California Real Estate License Number Must Appear on "First Contact" Materials

As a result of Senate Bill 1461 (Negrete McLeod), effective July 1, 2009, California real estate licensees will have to have their license number displayed on "all solicitation materials intended to be the first point of contact with consumers…". This includes "business cards, stationery, advertising flyers, and other materials designed to solicit the creation of a professional relationship between the licensee and a consumer… ." It will not include "an advertisement in print or electronic media and 'for sale' signs."

The idea behind this legislation has been floating around for at least a couple of years. Indeed, the provisions had been contained in bills passed during the preceding legislative sessions, but the Governor had vetoed those bills for unrelated matters. In his 2007 veto message he said, "I do support one aspect of the [vetoed] bill. I urge the Legislature to consider legislation next year that authorizes the Department of Real Estate Commissioner to require real estate brokers and salespersons to display his or her license number on consumer first contact materials." This year, the license number was the sole issue dealt with in SB 1461. The Governor signed it into law on September 25.

There are various reasons a person might want to know an agent's license number. For one thing, it is against the law to pay an unlicensed person for performing real estate services. Regardless of that, you might not even want to engage an unlicensed person to perform such services. One thing you can count on: if they don't have a license, they sure won't have errors and omissions insurance.

There are various ways to check a person's license status. One method, of course, is to ask to see it. But that might not be either comfortable or possible. Another way to check is by means of the Department of Real Estate (DRE) website. At this user-friendly site it is easy to look up anyone having a real estate license and determine their place of business, license status and expiration date, and, interestingly, any record of disciplinary action. You can check a person either by looking up the name or by looking up the license number.

A common problem in attempting to check license status by name is that the person may only be known to the consumer by a nickname or gimmick ("the Happy Homes specialist"), and their licenses aren't registered that way. My license, for example, is issued to Robert Hunt, not Bob. While most people would probably be able to figure that out, this is not the case for nicknames -- especially if it's something like "Lefty."

The new law may create some legitimate questions as to what is meant by "solicitation materials intended to be the first point of contact". The legislation authorizes the DRE Commissioner to adopt regulations "identifying the materials in which a licensee must disclose a license identification number."

SB 1461 also requires that the agent's license number must appear "on real property purchase agreements" when the person is acting as an agent in the transaction. This will generally be easy to do, as the standard purchase agreement that is produced by the California Association of Realtors® (CAR) already contains a place for such information, even though it is not currently mandatory. Requiring that the agent's license number be on the contract will make it easier on escrow companies to fulfill their duty to make sure that they don't issue commission checks to unlicensed persons.

SB 1461 was sponsored by the Department of Real Estate. It had no opposition. It's a good idea.

Written by Bob Hunt Author for www.RealtyTimescom. Copyright © 2008 Realty TimesAll Rights Reserved.