Assembly Bill 2018 (Bocanegra) is quickly working its way through the California legislature in Sacramento. The bill deals with the use of team names and fictitious business names in the real estate business. The bill is the result of collaborative work by the California Association of REALTORS® (CAR) and the California Bureau of Real Estate (CalBRE). It has no known opposition. The bill passed out of the Assembly in May and is moving through Senate committees. Its passage is extremely likely. Real estate professionals should pay attention to provisions of the bill.
Some will remember that a little more than a year ago, the California BRE advised the real estate community of new guidelines it was adopting regarding team names.This was occasioned by the Bureau's concern that the increased use of team names made it difficult for consumers to identify who were the actual responsible parties of real estate activity conducted by agents affiliated with a team.
The initial guidelines published by CalBRE were fairly clear, but complying with them posed a variety of difficulties. One problem was that they required that all team names be registered as fictitious business names (more commonly known as DBAs -- for "doing business as") of the broker, not the agent(s). Thus, if I had a team name ("The Bob Hunt Team") that became a DBA of the brokerage.Of course, this, too, was somewhat misleading. Because of this and other problems, CAR created a task force to work with the BRE on creating a policy that would be mutually satisfactory and that could be put into legislation (as an amendment to the Business and Professions Code). Hence AB 2018.
The bill recognizes two kinds of names in addition to the use of a person's actual name: team names and fictitious business names. The following descriptions are taken from the actual language of the bill. Any emphasis is added by me.
"Team name" means a professional identity or brand name used by a salesperson or broker associate. A team name does not constitute a fictitious business name if all of the following apply:
- The name is used by two or more real estate licensees.
- The name includes a licensee's surname in conjunction with the term "associates," "group," or "team."
- The name does not include terms that imply the existence of a real estate entity independent of a supervising broker.
- Advertising that contains a team name, including print or electronic media and "for sale" signage, shall include the licensee's name and license number.
- The supervising broker's identity shall be displayed as prominently as the team name in all advertising.
- The advertising material shall not contain terms that imply the existence of a real estate entity independent of the supervising broker.
As for fictitious business names, "A supervising broker may, by contract, permit a salesperson to do all of the following:
- File an application with a county clerk to obtain a fictitious business name.
- Deliver to the bureau an application, signed by the supervising broker, requesting the bureau's approval to use a county approved fictitious business name that shall be identified with the broker's license number.
- Pay for any fees associated with filing an application with a county of the bureau to obtain or use a fictitious business name.
- Maintain ownership of a fictitious business name, as defined…, that may be used subject to the control of a supervising broker.
Marketing materials, including print or electronic media and "for sale" signage, using a fictitious business name obtained in accordance with [the above] shall include the supervising broker's identity in a manner equally as prominent as the fictitious business name.
Advertising, including print or electronic media and "for sale" signage, containing a fictitious business name obtained in accordance with [the above] shall include the salesperson's name and license number.
There still may be some "tweaking" to do with AB 2018 -- I know I can think of a few things -- but no one should expect any substantial changes. One thing in particular seems particularly unlikely to be changed. That is the requirement -- for both kinds of names -- regarding the inclusion of the broker's identity in all marketing materials and "for sale" signage. In both cases, this is to be "equally as prominent" as either the fictitious business name or the team name.
It's hard to see how this can be interpreted any other way than to mean that, on for sale signs and marketing material, the broker's name will need to be no smaller in font size than the team or fictitious business name. This represents a major departure from current practices where one is likely to see a Team Name this Big and a Broker Name this Big on the same sign.
AB 2018 is not emergency legislation and shouldn't be expected to take effect immediately. It probably won't become effective until next year, maybe not even until June. So why should real estate professionals be paying attention now? Well, if you're going to buy signs this year, you will probably expect them to last at least a couple of years. It makes sense to give some thought to creating signs now that will be compliant in the years to come.