, sleeping, cooking, etc. Because the landlord has a duty to maintain the premise and carry out any and all necessary repairs, the landlord has the reasonable right to enter the premise to do so [CA Civil Code Sec. 1954].

The only way a landlord can legally evict a tenant in California is by going through the courts and winning an eviction lawsuit, or unlawful detainer suit. Even after winning the eviction lawsuit, the landlord must use a sheriff to actually perform the eviction. In California, a landlord may be able to evict a tenant if the tenant: Fails to pay the rent on time; Breaks the lease or rental agreement and will not fix the problem (like keeping your cat when pets are not allowed); Damages the property bringing down the value (commits "waste"); Becomes a serious nuisance by disturbing other tenants and neighbors even after being asked to stop; or Uses the property to do something illegal. In most cities, the landlord can also evict the tenant: If the tenant stays after the lease is up,* or If the landlord cancels the rental agreement by giving proper notice.* *If your city has rent control, these 2 reasons may not be good enough to evict a tenant. Contact your local city or county government office to find out if you live in a rent-controlled area. Or talk to your self-help center, or a lawyer for help. A landlord cannot evict a tenant for an illegal reason like discrimination or to get back at the tenant for taking action against the landlord, like filing a complaint because the property’s heating system is broken. If the landlord has followed all the proper procedures, and the tenant either does not answer the court papers, or the tenant answers but the court decides in favor of the landlord, the court will order the sheriff to evict the tenant. If the court decides for the tenant, the tenant will get to stay. It is against the law for landlords to evict tenants on their own, without going to court AND getting a court order directing the tenant to move out. Even if the tenant is months behind on the rent, without a court order the landlord cannot: Physically remove the tenant; Get rid of the tenant's personal property; Lock the tenant out; Cut off the utilities, like water or electricity; Remove outside windows or doors; or Change the locks.

California does not require an applicant for a salesperson's license to have a high school diploma or college degree. There is also no state residency requirement.

Be at least 18 years of age Provide proof of completion in 135 hours of required education (45 credit hours in Real Estate Principles; 45 credit hours in Real Estate Practice course; and 45 credit hours in one additional state approved course). Pass the salespersons exam. After passing the examination, you will be sent a Salesperson License Application. Within one year of the examination date this form must be completed and returned along with the licensing fee. Also submit your Live Scan Request form (for submitting fingerprints). We recommend completing a combo licensing/exam application, get fingerprinted, and submit all fees right away. This will speed up your application process. A salesperson is licensed to act on behalf of a broker, and may not act as a real estate agent independently. A salesperson may only work for one broker in California at a time. California does not require an applicant for a salesperson's license to have a high school diploma or college degree. There is also no state residency requirement. For more information about the exam and state application go to: http://www.dre.ca.gov

The agency disclosure form sets forth the real estate broker's disclosure obligations and describes certain duties a licensee owes to a principal in a real property transaction, whether the broker is the "seller's agent," the "buyer's agent", or is acting as a "dual agent." The form must contain the entire text of § 2079.16 of the Civil Code, and it should be delivered to the principal in a real property transaction as soon as practical and when the relationship between the agent and the principal becomes more then casual. (Civil Code § 2079.14). The listing broker or his or her agent (the salesperson or broker associate) must deliver the form to the seller before entering into a listing agreement. The cooperating or selling broker or his or her agent (the salesperson or broker associate) must provide the form to the seller as soon as practical and before presenting the offer. Should the cooperating or selling broker not deal face to face with the seller, then the form may be delivered by the listing broker. The agency disclosure form may also be delivered to the seller by certified mail. The cooperating or selling broker must deliver the form to the buyer as soon as practical before signing the offer to buy. Should the offer be not prepared by the cooperating or selling broker, then the form must be delivered to the buyer no later than the next business day following the receipt of the offer from the buyer.

Mortgage points, also known as discount points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. This is also called “buying down the rate,” which can lower the monthly mortgage payments. One point costs 1 percent of the mortgage amount (or $1,000 for every $100,000).

The four unities is a concept in the common law of real property describing conditions that must exist in order for certain kinds of property interests to be created. Specifically, these four unities must be met in order for two or more people to own property as joint tenants with right of survivorship, or for a married couple to own property as tenants by the entirety. Unity of time Interest must be acquired by both tenants at the same time. In common law, the "time" requirement could be satisfied only by using a "straw man" to create a joint tenancy. The party creating the joint tenancy would have to convey title to a straw man, who would then transfer title to the two parties as joint tenants. Unity of title The interests held by the co-owners must arise out of the same instrument. Unity of interest Both tenants must have the same interest in the property. This means that the joint tenants must have the same type of interest, and the interest must run for the same duration. For example, if X and Y create a joint tenancy, both X and Y's interests must be in fee simple absolute. If, for example, X has a fee simple absolute and Y has a life estate, there is no unity of interest. Unity of possession Both tenants must have the right to possess the whole property. If any of the four unities is broken and it is not a joint tenancy, the ownership reverts to a tenancy in common. The unique aspect of a joint tenancy is that as the joint tenancy owners die, their shares accrue to the surviving owner(s) so that, eventually, the entire share is held by one person. Unity of marriage In order for there to be a tenancy by the entirety this fifth unity must be present. Marriage combined with the preceding four unities creates a tenancy by the entirety. A tenancy by the entirety gives rise to certain legal rights, such as rights of survivors, when one spouse is deceased that interest automatically passes to the surviving spouse. Additionally, the creditor of only one of the spouses cannot take the property held as tenants by the entirety; both spouses must be indebted to the creditor. Unlike with joint tenancies, in tenancies in common the co-ownership arrangements are such that each of the co-owners holds a distinct share, or proportions of entitlement. Tenancies in common take effect only in equity. There are two defining characteristics to tenancies in common, both of which set tenancies in common apart from joint tenancies: 1. There is no right of survivorship between tenants in common, and 2. The only unity which exists between the tenants in common is the unity of possession.

Economic life is the expected period of time during which an asset remains useful to the average owner. The economic life of an asset could be different than its actual physical life. Estimating the economic life of an asset is important for businesses so that they can determine when it's worthwhile to invest in new equipment, allocating appropriate funds to purchase replacements once the equipment's useful life is met.

The foundation plan is a plan view drawing, in section, showing the location and size of footings, piers, columns, foundation walls, and supporting beams. A foundation plan ordinarily includes the following: • Footings for foundation walls, piers, and columns (hidden lines) • Foundation walls • Piers and Columns • Dwarf walls (low walls built to retain an excavation or embankment) • Partial walls, Doors, and Bath fixtures if the house has a basement • Openings in foundation wall such as windows, doors and vents • Beams and Pilasters • Direction, size, and spacing of floor joists or trusses • Drains and sump (if required) • Details of foundation and footing construction • Complete dimensions and notes

Under the Federal Interstate Land Sales Full Disclosure Act, right of rescission lasts for seven days. Also recall that the number of lots in discussion under this act would be 100 or more lots being sold from state to state with a seven day right of rescission.

5 C’s of Credit: When an application is made for a loan, lenders assess the credit risk based on a number of factors, including the credit/payment history, income, and overall financial situation of the borrower(s). Additional information to help explain these factors, also known as the “5 Cs”, will help you better understand what lenders look for: Credit history: Qualifying for the different types of credit hinges largely on the credit history — the track record established while managing credit and making payments over time. The credit report is primarily a detailed list of a credit history, consisting of information provided by lenders that have extended credit to a borrower. While information may vary from one credit reporting agency to another, the credit reports include the same types of information, such as the names of lenders that have extended credit to, types of credit, payment history, and more. In addition to the credit report, lenders may also use a credit score that is a numeric value – usually between 300 and 850 – based on the information contained in the credit report. The credit score serves as a risk indicator for the lender based on the credit history. Generally, the higher the score, the lower the risk. Credit bureau scores are often called "FICO® scores" because many credit bureau scores used in the U.S. are produced from software developed by Fair Isaac Corporation (FICO). While many lenders use credit scores to help them make their lending decisions, each lender has its own criteria, depending on the level of risk it finds acceptable for a given credit product. Capacity: Lenders need to determine whether a borrower can comfortably afford the payments. The income and employment history are good indicators of the ability to repay outstanding debt. Income amount, stability, and type of income may all be considered. The ratio of current and any new debt as compared to the before-tax income, known as debt-to-income ratio (DTI), may be evaluated. Collateral (when applying for secured loans): Loans, lines of credit, or credit cards a borrower applies for may be secured or unsecured. With a secured product, such as an auto or home equity loan, the borrower pledges something they own as collateral. The value of the collateral will be evaluated, and any existing debt secured by that collateral will be subtracted from the value. The remaining equity will play a factor in the lending decision. Capital: While a borrower’s household income is expected to be the primary source of repayment, capital represents the savings, investments, and other assets that can help repay the loan. This can be helpful if the borrower loses a job or experiences other setbacks. Conditions: Lenders may want to know how the borrower plans to use the money and will consider the loan’s purpose, such as whether the loan will be used to purchase a vehicle or other property. Other factors, such as environmental and economic conditions, may also be considered. The 5 C’s of Credit is a common term in banking.

If the requirements of the bulk sales law are not met, the creditor could move to unravel the sale between the seller and the buyer. The buyer would stand to lose any deposit monies presented into the escrow up to that time.

The employment contract between the broker and the salesperson must be in writing because of statutory requirement. A copy of this employment contract must be kept by both the broker and the salesperson for up to three years after termination of employment. (b) (1) The Legislature finds and declares that a responsible broker, as defined in Section 10015.1, has the duty to supervise and oversee the licensed acts of each salesperson and broker associate affiliated with and working under his or her supervision, regardless of whether the retention contract with that salesperson or broker associate specifies an independent contractor relationship or an employment relationship. Broker-Salesperson Relationship – Independent Contractor or Employee – No Effect on Obligations to Public 10032. (a) All obligations created under Section 10000, and following, all regulations issued by the commissioner relating to real estate salespersons, and all other obligations of brokers and real estate salespersons to members of the public shall apply regardless of whether the real estate salesperson and the broker to whom he or she is licensed have characterized their relationship as one of “independent contractor” or of “employer and employee.” (b) A real estate broker and a real estate salesperson licensed under that broker may contract between themselves as independent contractors or as employer and employee, for purposes of their legal relationship with and obligations to each other. Characterization of a relationship as either “employer and employee” or “independent contractor” for statutory purposes, including, but not limited to, withholding taxes on wages and for purposes of unemployment compensation, shall be governed by Section 650 and Sections 13000 to 13054, inclusive, of the Unemployment Insurance Code. For purposes of workers compensation the characterization of the relationship shall be governed by Section 3200, and following, of the Labor Code.

The assignee takes over all rights and interest of the original tenant in a lease agreement. The assignee becomes a tenant, replacing the original tenant.

An impound account (also called an escrow account) is simply an account maintained by the mortgage company to collect insurance and tax payments that are necessary for a borrower to keep a home, but are not technically part of the mortgage. An impound account benefits both the trustor (borrower) and the beneficiary (lender). By impounding taxes and insurance, the lender is certain that these debts will be paid. The borrower is also certain that the payments will be made. Practice Tip: The Principal, Interest, Taxes and Insurance (PITI) of a loan include the amounts escrowed by the lender for Taxes and Insurance, insuring that these obligations are paid.

The Structural Pest Control Board in Sacramento retains information on pest control reports for up to two years. This information may be secured by anyone who requests it and pays a fee. Contact Info: Structural Pest Control Board 2005 Evergreen Street, Ste. 1500 Sacramento, CA 95815 (916) 561-8704: Fax (916) 561-8708 (916) 561-8700 (916) 561-8750 (916) 263-2469 Practice Tip: This is a classic third party situation. Never try to interpret the results of these reports; leave it to the pros. Also, if you are unsure how to proceed when supplying this information to a client, consult your Broker first.

Identifying licensed activities has become difficult for many brokers as brokerage practices have changed and evolved in response to new laws, the need for new efficiencies in response to consumer demands, and new technology. The following are guidelines, and nothing more, of defined activities which generally do not come within the term “real estate broker,” when performed with the broker’s knowledge and consent. Broker knowledge and consent is a prerequisite to the performance of these unlicensed activities, since without these elements there can be no reasonable assurance that the activities performed will be limited as set forth below. Cold Contacting of Potential Prospects Unlicensed assistants may assist in the performance of cold contacting potential prospects. Cold contacting of potential prospects is the making of telephone calls or the use of electronic or social media to canvass for interest in using the services of a real estate broker. Should the person responding indicate an interest in using the services of a broker, or if there is an interest in ascertaining the kind of services a broker can provide, the person answering with interest shall be referred to a licensee, or an appointment may be scheduled to enable him or her to meet with a broker or an associate licensee** (licensee***). At no time may an unlicensed assistant attempt to induce the person being called to use a broker’s services. The canvassing may only be used to develop general information about the interest of the person answering and may not be used, designed or structured for solicitation purposes with respect to a specific property, transaction or product. (The term “solicitation” as used herein should be given its broadest interpretation.) Open Houses With the principal’s consent, unlicensed assistants may assist licensees at an open house intended for the public by placing signs, greeting the public, providing factual information from or handing out preprinted materials prepared by or reviewed and approved for use by the licensee, or arranging appointments with the licensee. During the holding of an open house, only a licensee may show or exhibit the property, discuss terms and conditions of a possible sale, discuss other features of the property, such as its location, neighborhood or schools, or engage in any other conduct which is used, designed or structured for solicitation purposes with respect to the property. Comparative Market Analysis Unlicensed assistants may make, conduct or prepare a comparative market analysis subject to the approval of, and for use by, the licensee. Communicating With the Public Unlicensed assistants may provide factual information to others from writings prepared by the licensee. A non-licensee may not communicate with the public in a manner which is used, designed or structured for solicitation purposes with respect to a specific property, transaction or product. Arranging Appointments Unlicensed assistants can make or schedule appointments for licensees to meet with a principal or party to the transaction. As directed by the licensee to whom the broker has delegated such authority, an unlicensed assistant can arrange for and order reports and services from a third party in connection with the transaction, or for the provision of services in connection with the transaction, such as a pest control inspection and report, a roof inspection and report, a title inspection and/or a preliminary report, an appraisal and report, a credit check and report, or repair or other work to be performed to the property as a part of the sale. Access to Property With the principal’s consent, unlicensed assistants can be present to let into the property a person who is either to inspect a portion or all of the property for the purpose of preparing a report, or who is to perform repair work or other work to the property in connection with the transaction. Information about the real property which is needed by the person making the inspection -- for the purpose of completing his or her report -- must be provided by the broker or associate licensee, unless it comes from a data sheet prepared by the broker, associate licensee or principal, and that fact is made clear to the person requesting the information. Advertising Unlicensed assistants can prepare and design advertising relating to the transaction for which the broker was employed, if the advertising is reviewed and approved by the broker or associate licensee prior to its publication. Preparation of Documents Unlicensed assistants can prepare and complete documents and instruments under the supervision and direction of the licensee if the final documents or instruments will be or have been reviewed or approved by the licensee prior to the documents or instruments being presented, given or delivered to a principal or party to the transaction. Delivery & Signing Documents Unlicensed assistants may mail, deliver, pick up, or arrange the mailing, delivery, or picking up of documents or instruments related to the transaction, including obtaining signatures to the documents or instruments from principals, parties or service providers in connection with the transaction. Such activity shall not include a discussion of the content, relevance, importance or significance of the document, or instrument or any portion thereof, with a principal or party to the transaction. Trust Funds Unlicensed assistants can accept, account for, and or provide a receipt for trust funds received from a principal or a party to the transaction. Communicating with Principals, etc. Unlicensed assistants can communicate with a principal, party or service provider in connection with a transaction about when reports or other information needed concerning any aspect of the transaction will be delivered, or when certain services will be performed or completed, or if the services have been completed. Document Review Unlicensed assistants can also review, as instructed by the responsible/supervising licensee, transaction documentation for completeness or compliance, providing the final determination as to completeness or compliance is made by the broker or associate licensee. Moreover, unlicensed assistants may review transaction documentation for the purpose of making recommendations to the broker on a course of action with respect to the transaction. Practice Tip: REMEMBER Section 10131 of the California Code outlines the duties for which a real estate license is required. It reads in part: License Required 10130. 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.

Subsurface right refers to a landowner's right over minerals and other substances found below a property. A person acquires a subsurface right through purchase from a landowner. The assessment of subsurface rights for tax purposes is made on the production of oil and gas from the subsurface. Implied Easements. The classic implied easement arises when the parties to a conveyance create an isolated property interest, such as a mineral interest, and the conveyance document is silent regarding access to the interest. The Restatement collects the basic rules regarding the most common implied easement of interest to the oil and gas developer: the easement by necessity. Under the Restatement...the creation of a servitude burden may be implied by the circumstances surrounding the conveyance of another interest in land . A conveyance that would otherwise deprive the land conveyed to the grantee, or retained by the grantor, of rights necessary to reasonable enjoyment of the land implies the creation of a servitude granting or reserving such rights. The purpose of the easement by necessity, in the oil and gas context, is to permit use of the burdened land for the efficient development of the oil and gas estate.

10015.1. “Responsible broker” means the real estate broker responsible for the exercise of control and supervision of real estate salespersons under Section 10159.2, or a licensee subject to discipline under subdivision (h) of Section 10177 for failure to supervise activity requiring a real estate license. The supervision of a salesperson required under this part or any other law is limited to regulatory compliance and consumer protection. If there is any form of misinformation or misrepresentation by a salesperson to a potential buyer, both the salesperson and the broker may be liable for damages. Practice Tip: As a new licensee, questions will arise in the course of your business. Always remember that your Broker is responsible for your actions and acrues liability for your words and deeds. If you are unsure of how to proceed in any situation, ALWAYS contact your Broker for guidance before proceeding. Acting without full knowledge can jeopardize your license, professional reputation, and your Brokers as well.

Under Article 7 (loans) with reference to junior trust deed that is under $20,000, the maximum commission that a broker can earn if the payment of the debt is in three years or more is 15% .

The trustor is the borrower under a deed of trust and is the one who signs the note and the deed of trust itself . In real estate in the United States, a deed of trust or trust deed is a deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender.

The Unruh Civil Rights Act is a piece of California legislation that specifically outlaws discrimination based on sex, race, color, religion, ancestry, national origin, age, disability, medical condition, genetic information, marital status, or sexual orientation. The Act reads: "All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever."

The Unruh Act makes it illegal for business establishments to intentionally and arbitrarily discriminate against customers based on any personal characteristic, including sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation. The Unruh Act provides that all people are entitled to full and equal accommodations, advantages, facilities, privileges, or services in all business establishments, regardless of whether they are public or private. People need not demand equal treatment in order to later sue under the Unruh Act. Previous violators of the Unruh Act include: ● Bars that give women special discounts on ladies’ nights; ● Restaurants that have differential dress codes for each gender; and ● Organizations that only allow whites to join The Unruh Act applies to all business establishments. These include, but are not limited to, the following: ● Hotels, motels, and housing accommodations; ● Hair stylists; ● Non-profits and for-profits; ● Restaurants and bars; ● Theaters; ● Professional organizations and golf clubs; ● Hospitals; and ● Retail establishments. A small number of social organizations, such as the Boy Scouts, are not business establishments and therefore are exempt from the Unruh Act. Some businesses are explicitly allowed to discriminate under other laws, like insurers setting rates; the Unruh Act generally will not prevent such discrimination. If an individual believes that a business has violated the Unruh Act, he or she may file a complaint with the California Department of Fair Employment and Housing (DFEH). This complaint generally must be filed within one year of the alleged discrimination. However, if the alleged violation is in relation to hate violence, the victim has one year from the day he or she becomes aware of the perpetrator’s identity, but not more than three years from the date of the injury to file the complaint. Alternatively, a victim can also file a lawsuit against the business. It is not necessary to file a complaint with DFEH in order to pursue a lawsuit. The potential remedies for violations of the Unruh Act include: ● Special and general damages; ● Injunctive relief; and/or ● Attorney’s fees. Importantly, court-ordered damages may include a maximum of three times the amount of the actual damages, known as treble damages. The amount of damage awarded per violation is statutorily set at a minimum of $4,000. The statute of limitations for Unruh Act lawsuits against private actors is two years, meaning an Unruh Act claim must be made within two years of the alleged discrimination. If the suit is against a government entity primarily for money damages, the suit is subject to the California Government Tort Claims Act and faces accelerated timelines and special procedural requirements. Finally, the Unruh Act does not prevent businesses from performing non-arbitrary discrimination. Businesses may thus place deportment restrictions on customers that are rationally related to the business, and may otherwise discriminate where there is a compelling social interest. For example, a business can request a customer to leave when that customer causes damage to property, injury to other people, or otherwise disrupts the operation of the business. Special favorable prices for the elderly and children are also often permitted.

The Rumford Act, also called the California Fair Housing Act, empowers this commission to take action for discrimination violations.

In a tight money market, the cost of existing available dollars would increase. Therefore, buyers would be expected to pay more points for securing a loan.

A complete escrow is one wherein all documents have been properly drawn and are prepared for final signature, allowing that escrow to close.

The escrow agent is truly an independent agent for each of the parties to the escrow and can act neither as an advocate nor as a counselor.

Most life insurance company loans are made through a loan correspondent that could be defined as a mortgage banker or mortgage broker.

For the homestead exemption on a property to be effective, the recording must occur before an ultimate judgment is recorded. Notice the difference between recorded and rendered. Recording occurs after a judgement is rendered. When a homestead declaration is (1) signed by a homeowner, (2) notarized, and (3) "recorded," it helps to protect the home against loss to creditors. "Recorded" means that the original signed and notarized homestead declaration is filed in the clerk's or recorder's office for the county in which the home is located. A properly prepared and recorded homestead declaration immunizes the home (and the land on which it is situated) from many (but not all) legal enforcement measures. For example, if a homeowner files a petition in bankruptcy, it may be possible, because of a homestead declaration, to retain the home, or at least a portion of the equity in the property, instead of losing it to creditors.

Jacob becomes a one-third tenant in common with Louis and Tom, who remains as joint tenants.

The National Association of REALTORS encourages settlement of disputes between the parties by mediation or arbitration whenever that can be arranged. Traditionally, real estate industry disputes rely on negotiation for solutions. If negotiation fails, litigation is often initiated. Mediation involves the skillful intervention of a third-party professional to help resolve disputes that arise between two or more parties. Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts. The parties to a dispute refer it to one or more persons (the "arbitrators", "arbiters," or "arbitral tribunal"), whose decision (the "award") they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.

The Liquidated Damages clause in a real estate contract is a reasonable and agreed upon amount that would be awarded to the seller, should the buyer breach the contract. Liquidated damages typically do not exceed 3% of the purchase price. It also protects the buyer by limiting the damages to a 'reasonable' amount. Liquidated damage agreements have been disliked by the courts. However, they are often allowed if the amount discussed is not unusually high and it might perhaps be difficult to fix actual damages suffered by the insured party.

The promissory note is merely evidence of the debt and must be secured by another device commonly called the trust deed. Hence, a trust deed is a security device.

A lessee has possessory interest in real property and is able to grant an easement but only for the term of the lease. At the end of the 8 year lease, the easement would need to be granted again, to be enforceable.

The husband's salary, as well as the wife's salary, is considered community property. Community property states follow the rule that all assets acquired during the marriage are considered community property.

A deed to an assumed name, sometimes called a fictitious name, is permissible, such as a deed to property bought by a person in the name of a business.

California residential licensed appraisers may appraise any non-complex one-to-four unit residential property with a transaction value up to $1 million, and non-residential property with a transaction value up to $250,000. Commercial property valued in excess of $250,000 requires that an appraiser be licensed as a certified general appraiser.

The fundamental principles of contract formation may be raised in defense of a breach of contract action on a real property agreement. Some of these are: facts showing a lack of acceptance of the contract [Civ. Code §§1565–1567]; fraud, undue influence, duress [Civ. Code §§1569, 1571–1575, 1689(b)(1)]; mutual mistake of fact [Civ. Code §1689(b)(1)]; lack of consideration [Civ. Code §3391]; failure of a condition [Civ. Code §1434]; contract is void because the object is either impossible [Civ. Code §§1597–1598], unlawful [Civ. Code §1598], or "so vaguely expressed as to be wholly unascertainable" or uncertain [Civ. Code §1598]. Statute Of Frauds Statute of limitations to bring the action may be 2 years or 4 years depending on the specific facts of the case. The fact set of a specific claim should be reviewed by a California attorney to ascertain the Statute of Limitations for the claim. The best strategy, when this situation arises, is to consult an attorney as soon as reasonably possible.

Choice "d" is a proper definition for the exclusive authorization and right-to-sell listing

Simple interest is the form of interest customarily charged on real estate loans.

FICO scores of 620 and above can usually generate good loans (there are exceptions)

A commercial acre is defined as the remainder of an acre after the land as been subdivided to include areas devoted to streets, sidewalks, curbs, and alleys, and so on

A condominium purchase is the only transaction in which the buyer receives a fee simple interest and an in-common interest at the same time

The time period in which to file a complaint for violation under the federal fair housing law is 180 days

None of the choices are required for minimum building standard requirements by the FHA

Two handrails are not required for minimum building standard requirements by the FHA

When one expires leaving a will without heirs, the property transfers according to the provisions of the will and possibly to the interests of potentially existing devisees, subject to the proper administration of that will

The beneficiary is the lender

The preferred method for the appraisal of a shopping center would be the replacement cost approach and the capitalization of net income approach

A hold in due course is a third party who buys up an existing note. The maker is the borrower. The borrower may refuse payment on the note if there is material alteration on the face of the note.

An estate of inheritance is another form of fee simple. A main characteristic of this interest is that the estate is of indefinite duration

Under an exclusive-agency listing, the seller reserves the right to sell the property on his own and not pay anyone a commission

Under an exclusive-agency listing, the seller reserves the right to sell the property on his own and not pay anyone a commission

Depreciation is a term with two applications. For accounting purposes, deprecation is taken off the book value. For appraisal purposes, deprecation is taken off the actual replacement value of a new commodity

If deed restrictions and zoning conflict, the more rigid of the two will prevail. In this example, zoning is more rigid.

The escrow company writes to the lender requesting a beneficiary statement. That settlement will indicate the condition of the loan, the balance due, rate of interest due to date, and so on.

Trade fixtures are items that can be removed on termination of the tenancy if the contract provides for that, as long as the tenant makes any repairs to the premises necessitated by the removal of such trade fixtures. Choices a and c are examples of trade fixtures

A attachment is legal seizure of the title to property by a court. It is a prejudgment activity, typing up that property until a hearing date is set

Unpaid taxes will be classified as general liens

Building codes, deed restrictions, and zoning regulations are all examples of public and private restrictions that may limit the use of real property

When recorded, an abstract of judgment becomes a lien on any property owned by the judgment debtor in the county where the abstract is recorded

Both the seller and the broker are obligated to disclose any material facts to a prospective buyer concerning the property in question, unless prohibited by law

Every potential buyer of land within a land project is entitled to a copy of the public report

A township is a six-mile square, containing 36 square miles, within a 24 mile perimeter

Usually, a broker is obligated to submit all offers on a listing, unless the owner has expressly instructed the broker not to do so.

The requirement of the meeting of the minds is a requirement for a contract, and a standard listing agreement is an example of a contract

The floor plan and the equipment help define functional utility

Intangible personal property is not subject to taxation

Prepaid rent is considered a charge, or debit, to the seller

Choices a, b, and c are all of concern to the home buyer

The statute of frauds says certain items, including real estate transactions, must be in writing to be enforceable

An unlawful detainer action is the legal action an owner may take to remedy a default in rental payment

The easement is an easement appurtenant, meaning it will run with the land and be transferred to the buyer of the dominant tenement interest.

Unlike some other states, California offers a homestead exemption to everyone who owns a home and lives in it. Your home need not be a single-family dwelling. If you live in a condo, motor home or on a boat that you own, you qualify for the exemption. If you are single, you have homestead protection up to $75,000 of equity. A head of household receives a $100,000 equity exemption. If you are over 65, physically disabled or have less than $15,000 annual income, your equity is protected up to $175,000. A qualifying dwelling can be any place you own as your principal place of residence and that is subject to property tax. Examples include, but are not limited to: Single family residence Duplex or half-plex Condominium or planned unit development (PUD) Unit of any multi-unit property Mobilehome Houseboat or floating home that is subject to property tax A living unit in a commercial or industrial property A motor home or other temporary structure used as a principal residence on otherwise vacant property owned by the claimant.

An independent contractor is one who, in rendering services, exercises an independent employment or occupation and is responsible to the principal only for the results of his or her work. An important factor in establishing independent contractor status is that the contractor determines the method of accomplishing the work for which the contractor has been engaged. Salespersons and broker associates are usually characterized as independent contractors of the broker for purposes of state and federal income tax reporting and for certain other purposes such as Workers' Compensation Insurance coverage. (Unemployment Insurance Code § 650 and 26 USC § 3508). Accordingly, salespersons and broker associates are agents and employees of the supervising broker in connection with dealings with the public but may, at the same time, be independent contractors for income tax reporting and certain other labor related purposes. To maintain independent contractor status for income tax reporting and related labor law purposes, it is necessary for the supervising broker to specify in contracts with salespersons and broker associates that the associates are independent contractors and not employees for income tax reporting purposes. However, the real estate broker should not be confused by the implementation of independent contractor status for tax reporting, Workman's Compensation, or other labor related purposes. The independent contractor relationship with salespersons and broker associates does not in any way diminish the broker's responsibilities and liabilities for the conduct of the broker's salespersons and broker associates who are acting as agents and employees for other purposes.