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No More Department of Real Estate in California

Written by on Monday, 04 March 2013 6:00 pm

The days of California's Department of Real Estate (DRE) are numbered. Effective July 1, 2013, it will cease to exist. In name at least. Come July, the Department of Real Estate will become the Bureau of Real Estate; and if you don't think that is a big deal, then you are just not attuned to the ways of government.

The shuffling around of the DRE is just one small move in what has been called "the most comprehensive overhaul of state government in decades." The Government Reorganization Plan (GRP) of Governor Edmund G. (Jerry) Brown, Jr. was formally proposed in March of last year. It was adopted, by lack of legislative objection, in July. The plan, said the Governor, was "another step in my continuing efforts to streamline government, make it more efficient, and reduce unnecessary spending." Under the plan, the number of state agencies will be reduced from twelve to ten. (Fear not, though, that this will result in a massive loss of jobs and reduction in the state workforce. Nothing, in that sense, will have been eliminated. Only the names and the lines of authority have been changed.)

In proposing the GRP, it was noted that "Currently, many unrelated departments - like Caltrans [the Department of Transportation], the Department of Real Estate, and the Department of Financial Institutions - are housed together, while many related programs are scattered throughout different agencies." A fair enough criticism, indeed. One doesn't imagine that, if you were designing the government structures from scratch, you would have created a Business, Transportation, and Housing Agency, under which those three named departments would have been housed.

On the other hand, if you and I were creating the structures of state government, we probably wouldn't have come up with the current reorganization plan either. In it, the Department, oops, the Bureau of Real Estate will now reside in the Business and Consumer Services Agency. It will share that organizational house with, among others, The Medical Board of California, the California State Board of Pharmacy, The Bureau of Barbering and Cosmetology, the Bureau of Electronic and Appliance Repair, Home Furnishings, and Thermal Installation (I'm not kidding), the State Athletic Commission, the Cemetery and Funeral Bureau, the State Board of Guide Dogs for the Blind, and the Acupuncture Board.

"What's the logic in that?" you might ask. According to the GRP, "Entities that regulate or license industries, business activities, or professionals are currently spread throughout state government… Consolidating these entities into a new Business and Consumer Services Agency will improve service, consistency, and efficiency by facilitating shared administrative functions and expertise in areas such as automated systems, investigative practices, and licensing and legal processes."

One can only imagine the savings and efficiencies that will be achieved when the Bureau of Barbering and Cosmetology shares expertise in investigative practices with the Bureau of Guide Dogs for the Blind.

The California Association of Realtors® (CAR) was initially opposed to the GRP, at least insofar as it affected the Department of Real Estate. There was concern that DRE would 1) lose its regulatory, enforcement, and legal staff; 2) forfeit its operating reserves to the General Fund; and 3) lose some measure of its influence in government. CAR removed its opposition after receiving assurances that 1 and 2 would not happen, and that DRE's influence would be retained as evidenced by the fact that its head would still have the title of "Commissioner" as opposed to being a Bureau Chief.

As noted before, you have to be sensitive to the ways of government to be reassured by such things.

Recently, CAR has sponsored legislation (AB 424 - Daly) to make it clear in the law that the Bureau of Real Estate will retain the regulatory and enforcement powers, along with legal staff, which was had by the DRE. It remains to be seen what will actually happen with the operating reserves that were held by the DRE.

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  About the author, Bob Hunt

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.