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New California Law Mandates Broker Supervision Course

Written by on Monday, 31 August 2015 2:07 pm
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Recently, the California Bureau of Real Estate (BRE) issued the following advisory:

"In July 2015, the California Legislature passed and the Governor signed Assembly Bill 345 .(‘AB 345'), Frazier, amending Section 10170.5 of the California Business and Professions Code (‘the Code'). The provisions of this Code section take effect on January 1, 2016. The essence of this amendment requires that broker licensees complete upon their first renewal as a broker, a three-hour continuing education course in the management of real estate offices and supervision of real estate activities (Management and Supervision). Moreover, salesperson and broker licensees must complete an eight-hour continuing education survey course for subsequent renewals that includes topics in ethics, agency, trust fund handling, fair housing, risk management and management and supervision."

This has an effect on licensees, to be sure; but hardly a momentous one. "Ok, there will be some new and different courses required as part of the 45-hour continuing education requirement. Something more to keep track of, but hardly a big deal."

It is, however, a big deal for the providers of continuing education. If they want to be able to provide a full complement of required courses, they will need to have their Management and Supervision course written, approved by the BRE, and ready for delivery by January of 2016. They will also need to have made, and had approved, the mandated modifications to the eight-hour survey course. (Of course they can have courses approved and ready later than January; but who will want to have a "coming soon" sign out when the competition is ready to deliver?)

The Bureau's requirements for the content of the 3-hour course are specific and daunting. Guidelines have been published "to assist sponsors in preparing a Management and Supervision course…" The following list is taken from those guidelines. It is a list of topics that must be included in the course. [I have omitted Code references and I have numbered the topics for ease of reference.]

  1. How to establish policies, rules, and procedures including systems to review, inspect, and manage offices.
  2. Supervision of all transactions involving a real estate license.
  3. Retaining and reviewing documents which may have a material effect upon the rights or obligations of a party in a transaction.
  4. The proper filing, storage and maintenance of documents.
  5. Proper handling of trust funds.
  6. Advertising of any service for which a license is required.
  7. Familiarizing salespersons with the requirements of federal and state laws relating to the prohibition of discrimination.
  8. Regular and consistent reports of licensed activities of salespersons.
  9. The role and responsibilities of branch or division managers, including salespersons acting as branch or division managers.
  10. The responsibilities of a broker to ensure salespersons working as "teams" are in compliance with [recent Code amendments].
  11. Supervision over restricted licensees.

All of the topics listed are taken from existing Commissioner's Regulations and the Business and Professions Code. Still, some may come as a surprise (such as #8) and some may cover ground that will be new to many (e.g. #10).

The suggested guidelines also contain this piece of advice: "Coverage of appropriate court decisions and practical examples and/or case studies as related to the management and supervision of licensed agents are recommended, including decisions adopted by the real estate Commissioner involving violations of B&P [Business and Professions Code] 10177(h), failure to supervise."

The guidelines note that "Instruction time, including exam time, must total a minimum of 150 minutes (three classroom hours)." [my emphasis] Suppose the exam takes 20 minutes. That leaves 130 minutes to cover the 11 topics listed above. That equates to just under 12 minutes per topic. One thing we can already know about the newly-mandated course: the instructors will have to talk fast....

Bob Hunt is a director of the California Association of Realtors®. He is the author of Real Estate the Ethical Way.

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  About the author, Bob Hunt

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