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For a total list of all the real estate laws digested by first tuesday for the 2009-2010 legislative session, click here.

Topics:

  1. Transfer Disclosure Statement revisions regarding smoke detectors, water heaters and carbon monoxide devices
  2. Updated Department of Real Estate continuing education changes

Reported by Heather McCartney

The rules reported here outline new revisions to the transfer disclosure statement (TDS) form regarding residential building safety.

TDS revisions regarding smoke detectors, water heaters and carbon monoxide devices

Civil Code §1102.6
Amended by S.B. 183
Effective: January 1, 2011

Carbon monoxide devices have been added to the list of items mandated to be disclosed, if present on the property, by a seller in Section A of the California Real Estate Transfer Disclosure Statement (TDS) and the Manufactured Home and Mobilehome TDS (Section A). [See first tuesday Form 304]

The TDS now also discloses:

  • the existence of carbon monoxide devices on a property is not presently mandated as a precondition of the property’s sale or transfer (as are smoke detectors and water heater bracing); and
  • any carbon monoxide devices present on the property might not be in compliance with the law.

The smoke detector no longer appears in Section A. Instead, TDS forms now include a statement requiring the seller to certify the property has or will have an operable, compliant smoke detector on the property on or before the close of escrow on the sale of the property.

The water heater status of being properly braced, anchored, or strapped also no longer appears in Section A. TDS forms now include a statement requiring the seller to certify the property has or will have any water heater present on the property braced, anchored, or strapped on or before the close of escrow on the sale of the property.

The Carbon Monoxide Poisoning Prevention Act definitions

Civil Code § 13262
Amended by S.B. 183
Effective: January 1, 2011

A carbon monoxide device is a device with a distinct audible alarm that notifies occupants when it detects increased levels of carbon monoxide in the air.

The carbon monoxide device may be:

  • battery-operated;
  • powered by an electrical outlet with battery backup; or
  • powered by an alternating current power line of the home.

If the carbon monoxide device is connected to a smoke detector, the combined device must:

  • meet all the standards and requirements that apply to both devices; and
  • emit an alarm or voice warning that clearly distinguishes between the carbon monoxide warning and the smoke detector warning.

A dwelling includes:

  • single family residences (SFRs);
  • duplexes;
  • dormitories;
  • hotels and motels;
  • condominiums;
  • apartments; and
  • multi-unit dwellings.

A fossil fuel is a product that emits carbon monoxide as a byproduct of combustion, such as:

  • coal;
  • kerosene;
  • oil;
  • wood;
  • fuel gases, including those burned by household gas appliances such as
    • furnaces;
    • water heaters;
    • ranges; and
    • ovens; or
    • other petroleum or hydrocarbon products.

The State Fire Marshal must certify all carbon monoxide devices

Civil Code § 13263
Amended by S.B. 183
Effective: January 1, 2011

Carbon monoxide devices must be certified by the State Fire Marshal before being sold in California. The State Fire Marshal will develop this certification process and criteria.

Noncompliance with Carbon Monoxide Poisoning Prevention Act

Civil Code § 17926
Amended by S.B. 183
Effective: July 1, 2011

An approved carbon monoxide device must be installed in a residential building where a fossil fuel-burning appliance is operating:

  • on or before July 1, 2011 for all existing single family residences (SFRs); and
  • on or before January 1, 2013 for all other residential units.

The number and placement of carbon monoxide devices within a residential building will be based on the manufacturer’s instructions or the building standards for the relevant type of occupancy. Failure to comply will result in a maximum fine of $200 per offense.

A property owner will be given a 30-day notice to correct a violation of the Carbon Monoxide Poisoning Prevention Act. The owner will be subject to a fine of $100 for failure to correct the violation after the notice.

Failure to comply with the Carbon Monoxide Poisoning Prevention Act will not invalidate any sale or transfer of property.

Landlord/tenant compliance with the Carbon Monoxide Poisoning Prevention Act

Civil Code § 17926.1
Amended by S.B. 183

Effective: January 1, 2011

The owner of a residential rental property must install, test, maintain and repair all carbon monoxide devices in all the rental units, and may enter the premises to do so.

Carbon monoxide device must be operational at the time a tenant takes possession. A tenant must notify the landlord if the carbon monoxide device within his unit becomes inoperable, and the landlord must repair any inoperable carbon monoxide devices.

Six-month suspension of Carbon Monoxide Poisoning Prevention Act

Civil Code § 17926.2
Amended by S.B. 183

Effective: January 1, 2011

If the Department of Housing and Community Development determines there are insufficient numbers of tested and approved carbon monoxide devices available to property owners, then the department may suspend enforcement of the requirements of the Carbon Monoxide Poisoning Prevention Act for up to six months and notify the public by posting its decision on its website.

An owner who has already installed a device due to the Carbon Monoxide Poisoning Prevention Act will not be required to install a new device on an update in building standards relating to the devices until he makes an application for other alterations, repairs or additions to his property costing more than $1,000.

Originally reported by Bradley Markano, updated by Giang Hoang-Burdette

These new regulations from the Department of Real Estate (DRE) affect every California real estate broker and agent, and all educators who provide approved CE courses for broker and agent license renewal. The regulations set out requirements which fundamentally change the process of completing the CE education necessary to renew a DRE licensee.  Revisions to the original proposed changes are shown in blue.

CE Restrictions for brokers and agents

DRE Regulations §3006
Effective: January 1, 2011

Every broker and agent licensed after October 1, 2007 is required to complete 45 hours of continuing education (CE) every four years in order to renew their license. The sales agent fifteen-hour exception for first-time renewal will no longer exist after September 30, 2011.

To ensure that all CE courses, including live CE presentations, are in fact equivalent to 45 hours of actual study time, all CE courses must :

  • include 50 minutes of instruction per hour of CE Credit;
  • for live courses, require students to be physically present for at least 90% of the time the course is administered (40 hours, 30 minutes, for a 45 hour course), exclusive of the time set for the final exam;
  • provide a course outline, with a minimum three pages per credit hour (135 pages for a 45 hour course), each page to have a minimum average of 200 words;
  • comply with the Americans with Disabilities Act (ADA);
  • have a written statement signed under penalty of perjury by students who take the final exam online, affirming that the person who completes the course is the student; and
  • monitor access to “online-only” course reading materials to ensure that the course is not completed in fewer hours than the approved number of credit hours (hence, a student in an “online-only” 45 hour CE course will be required to spend a full 45 hours studying online before accessing the final exam to complete the course).

All CE providers, regardless of whether they offer live or correspondence courses, must:

  • maintain their legal entities in good standing with California’s Secretary of State;
  • provide the following statement to students before beginning a course: “This course is approved for CE credit by the California Department of Real Estate. However, this approval does not constitute an endorsement of the views or opinions which are expressed by the course sponsor, instructors, authors or lecturers.”;
  • quiz students periodically throughout the course of study to evaluate the student’s comprehension and provide feedback on these evaluations to the student;
  • require the course be completed within one year of registration; and
  • refrain from all advertising during the course of study.

CE course submissions subject to minimum DRE requirements for approval

DRE Regulations §3007
Effective: January 1, 2011

An educator’s application for DRE approval of a CE course must be made on the “C.E. Offering Approval Application” (DRE Form RE 315) and include:

  • for corporations:
    • a current Certificate of Status as a Domestic Corporation, executed by the California Secretary of State in the preceding 30 days; or
    • a current Certificate of Qualification or Certificate of Good Standing as a Foreign Corporation, executed by the California Secretary of State in the preceding 30 days.
  • for companies or partnerships:
    • a Certificate of Qualification;
    • a Certificate of Registration; or
    • a Certificate of Good Standing.
  • for those operating under a DBA:
    • a Fictitious Business Name Statement filed with the county recorder in their local county (or in Sacramento if the provider’s base of operations is outside of California).
  • CE Instructor Certification for all live course instructors;
  • a copyright authorization from the copyright holder, stating that the CE course materials may be used by the applicant;
  • if the provider is not a California resident, a consent to Service of Process form (DRE Form RE 304);
  • copies of all instructional materials, including books, cds, dvds, etc.;
  • if CDs will be used:
    • the CDs;
    • a table of contents for each CD; and
    • if the CD contains a textbook, a copy of the text cover, publication page and table of contents of the textbook.
  • if DVDs are used in the course, a course outline must be included, subdivided to clarify the amount of time for each topic on every DVD;
  • a general information page given to all students prior to enrolling in the course. This page must include all requirements and policies affecting enrollment in and completion of the course;
  • for live lectures:
    • a “C.E. Instructor Certification” (DRE Form RE 335); and
    • a course outline detailing topics covered, and the amount of time allocated to each subject;
  • detailed statements of the following:
    • methods used to regulate online exams;
    • control and timing of student participation in “online-only” course materials;
    • copies of all quizzes, and a statement of how feedback on these quizzes will be provided to students;
    • a copy of the form to be signed by students, confirming that the student is the one taking the final exam;
    • instructions for paper final exams provided to students and their exam monitors; and
    • for paper exams, the form to be signed by the exam monitor affirming that the test procedures complied with DRE regulations.
  • the final exam and answer key. If students are permitted to test more than once, two final exams must be submitted, or a sufficient number of questions must be included in a question bank to constitute two separate exams;
  • a sample certificate of completion, which includes:
    • the name and license number of the student;
    • a statement that the student has attended a live course, or completed all exams satisfactorily;
    • the name of the course;
    • the number of credit hours;
    • the registration date;
    • the completion date;
    • the category of the course;
    • the course’s eight-digit DRE approval number;
    • the course provider’s name, address and telephone number; and
    • the printed name, signature and phone number of the individual who confirms the student’s course completion.
  • for live courses offered in a maximum of two locations no more than twice a year, covering new or changing subjects in real estate, a cover letter must accompany the course. This letter must identify the course as a one-time offering, and include the first date the course will be offered.

Procedure for changing content in approved CE courses

DRE Regulations §3007.2
Effective: January 1, 2011

For a CE course provider to make changes to any course already DRE approved, they must submit the changes to the DRE for approval before implementing them. This does not apply if the changes are exclusively designed to reflect recent changes in law.

Providers of CE courses approved prior to January 1, 2011 must make changes to meet the requirements of this section. Such changes do not need to be submitted to the DRE for review until the course is renewed.

Regulations for final exams

DRE Regulations §3007.3
Effective: January 1, 2011

All CE courses must include a final exam which determines whether the student enrolled has successfully completed his course. Student access to exams will be limited to prevent cheating or improper distribution of the exam.

For packaged CE courses containing 15 to 45 hours, students may not be given access to more than fifteen credit hours-worth of examination within any 24-hour period. Access to sequential fifteen-hour exams may not be granted until the preceding 24-hour period has passed. This does not require successful completion of one exam stage before proceeding to the next, so long as the student is not permitted to complete more than 15 hours of final examination in any 24-hour period.

In a multiple choice, true/false, or fill-in the blank exam, the minimum number of questions is:

  • 5 questions for 1 credit hour;
  • 10 questions for 2 credit hours;
  • 15 questions for 3-5 credit hours;
  • 20 questions for 6-8 credit hours;
  • 25 questions for 9-11 credit hours;
  • 30 questions for 12-14 credit hours;
  • 40 questions for 15-18 credit hours;
  • 50 questions for 19-23 credit hours;
  • 60 questions for 24-27 credit hours;
  • 70 questions for 28-31 credit hours;
  • 80 questions for 32-35 credit hours;
  • 90 questions for 36-39 credit hours; and
  • 100 questions for 40 credit hours and over.

All multiple choice, true/false, or fill-in the blank exams are limited to a maximum of 10% true/false questions.

The time limit for completing an exam may allow no more than one minute per question (thus a 15-question test for a three hour course may have a maximum time limit of fifteen minutes).

Final exams may be open or closed-book exams, but must be the same for all students. In an open book exam, only materials approved for use in the student’s specific course may be used.

Final exams taken on paper to complete a correspondence course may only be administered by a proctor, designated by the course provider, who is not related to the student by blood, marriage, domestic partnership or any other relationship which might influence the proctor to improperly administer the exam. The proctor must certify in writing that he has complied with all rules of exam administration.

Final exams administered online may not be printed by the student, accessed multiple times or be available after the time-limit has passed.

Before a student may access the final exams for a correspondence course, the student must be enrolled for a maximum of one day for every eight credit hours of the total course hours which make up the CE package in which the student is enrolled. For an “online-only” CE course, the student must spend the full amount of credit hours on the internet reviewing course materials and taking quizzes before accessing the final exam (a 45 hour course will require the student to spend a full 45 hours studying and taking quizzes; the course provider’s online system must monitor the progress of this). For those who elect to take courses on paper, the eight credit-hour days may begin whenever the student has access to the course material.

Students may retake the final exam a second time if they fail on their first attempt. Questions on the second exam must be different from those on the first exam. Students may not take the final exam more than two times. If a student fails both exams, they must re-enroll in the course and complete the full number of credit hours again before testing.

No more than 10% of the questions on the final exam may be used in quizzes and other tests for the same course.

Students are not permitted to possess the final exam except in controlled testing situations.

DRE sponsor number to be included in all advertising

DRE Regulations §3007.6
Effective: January 1, 2011

All advertising for CE must contain the course provider’s four digit DRE Sponsor Number. The full eight digit number, used by the DRE to approve completed courses, must be excluded from all advertisements.

Non-CE course approval and certification for CE instructors

DRE Regulations §3011.1
Effective: January 1, 2011

Course instructors who present a live real estate-related course which is not approved by the DRE may apply to the DRE for CE credit. This application must include a copy of the course’s table of contents, if applicable, and an outline for the course.

The course provider of any DRE-approved CE course presented live may issue one certificate of completion to the course instructor during the period of approval for instructing a DRE-approved course.

Application for CE credit for authorship of a non-approved textbook

DRE Regulations §3011.2
Effective: January 1, 2011

If a writer seeks CE credit for writing a book that has not been approved for use as CE material, the writer must submit an application for credit to the DRE which includes:

  • the book/article’s publication date;
  • an explanation of how the material fits the DRE’s standards for course materials;
  • the number of hours the course provider devoted to writing the book/article; and
  • the time period during which the book/article was written.

Application for CE credit for non-approved courses

DRE Regulations §3011.4
Effective: January 1, 2011

If a student applies to the DRE to receive CE credit for a course that has not been approved by the DRE, the student must submit an application that includes the final grade received in the course and a certificate of completion.

Records to be kept by CE providers

DRE Regulations §3012.2
Effective: January 1, 2011

Course providers must keep records of every student who registers/attends their courses, and grades received on final exams. These records must be kept for at least five years, and must be extensive enough for the provider to grant a duplicate certificate of completion to students upon request.