As we glide into 2019, it’s time to dive into another Department of Real Estate (DRE) Real Estate Bulletin and see what they have on their plate this year.
Beware of wire fraud!
The opening of the first bulletin of the year rehashes a recent alert about the danger of fraudulent electronic funds transfers related to real estate transactions.
The DRE recommends several strategies to avoid or mitigate the effects of wire transfer fraud:
- use non-electronic alternatives like cashier’s checks during the course of a transaction;
- obtain a receipt for the transaction;
- obtain contact information and account numbers from all parties at the beginning of the transaction;
- confirm any changes to wiring instructions with a known party to the transaction; and
- avoid sending personal information such as bank account or credit card numbers over text or email.
Should a client of yours fall victim to wire transfer fraud, advise them to file a report with the FBI here.
2018 Legislative Update
- as of January 1, 2020, the DRE may not deny a licensing application based on most criminal convictions more than seven years old or expunged convictions;
- the Real Estate Law has received some procedural tweaks, including amended definitions and removal of out-of-date provisions;
- real estate disclosures have been altered;
- provisions in the California Homeowner Bill of Rights regarding foreclosures and trust deeds have been reinstated;
- residential tenants may now pay rent through a third party;
- as of September 1, 2019, deadlines specified in eviction notices (e.g. three-day notice to pay rent or quit) now describe “court days” rather than calendar days;
- decks and balconies on buildings with three or more multifamily residences need to be inspected before 2025, and every six years thereafter;
- private transfer fee requirements in the title of real estate are prohibited;
- homeowners’ associations (HOAs) may satisfy member outreach requirements for a time-share plan in common interest developments; and
- reverse mortgage holders may not record a notice of default on the death of a borrower until a successor in interest has had the opportunity to assume the mortgage.
Fiduciary duty coming soon
When engaging in “Coming Soon”-style advertising campaigns on behalf of sellers, it is important to consider fiduciary duty of the seller’s agent.
“Coming Soon” advertising, as the DRE defines it, is the practice of generating interest for a property that is not yet for sale. While this method may provide certain benefits for the seller of the property, it can be trouble when the seller’s agent accepts offers before properly marketing the property.
In this scenario, the property might not receive its best offer, putting this practice in direct conflict with the agent’s fiduciary duty.
In particular, dual agents who participate in this practice, according to the DRE, expose themselves “ to the potential for an increased chance of civil liability and regulatory action.”
Dual agency inherently limits the benefits an agent provides to a buyer or a seller by creating further opportunities for conflicts of interest.
In the end, when an agent’s conduct is not in the best interest of their client, they are failing in their fiduciary duty; acting in the best interest of the client, as the DRE bulletin puts it, “will enhance your reputation and result in greater longterm success.”
Digital broker-associate notifications
Both the broker-associate and the responsible broker need to confirm the affiliation through eLicensing before the affiliation actually takes effect.
As an ease-of-access update, this marks an ongoing shift of government agencies, including the DRE, toward embracing digital efficiency. The next step for the DRE, of course, is allowing prospective licensees to apply for their licenses online.
Purchase your publications
While most DRE publications may be downloaded for free from the DRE’s website here, some need to be ordered by mail or fax (unless you are able to pick them up in person). These publications include:
- Reference Book — A Real Estate Guide (Rev. 2010);
- Real Estate Law;
- Disclosures in Real Property Transactions;
- Operating Cost Manual for Homeowners’ Associations;
- Subdivision Public Report Application Guide (SPRAG); and
- Reserve Study Guidelines for Homeowner Association Budgets.
The DRE has included a form to mail order these publications in this bulletin.
Editor’s note — If you’re looking for forms not published by the DRE, RPI forms are free to download in bulk or individually here.
And that brings this edition of our Digest to a close! Until next time.