California Real Estate 9-Hour Survey Course Notes

This course satisfies the $9$ -Hour Continuing Education requirement for California Salesperson and Broker license renewal.
Coverage includes Agency, Ethics, Fair Housing, Trust Fund Handling, Risk Management, and Management & Supervision.
Includes implicit bias components mandated by California Senate Bill $236$ ( $SB 236$ ) and Senate Bill $263$ ( $SB 263$ ).

$\text{Clean-Up Legislation (Effective January } 1, 2019\text{)}$ : Updates terminology to plain language. "Selling Agent" is now "Buyer's Agent"; "Listing Agent" is now "Seller's Agent"; "Purchaser" is now "Buyer"; "Associate Licensees" are now "Salespersons and Broker Associates."
$\text{Agency Definitions}$ : Under Civil Code $\S 2295$ (since $1872$ ), an agent represents a principal in dealings with third persons.
$\text{Fiduciary Duties}$ : Agents owe principals the duties of Reasonable Care (non-negligence), Obedience (to legal instructions), Loyalty (obtaining best terms/no secret profits), Accounting (money handling), and Notification (relevant facts).
$\text{Dual Agency}$ : Occurs when an agent acts concurrently for both principals. It is legal only with informed written consent from both parties. Unlawful (divided) agency is a violation of Business and Professions Code $\S 10176\text{(d)}$ .
$\text{Disclosure Forms}$ : Under the clean-up law, disclosure is required for all properties including multi-unit ( $5+$ ) residential properties, vacant land, and mobile homes.
$\text{Power of Attorney}$ : A written instrument authorizing an attorney-in-fact to act for a principal. Narrowly interpreted in Sheetz v. Edmonds; isoloated transactions only for non-licensees.

$\text{REALTOR® Code of Ethics}$ : Adopted in $1913$ ; based on the "Golden Rule." It requires a higher standard of conduct than the law.
$\text{Article } 1$ : Protect and promote the interests of the client while treating all parties honestly.
$\text{Article } 12$ : True picture in advertising; brokerage name must be "clear and prominent."
$\text{Implicit Bias (SB 263)}$ : Unconscious associations that differ from openly held beliefs.
$\text{Bias Tools}$ :
- Affinity Bias: Preference for those who look/act like us.
- Halo Effect: Assuming a person has high morality because they are attractive or likable.
- Horn Effect: Negative categorization based on a single unattractive trait.
- Confirmation Bias: Seeking info that reinforces pre-existing beliefs.

$\text{Unruh Civil Rights Act}$ : Prohibits discrimination in all business establishments. Remedies include actual damages up to $3\times$ the amount, but no less than $\$1,000$ .
$\text{Fair Housing Acts}$ : Civil Rights Act of $1866$ (race/national origin); Federal Fair Housing Act of $1968$ (Jones v. Mayer); 1988 Amendments (added familial status and handicap).
$\text{Disclosure of Deaths}$ : Under Civil Code $\S 1710.2$ , no liability for failing to disclose a death occurring more than $3$ years prior. AIDS deaths must never be disclosed under federal law.
$\text{Holden Act (1977)}$ : Prohibits redlining based on neighborhood trends or characteristics.
$\text{Lending Discrimination}$ : Disparate impact occurs when neutral policies disproportionately affect protected groups. Reverse redlining targets minorities with high interest rates.

$\text{Trust Funds}$ : Money or value received on behalf of others ( $\text{cash, checks, personal notes, vehicle pink slips}$ ).
$\text{Handling Timeline}$ : Funds must be placed into a neutral escrow, the hands of the offeree, or a trust account within $3$ business days of receipt.
$\text{Commingling}$ : Mixing trust funds with personal funds. A broker may keep up to $\$200$ in trust to cover bank fees.
$\text{Advance Fees}$ : Materials must be submitted to the Commissioner $10$ days before use. Funds must be deposited in trust and only withdrawn after accounting is provided.
$\text{Records}$ : Columnar records ( $RE 4522, 4523, 4524, 4525$ ) must show transactions in chronological sequence. Reconciliation with bank statements is required monthly.

$\text{Four Strategies}$ : Preventive Action (Likely risks), Corrective Action (Low-likelihood consequences), Transferring Risk (E&O Insurance), or Retaining Risk (Remote possibility).
$\text{Anti-Trust}$ : Prohibits price/commission fixing, territorial assignments, and group boycotts.
$\text{Do Not Call (DNC) Registry}$ : Fines up to $\$11,000$ per call. Prior clients/expired listings may be called for up to $18$ months.
$\text{Systemic Bias}$ : Inherent tendencies in systems (e.g., overbroad criminal history bans) to produce discriminatory outcomes.
$\text{PAUSE Method}$ : Pay attention, Ask, Understand, Search, Execute inclusive actions.

$\text{Broker Responsibility}$ : Under Regulation $2725$ , the broker is responsible for all licensed activity and must establish monitoring systems.
$\text{Personnel Filing}$ : Notify DRE within $5$ days of hiring and $10$ days of termination via form $RE 214$ .
$\text{Record Retention}$ : All transaction documents must be kept for $3$ years (B&P \S 10148).
$\text{Team Names (AB 2018)}$ : Must include the surname of at least one member plus "associates," "group," or "team." Advertising must conspicuously show the responsible broker’s identity.
$\text{Advertising}$ : Must include licensee name, license number, and broker identity since January $1, 2018$ .

$\text{Unit } 2 \text{ Video Scenario}$ :
- Q1: Assuming David Steinberg is a bad tenant because of a flannel shirt/haircut is what bias? (Answer: Horn Effect/Perception Bias).
- Q2: Categorizing Rita Walker as cleaner because she is a woman is what bias? (Answer: Stereotyping/Perception Bias).
- Q3: Purposefully seeking facts to confirm David Steinberg's unfitness while ignoring his credit score? (Answer: Confirmation Bias).
$\text{Unit } 3 \text{ Video Scenario}$ :
- Q1: The fact that $88\%$ of South Grove are African American or Latino is an example of what? (Answer: Housing segregation/demographic patterns).
- Q2: Acme Lenders charging Mr. and Ms. Gonzales higher interest based on location? (Answer: Reverse Redlining/Disparate Impact).
$\text{Unit } 5 \text{ Video Scenario}$ :
- Q1: Joseph and Victor seeing an ad for "Our Lady of the Desert Catholic church"? (Answer: Fair Housing violation via religious preference in advertising).
- Q2: Broker's comment that the neighborhood is safer because Catholics live there? (Answer: Implicit bias/Stereotyping).