The GOVENATOR Terminated “Degreed Broker” Assembly Bill in 2006… Sequel in 2007?
Part 2 Real Estate Licensing Laws Are Not Strict Enough
Real Estate Train Derailment: “Degreed Brokers” In Colorado, in order to become a real estate broker, one must have a salesperson license and two-years full time experience. California’s Real Estate Commissioner has the authority to substitute a broker applicant’s (two-years full time) sale experience with a degree from a four-year college or university.
Similar to the dramatic increase of the lightweight “Condition Sales License”, California has experienced an alarming rise in “Degreed Brokers.” The California Association of Realtors, (C.A.R.), was policing its own by sponsored State Assembly bill AB 1963 (Leslie) which eliminated the commissioner’s ability to accept a broker applicant’s four-year degree in lieu of two-years of full-time real estate sales experience.
In 2006, Governor Schwarzenegger returned (unsigned) AB 1963 (Leslie) to the State Assembly, stating the bill is “removing a provision that has been in existence for over thirty years,” and would “place further impediments on those seeking to start a business and work independently.”
Governor, we ask a carpenter to provide work experience, before applying for a contractor’s license, to protect consumers while he or she works on your property. However, in order to sell, finance or manage that same property, No Work Experience Is Needed? Real estate transactions in the double 00’s have little in common with transactions in the 1970’s. Anyone involved in a real estate transaction in the last ten years can attest to that. Thirty years ago the sales contracts were one legal page long and “caveat emptor” ruled. California Association of Realtors, (CAR), was sponsoring last year’s AB 1963 “to create higher standards for managing brokers in order to increase the knowledge and accountability of all agents when conducting transactions.” Scary thought: “Degreed Brokers” never represented parties in commercial and/or residential sales, property management or financing. Having worked in all three fields it baffles me how anyone could competently train and supervise agents and their activities/transaction with what in most cases, are consumers’ largest investment. California consumers!
The old saying “there is no substitute for experience” is especially true in real estate. Real estate attorneys are the first to admit they don’t know the day-to-day workings of a real estate professional. That’s why they hire “expert court witnesses.” (To explain the Standard of Care and Standard of Practice in a specific field of real estate)
This year, C.A.R sponsored SB 226 (Negrete McLeod) Degreed Broker Requirements, which mandates, before the Commissioner grants exemption for two-years sale experience, that the broker applicant must have a major or minor in real estate. Why will such a completely watered-down version of last year’s “Degreed Broker” law, land on the Governor’s desk? Politics.
Pat Kapowich, "Negotiating Smooth Transactions Throughout The South Bay" SiliconValleyBroker.com