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The Bay Area Real Estate Journal
California Real Estate Commissioner Says Fees are Rising, Enforcement Getting Tougher
Submitted Mar 5, 2009
Real estate brokers, agents and mortgage lenders in California face higher licensing costs, stiffer regulatory enforcement and greater powers for the state agency overseeing their industry, Real Estate Commissioner Jeff Davi said March 5.
Licensing costs for brokers and agents will rise by nearly 80 percent to fund increased enforcement from his office, Davi said. The current rates, $145 for a four-year license for agents and $165 for a four-year license for brokers, are about the same as they were in 1982, he said.
Both residential and commercial real estate brokers and agents are required to get a state license in order to conduct business in California.
A California real estate brokers license also allows a person to act as a mortgage broker.
The commissioner addressed the Silicon Valley chapter of the Building Owners and Managers Association as well as leadership from several other local real estate groups including the Santa Clara County Association of Realtors and the Commercial Real Estate Women of Silicon Valley.
The new fees are supposed to become effective July 1, a spokesman with the Department of Real Estate said.
His agency’s $44.7 million annual operating budget comes entirely from licensing fees, he said. The agency employs 344.
The increased fees should ensure that with the declining number of agents and brokers statewide his office remains sufficiently funded to do the enforcement work it needs. The number of licensed real estate agents and brokers peaked in the state in December at 548,000, Davi said. It has since fallen to less than 530,000.
At the beginning of the year, the commissioner also gained new powers to bar agents and brokers from the business for as long as 36 months if they have been subjected to disciplinary action by his agency. A person convicted of certain crimes is also subject to license revocation and consequently being barred from the industry, he said.
“Right now, if a person is disciplined by my department and loses his or her real estate license, that person can still go to work at a bank or a title company,” he said. But if he bars the person from the industry, that person cannot.
“There are more bar orders coming,” he said.
In addition, under new federal law signed by former President Bush, which becomes effective at the end of August, anyone who originates loans and interacts with the public will not only have to have a license from his agency but will also have to be licensed, registered and fingerprinted through the National Mortgage Licensing System. The goal is to create a national data base of mortgage loan originators.
“So you can’t leave Vermont because your license was revoked there and go to California and get a license here and go to work,” he said.
Davi also said the state’s tax protection for commercial properties under Proposition 13 is under debate because of the state’s budget woes. At the same time, he said he did not think changes were a significant worry under Gov. Arnold Schwarzenegger.
“I’d be more concerned about losing [mortgage] interest deductions at the federal level,” he said.
Davi is a former Monterey real estate broker who was appointed by Schwarzenegger in 2004.
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