Why this matters: The DRE’s Real Estate Bulletin informs licensees on rules of conduct, changing legislation and new licensing exams, which we digest to help you keep your practice and conversations current.
It’s that time again! The Spring 2025 edition of the California Department of Real Estate (DRE) Bulletin looks back on the start of this year’s legislative achievements, new licensing exams, best practice reminders and more.
Report unlawful price gouging to the DRE
The DRE deadline for reporting price gouging in areas affected by the recent Palisades Fire was extended to July 1, 2025. Price gouging includes protections for both renters and homeowners.
To combat deeply unfair and predatory activities, reporting offenders to the DRE has become the responsibility of neighbors, the community, and DRE licensees as the gatekeepers for property transactions. Licensees in particular need to call out and report suspected offenses to safeguard the public from those among us who overreach.
When receiving or observing unsolicited offers to buy property below fair market value, anyone can report to LAFires@dre.ca.gov as a community service effort to protect LA property owners.
Whether a tenant is shielded by the 10% cap on rental increases or new protections regardless of lease length, Executive Order N-23-25’s reporting extension for price gouging steps up to protect current and future tenants and owners from opportunistic bad actors.
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Meet and greet new legislation
With the Spring edition of the RE Bulletin, the DRE highlights new legislative action from both the State Senate and State Assembly.
Many of the real estate laws summarized in the bulletin encourage renters to better qualify for ownership using tools like mandated landlord credit-reporting to help improve a tenant’s credit score. Others directly change how licensees acting as property managers deal with fees from tenants and applicants.
To see how these laws take effect in more detail, check out those featured here at firsttuesday’s New Laws. Also, to stay up to date on even more impactful legislation keep an eye on the status of current or recently passed legislation on our Legislative Gossip page.
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Buyer Representation Agreements: The end of the “gold standard”
Get it in writing
The biggest legislative splash and the one closest to home for licensees, especially big broker operations, became effective this year. This enactment sets the standard for brokers and their agents who expect a fee for assisting a buyer to acquire property of any type.
One element of buyer representation is the negotiation by a buyer agent with the buyer-client which sets the broker’s fee they expect for assisting the buyer. Further, who will pay the fee and when it is payable – all are established before undertaking efforts to locate property and submit purchase agreement offers.
A written employment agreement, called a buyer representation agreement, is required to collect and keep a fee for assisting a buyer acquiring ownership of a property. Thus, these buyer representation agreements cement the relationship between buyer-client and agent – and the fee arrangement – to the exclusion of the seller and the seller broker. This bifurcation between the two opposing sides of the consumer involvement in fee setting arrangements in real estate services is a deliberate legislated change to stop past price fixing customs offered via advertisement in MLS publications of the past.
After decades of harmful big broker habits when dealing with the consuming public – buyers – this public policy enactment shields all buyers by laying down a clear path licensees must follow to rebuild public trust in the profession.
The DRE is the agency specifically tasked by the legislature with enforcement. The long arm of DRE’s consumer protection is their authorization to review the status of a license held by a buyer broker or agent who intends to receive (and keep) a fee without first entering into a buyer representation agreement in anticipation of preparing a purchase agreement offer.
Without a consumer advocate with a say at the table – the DRE – offering clear interpretations for the practical application of buyer representation agreements rules, and especially clarity on who needs them and when, licensees risk remaining entrenched in the same improper price fixing habits of the past, namely violations of antitrust laws.
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Sit out of open house broker sittings
An open house remains helpful in these internet days for seller brokers to make personal contact with buyers interested in the property they have available for sale. By extension, the interested buyers at an open house are likely not yet represented by a buyer broker. Meeting with a potential buyer and giving them information on the property is authorized by seller representation agreements, and includes preparing and obtaining a purchase agreement offer directly from the buyer.
Outside of California, some seller brokers allow unaffiliated brokers or agents to handle open house activities for them. These third-party licensees are not operating under a representation agreement with the seller, nor with the prospective buyers attending the open house. They are motivated to sit by access to leads so they can solicit the prospective buyers at the open house and hopefully represent them for a fee agreed to by the buyer for assisting.
But this practice invites a host of conflicts for the seller broker.
Considering just who the licensee sitting the open house is working for or whose malpractice and business insurance covers claims of liability shows the clear conflicts of interest in this arrangement.
When a third-party broker or agent plans to sit at an open house not affiliated with their own brokerage the question arises about the seller broker’s management of their client’s best interest. The DRE cautions licensees who permit third-party licensees to handle their open house responsibility, though the DRE clarifies the third-party broker activity is not against Real Estate Law.
All brokers and agents understand they need to honor their fiduciary duties owed to the seller to keep detailed records showing they exercised due diligence in their representation of the seller.
For a more complete list of potential hazards, read the full consideration in the Real Estate Bulletin for Spring 2025.
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Taking the temperature from mercury
The Mercury Thermostat Collection Act of 2021 empowered a qualified drop off servicer to collect and dispose of mercury thermostats. The free program ThermostatCare provides an incentive – a $30 mail-in rebate – when you drop off a mercury thermostat at a ThermostatCare location.
Items containing mercury left near people, like a residence or office, need to be removed to keep everyone involved safe and reduce energy costs.
But first check whether your thermostat puts you or others at risk. You are in the clear when your thermostat:
- has any type of digital screen; or
- was manufactured in 2006 or later.
Removing the cover to see small glass ampules will confirm it is a mercury thermostat, but this makes it more fragile. Instead, bring the thermostat to a ThermostatCare drop-off site as they provide confirmation in a controlled environment.
When it’s time to remove the old thermostat from the wall:
- locate your nearest drop-off site;
- wear protective gloves; and
- place it in a sealed clear bag.
At the drop-off site you will be asked to fill out a form to send with the thermostat. The $30 rebate will be mailed within one year.
Advocate for those you know to check their thermostats and make their homes safer.
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Eco-friendly homes taking over California real estate market
Pencils down, new DRE exam is finished
A new state exam for initial licensing has arrived! The DRE has debuted a revitalized exam, curtesy of the Exam Validation and Development Process (EVDP) staff, test providers PSI Service LLC, and real estate experts.
Salespersons and brokers newly entering the real estate profession have already come across these exams after they were finished in March of this year. While a part of a periodic update that occurs every five to seven years, this process was well timed to include the new legislated protection for consumers who acquire an ownership interest in a parcel of real estate.
Thus, the exam covers situations involving mandated buyer representation agreements and eases concerns over the recent leak of exam content.
Creating the new exams began in June 2023. At firsttuesday, our study materials and bank of exam questions in anticipation underwent months of staff rewriting study material to update and conform to all aspects of:
- the new buyer representation agreement legislation;
- the public policy underlying the changes; and
- best practices to assure you collect and keep your fee.
For the latest in study materials check out List It!™ a new California platform game designed to make studying fun at every level.
Looking to earn or renew a California DRE license? Enroll in firsttuesday’s DRE-approved courses to Become an Agent, Become a Broker and Continuing Education Courses at www.firsttuesday.us!
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Brokerage Services Performed in Anticipation of Earning a Fee
