Article 2. Yacht And Ship Brokers of California Harbors And Navigation Code >> Division 3. >> Chapter 5. >> Article 2.
This article shall be known and may be cited as the Yacht and
Ship Brokers Act.
Unless the context otherwise requires, the following
definitions shall govern the construction of this article:
(a) "Broker" means a person who, except as otherwise excluded by
Section 710, for compensation or in expectation of compensation,
does, or negotiates to do, one or more of the following acts for
another or others:
(1) Sells or offers to sell, buys or offers to buy, solicits or
obtains listings of, or negotiates the purchase, sale, or exchange of
yachts, and who does not own those yachts.
(2) Leases or rents, offers to lease or rent, places for rent,
solicits a listing of a yacht for rent, or negotiates the sale,
purchase, or exchange of a lease on a yacht, for a rental or lease
period of more than 90 consecutive days to any one person or business
during any 12-month period, and who does not own that yacht.
(b) "Salesman" refers to a natural person who, except as otherwise
excluded by Section 710, for compensation or in expectation of
compensation, is employed by a licensed broker to do one or more of
the acts set forth in subdivision (a). The term includes "saleswoman"
(c) "Yacht" or "ship" refers to any vessel 16 feet or more in
length and under 300 gross tons used for navigating in water and
designed to be propelled by machinery or sail.
Except as otherwise provided by law, all records of the
department relating to yacht brokers and yacht salesmen shall be open
to inspection by the public during regular office hours.
Any declaration, license, or other record electronically
generated or transmitted pursuant to this article shall meet the
requirements of a "record" under Title 2.5 (commencing with Section
1633.1) of Part 2 of Division 3 of the Civil Code.
(a) The director may, in accordance with the State Civil
Service Act (commencing with Section 18500 of the Government Code),
select, employ, and fix the compensation of such employees as may be
necessary properly to administer this article, provided that no
employee of the department shall have an interest for financial or
other personal gain in the business of a licensed broker as director,
stockholder, officer, member, agent, salesman, or employee.
(b) The director may prescribe the duties of all employees.
(c) The director may regulate and control the issuance, denial,
suspension, and revocation, both temporary and permanent, of the
licenses issued under this article.
(d) The director may perform all other acts and duties necessary
for the proper enforcement of this article.
(e) The director may institute proceedings in any court of
competent jurisdiction to enforce the provisions of this article by
injunction or otherwise.
(f) The director or any member of the department may administer
oaths for the purpose of executing this article.
(g) The director may prescribe rules and regulations to carry this
article into effect in accordance with Chapter 4.5 (commencing with
Section 11371) of Part 1 of Division 3 of Title 2 of the Government
Code, and may authorize the department to establish branch offices in
such other cities as may be necessary for the proper administration
of this article.
In accordance with the provisions of Section 82 of this code,
the commission shall advise the department with respect to all
matters relating to the administration of this act. The department
shall submit any proposed regulations or changes in regulations
pertaining to this act for review and comment by the commission prior
(a) The director may adopt a seal and such other device for
use by the department as it may desire, which may be used to
authenticate all papers and documents required by this article which
are under the control of the department.
(b) Copies of all records and papers required by this article
which are in the department's office shall be received in evidence in
all cases, when certified under the hand and seal of the department,
equally and with like effect as the originals.
The Attorney General shall act as the attorney for the
department in all actions and proceedings pursuant to this article
and shall render to the department opinions upon all questions of law
arising under this article or in its administration.
The division shall publish or cause to be published on or
before July 1 of each year a directory of licensed brokers and
salespersons and shall post the directory on its Internet Web site.
The division may publish such additional information as it deems
expedient and may also issue a periodical bulletin concerning affairs
arising under the administration of this article.
(a) No person shall engage in the business of, act in the
capacity of, advertise as, or assume to act as a broker or
salesperson within this state without first obtaining a license under
this article to do so.
(b) Only the person to whom a license is issued may perform or
offer to perform any act subject to this article.
(c) No fictitious name shall be used by a broker in the conduct of
any business for which a license is required under this article,
unless a license bearing that fictitious name has been issued to the
(d) The department shall not issue a license under a fictitious
business name which is the same as or similar to the fictitious
business name on a license previously issued and in effect.
No licensed broker or licensed salesman shall practice any
fraud or deceit or make any fraudulent or grossly negligent
representation with respect to any act for which a license is
required under this article.
The definitions of "broker" and "salesperson," as set forth in
Section 701, do not include the following:
(a) A person who directly performs any act subject to this article
with reference to a yacht owned by that person or, in the case of a
corporation which, through its regular officers receiving no special
compensation therefor, performs any act subject to this article with
reference to the corporation's yacht.
(b) Services rendered by an attorney at law in performing duties
as an attorney at law.
(c) Any receiver, trustee in bankruptcy, or other person acting
under the order of any court.
(d) Any transaction involving the sale of property subject to
foreclosure of a security interest in a yacht which is conducted only
by the holder of the security interest or by a person licensed
pursuant to Chapter 11 (commencing with Section 7500) of Division 3
of the Business and Professions Code when liquidating repossessed
collateral pursuant to the written request of the holder of the
(e) Any transaction involving the sale, lease, or rental of a
yacht in excess of 300 gross tons or tenders thereof sold at the same
(f) Any transaction involving the sale, lease, or rental of a new
yacht or ship.
(g) Any transaction in the regular course of business by a
wholesale motor vehicle auction subject to regulation by the
Department of Motor Vehicles.
No person engaged in the business or acting in the capacity of
a licensed broker or salesman within this state shall bring or
maintain any action in the courts of this state for the collection of
compensation for the performance of any of the acts mentioned in
this article without alleging and proving that he was a duly licensed
broker or licensed salesman at the time the alleged cause of action
(a) No licensed broker shall employ or compensate, directly or
indirectly, any person for performing any of the acts within the
scope of this article who is not a licensed broker or salesman
licensed under the broker employing or compensating him or her,
except that a licensed broker may pay a commission to a broker of
another state or country.
(b) No salesman shall accept compensation for performing any of
the acts within the scope of this article from any person other than
the broker under whom the salesman is at the time licensed.
(c) No licensed salesman shall pay any compensation for performing
any of the acts within the scope of this article to any broker
licensed under this article, except through the licensed broker under
whom the salesman is at the time licensed.
Nothing contained in this article shall preclude a partnership
from performing acts for which a broker's license is required,
provided every partner through whom the partnership so acts is a
A licensed broker who accepts funds from others in connection
with any transaction subject to this article who does not, as soon as
possible, place those funds into a neutral escrow depository, shall
place the funds into a trust fund account maintained by the broker in
some bank or recognized depository and shall retain all the funds in
the account until the broker makes a disbursement of the funds in
accordance with written instructions from the person entrusting the
money. The written instructions shall also set forth the specific
purposes for which the broker may use money deposited with him or
her. If the broker wishes to use money from the deposit for a purpose
not included in the written instructions, the broker shall first
obtain the written consent of the person entrusting the money
specifically authorizing the use proposed by the broker for the
money. The written consent may be given to the broker by a letter or
facsimile. A separate record shall be maintained of all moneys
received subject to this section and shall further indicate the
disposition thereof. Any funds received by a licensed salesperson
shall be delivered by the salesperson to the broker under whom the
salesperson is at the time licensed.
As used in this section, "neutral escrow" means an escrow business
conducted by a person licensed under Division 6 (commencing with
Section 17000) of the Financial Code or by any person described by
subdivision (a) or (c) of Section 17006 of the Financial Code.
Within one month after the closing of a transaction in which
title to a yacht is conveyed from a seller to a purchaser through a
licensed broker, the licensee shall provide, or cause to be provided
to the seller and purchaser, a closing statement in writing of the
selling price thereof, including all charges and credits which shall
be itemized, and in the event an exchange of yachts is involved, the
information shall include a description of the yachts and amount of
added money consideration, if any. The licensee shall affix his or
her signature to the closing statement to attest to the facts
provided in the closing statement. If the transaction is closed
through escrow and the escrowholder renders a closing statement which
reveals the information, that shall be deemed compliance with this
section on the part of the licensed broker.
(a) No broker shall engage in any transaction for which a
license is required under this article without first obtaining a
signed written authorization to do so from the broker's principal. An
authorization to sell shall contain a description of the vessel,
including the undocumented vessel's registration number or the name,
official number, and home port if the vessel is documented with a
federal agency. The written authorization shall also state the type
of listing, the gross listing price, the agreed upon commission or
other compensation of the broker, and any repairs authorized to be
(b) An offer to purchase shall contain the description of the
yacht, including the undocumented vessel's registration number or the
name, official number, and home port if the vessel is documented
with a federal agency. The written authorization to purchase shall
also state the amount of deposit, terms of the sale, and any
contingencies or conditions under which a deposit shall not be
returned if the sale is not completed.
(c) When a broker prepares, or there is prepared on behalf of a
broker, a written authorization to sell or purchase, the broker shall
deliver a copy of the written authorization to the person executing
it. Receipt of the copy shall be made on the face of the original
Application for a license as a broker shall be made on forms
prescribed by the department and shall be signed by the applicant.
The application shall be accompanied by the broker license
Application for a license as a salesman shall be made on forms
prescribed by the department and shall be signed by the applicant
and by the employing broker. The application shall be accompanied by
the salesman license examination fee.
(a) A person shall be deemed qualified to submit an
application for a broker's license if, as shown on the department's
records, the person meets all of the following requirements:
(1) Is at least 18 years of age.
(2) Has not been cited for a violation of this article within the
preceding two years.
(3) Possesses a working knowledge and understanding of the
principles of the yacht brokerage business and profession.
(4) Either has been employed within five years preceding his or
her application as a California licensed salesperson for at least one
year, has been licensed as a California broker within five years
preceding his or her application, has owned and operated a marine
business selling new or used yachts for a minimum of three continuous
years, or has been employed as a broker or a yacht salesperson in
another state where that employment was a primary occupation for a
minimum of three continuous years immediately preceding application
for a broker's license in California. Proof of employment as a broker
in another state or as an employee of a marine business selling new
or used yachts in California shall be in the form of all of the
(A) State, if applicable, and federal income tax returns, or a
proof of earning statement made by the applicant under penalty of
perjury, for the three-year period preceding the filing of the
application in California.
(B) If bonded, a statement issued by the applicant's bonding
company that no action has been taken against the bond for fraud or
gross misrepresentation for the period for which the bond has been
(C) A copy of all business permits, issued by any state, county,
or city agency, which, if applicable, includes the fictitious
business name ("dba" or "doing business as") under which the
applicant conducted a yacht or ship brokerage business or a marine
business selling new or used yachts in California for the three-year
period preceding application for a California broker's license.
(D) If the applicant conducts a yacht or ship brokerage business
in another state that requires broker or salesperson licensing,
evidence of a current license issued by that state.
(b) If the applicant is a partnership, then one of the partners of
the applicant shall have the foregoing qualifications.
(c) If the applicant is a corporation, then the officer or
officers of the corporation to be designated for a license as
provided in this article shall have the foregoing qualifications.
The department may require proof as it deems advisable
concerning the honesty, truthfulness, and good reputation of the
applicant for a broker's or salesperson's license or of the officers
of any corporation making application before the issuance of a broker'
s license. For this purpose, the director may call a hearing in
accordance with this article, and at the request of the applicant
shall call a hearing.
(a) In addition to any proof of honesty, truthfulness, and
good reputation required of any applicant for a broker's license, the
department shall ascertain by written examination that the
applicant, and in case of a partnership or corporation applicant for
a broker's license that an officer or partner thereof through whom it
proposes to act as a yacht broker, has all of the following:
(1) Appropriate knowledge of the English language, including
reading, writing, and spelling, and of arithmetical computations
common to the yacht brokerage business.
(2) An understanding of the principles of the yacht brokerage
business and profession, including an understanding of a certificate
of ownership, certificate of number, security agreement, bill of
sale, and other documents required to register and number, and to
transfer title of an undocumented vessel pursuant to the Vehicle
(3) An understanding that transfer of title of a documented vessel
shall be performed in accordance with federal law as administered by
the United States Coast Guard.
(4) An understanding of maritime and admiralty liens with respect
to vessels and the requirements of the Department of Transportation
or other federal agency and the United States Coast Guard with
respect to documentation, mortgaging, and transferring of title of
(5) An understanding of agency contracts and of types and kinds of
listings and deposit receipts with respect to vessels.
(6) A general knowledge of equipment legally required on a yacht.
(7) A general understanding of the obligations between principal
and agent, and of the fiduciary relationship between them, and of
business ethics pertaining to the business and profession of yacht
brokers and yacht salespersons.
(8) A general knowledge of yachts.
(b) (1) If an applicant fails to pass the required examination,
the department shall so notify the applicant, may suggest further
study, and, upon payment of the required fee, shall schedule a
(2) Notwithstanding paragraph (1), whenever an applicant fails to
pass the written examination on the third attempt to do so, he or she
shall be prohibited from retaking the examination for a period of
six months from the date of taking the third examination.
The license first issued to a broker shall be for a period of
one year. Such license may be renewed for periods of two years upon
filing of the required application and payment of the required fee.
The license first issued to a salesman shall be for a period
of one year. Such license may be renewed for periods of two years.
Applicants for renewal of such licenses shall submit a recommendation
of the broker who is to be his employer certifying that the
applicant is honest, truthful, and of good reputation. The license of
a salesman may be renewed upon filing the required application and
payment of the renewal fee.
(a) An application on the form prescribed by the department
for the renewal of a broker or salesman license shall be filed with
the department prior to the last day of the period for which a
previous license was issued, accompanied by the applicable renewal
(b) Every license not renewed in accordance with subdivision (a)
shall expire at midnight of the last day of the period for which it
was issued and shall immediately be returned to the department. The
license may thereafter be reinstated only upon the filing of an
application therefor, accompanied by the payment of the renewal fee
required by this article, together with a penalty equal to 50 percent
of the renewal fee. No examination shall be required for the
reinstatement of a license which has expired solely for nonpayment of
the renewal fee as required by this subdivision, subject to Section
(c) An application for the reinstatement of a license which has
expired pursuant to subdivision (b) shall be executed under penalty
of perjury. The department may refuse to grant reinstatement if the
applicant, after the expiration of the license, has performed any act
or participated in any transaction for which a license is required
by this article or, during the period, has committed any offense or
performed any act which would be cause for the suspension or
revocation of a license under this article. However, the department
shall not refuse to grant reinstatement unless written notice of the
grounds of the refusal is mailed or delivered to the applicant.
(d) A salesman's license which expires other than pursuant to
subdivision (b) and under conditions beyond the control of the
salesman may be reinstated with another broker on payment of the
transfer fee and the renewal fee if applicable and without penalty.
(e) All fees charged and collected under this article shall be
paid by the department at least once a month, accompanied by detailed
statement, into the State Treasury to the credit of the Harbors and
Watercraft Revolving Fund.
(f) All fees charged and collected under this article and paid
into the State Treasury are continuously appropriated to carry out
the provisions of this article and shall be paid in the manner
provided by law.
(g) The department may establish a revolving fund in an amount
that it may determine subject to the approval of the director.
Temporary licenses may be issued to salespersons under the
(a) The licenses shall be issued for a period not to exceed 60
days and only one license shall be issued to each applicant.
(b) An application shall be filed for a temporary license and for
a permanent license and at the same time the applicant shall pay all
the prescribed fees.
(c) The application shall be in the form and upon the conditions
required by the department as provided in this article with respect
to a permanent salesperson's license.
(d) On or before the expiration date of the temporary license, the
licensee shall take a written examination for a permanent license.
If, without a valid excuse, the licensee fails to appear for the
examination at the time prescribed, the examination fee shall be
forfeited. In the event of failure to pass the required examination,
the department shall notify the applicant, may suggest further study,
and upon payment of fees, shall schedule a reexamination.
(e) The applicant shall be at least 18 years of age.
(a) A person who fails to renew his license within two years
after its expiration may not renew it pursuant to Section 724. Such
person may apply and obtain a new license, in which case all of the
provisions hereof shall apply as if such person were applying for a
license for the first time.
(b) In the event a salesman's license expires only because that
salesman procured a broker's license or a broker's license expires
only because that broker procured a salesman's license, either former
license may be reinstated under the provisions of Section 724 within
two years of the expiration of the latter license.
The department may issue a certificate of convenience to the
executor or administrator of the estate of a deceased broker, or if
no executor or administrator has been appointed, and until a
certified copy of an order making such appointment is filed with the
department, to the widow or other heir otherwise entitled to conduct
the business of the deceased, permitting such person to act as a
broker in the conduct of the business of the estate for a period of
90 days from and after the date of death pending, but not later than,
disposal of the business unless such person qualifies by examination
for and obtains a permanent broker's license. The department may
extend the certificate of convenience beyond the 90 days on the
showing of a just and reasonable cause.
(a) Every license issued to a corporation entitles one officer
thereof on behalf of the corporation to engage in the business of
broker without the payment of any further fee and such officer shall
be designated in the application of the corporation for a license.
When a broker's license is issued to a corporation, if it desires any
of its officers other than the officer designated by it in the
application as provided in this section to act under its license as a
broker, it shall procure an additional broker's license to so employ
each of such additional officers. For each officer other than the
officer so designated through whom the corporation engages in the
business of broker, the appropriate original or renewal fee shall be
paid in addition to the fee paid by the corporation.
(b) Each officer of a corporation through whom it is licensed to
act as a broker is, while so employed under such license, a licensed
yacht broker, but licensed only to act as such for and on behalf of
the corporation as an officer.
(c) An officer of a corporation licensed to act as a broker on
behalf of the corporation who desires also to act as a broker or
salesman under this article on his own behalf shall procure a
separate license in accordance with the provisions of this article.
(d) The department may deny, suspend, or revoke the broker's
license of a corporation as to any officer acting under its license
without revoking the license of the corporation. Every corporation
making application for a license under this article shall furnish the
department with a resolution of its board of directors giving the
name of the officer or officers who shall act for and on behalf of
(e) Every corporation licensed under the provisions of this
article may by resolution of its board of directors substitute
another officer for the one named in the corporation license,
provided the person to be substituted qualifies as provided for in
this article for a broker's license and the corporation pays the
appropriate original, renewal, or transfer fee as set forth in this
(a) Every license issued to a partnership entitles one partner
thereof on behalf of the partnership to engage in the business of
yacht broker without the payment of any further fee and such partner
shall be designated in the application of the partnership for a
(b) When a broker's license is issued to a partnership, if the
partnership desires any partner or partners other than the partner
designated by it as provided in this section to act under its license
as a broker, the partnership shall procure an additional broker's
license for each of such additional partner or partners. For each
partner other than the partner designated through whom the
partnership engages in the business of yacht broker, the appropriate
original or renewal fee shall be paid in addition to the fee paid by
(c) Each partner of a partnership is licensed to act as a broker
while such a partner under such license is a licensed broker, but is
licensed only to act as such for and on behalf of the partnership.
(d) A partner of a partnership licensed to act as a broker on
behalf of the partnership who desires also to act as a broker or
salesman under this article on the partner's own behalf shall procure
a separate license in accordance with the provisions of this
(e) The department may deny, suspend, or revoke the broker's
license of a partnership as to any partner acting under its license
without revoking the license of the partnership.
(f) Every partnership making an application for a license under
this article shall set forth in the application the name of the
partner who is to act under the license for and on behalf of the
(g) Every partnership licensed under the provisions of this
article may substitute another partner for the one named in the
partnership license provided the person to be substituted qualifies
as provided for in this article for a broker's license and the
partnership pays the appropriate original, renewal, or transfer fee
as set forth in this article.
(a) Any limited liability company licensed by the department
as a yacht broker on July 1, 2001, in order to continue to be
licensed after that date, shall apply to the department in the form
of an individual, partnership, or corporation for a broker's license
on or before the expiration date of its existing license.
(b) On or before February 1, 2001, the department shall provide
notice of the requirements imposed by subdivision (a) to any limited
liability company licensed by the department.
(a) Before any broker's license shall be issued or renewed by
the department for any applicant, the applicant shall procure, file,
and maintain with the department a good and sufficient bond in the
amount of fifteen thousand dollars ($15,000) with a corporate surety
duly licensed to do business within the State of California, and
conditioned that the applicant shall not practice any fraud or deceit
or make any fraudulent or grossly negligent representations that
will cause a monetary loss to any person for whom the broker acts
under this article.
(b) If any person suffers any loss or damage by reason of any
fraud or deceit practiced on that person or any fraudulent or grossly
negligent representation made to that person by a licensed broker or
the broker's sales personnel acting for the broker on the broker's
behalf or within the scope of the employment of the sales personnel,
which fraud, deceit, or fraudulent or grossly negligent
representation is practiced or made with respect to any act of the
broker or the sales personnel for which a license is required under
this article, that person has a right of action against the broker,
the sales personnel, the surety upon the broker's bond, or the
deposit held by the department in accordance with Section 731. If any
action is commenced upon the bond, the surety thereunder and the
licensed yacht broker with respect to whom the bond has been issued
shall immediately notify the department of the action.
(c) If an action is commenced on the bond of a licensed broker,
the department may require the filing of an additional bond, and
immediately upon the recovery in any action on the bond, the broker
described therein shall file a new bond. Failure to file an
additional bond within 15 days after notification that an additional
bond is required by reason of action against the bond or after
recovery on a bond constitutes a failure to comply with this article,
in which case the license of the licensed broker whose bond has been
canceled or on whose bond recovery has been made may be suspended.
(d) If a broker's bond is canceled for a reason other than an
action being commenced upon it, a new bond shall be filed by the
broker. Failure to file a new bond within 30 days after notification
that a new bond is required because a previous bond has been canceled
constitutes a failure to comply with this article, in which case the
license of the licensed broker whose bond has been canceled may be
(a) A cash deposit given instead of the bond required by
Section 730 shall be held by the department during the life of the
license and for a period of four years after the expiration of the
(b) If an action is commenced on the cash deposit of a licensed
broker pursuant to subdivision (a), the department may require the
filing of an additional cash deposit, and immediately, upon the
recovery in any action on the deposit, the broker described therein
shall file a new cash deposit, equal to the amount specified in the
action or recovery, but no greater than the amount specified in
subdivision (a) of Section 730, whichever is less. Failure to file an
additional cash deposit within 30 days after notification that an
additional cash deposit is required by reason of an action filed
against the cash deposit, or after the recovery on a cash deposit,
shall constitute a failure to comply with this article, in which case
the department may suspend the license of the licensed broker whose
cash deposit has been acted on, or where a cash deposit recovery has
The department may deny an application or temporarily suspend
or permanently revoke the license of a broker or a salesperson at any
time if the licensee, while a broker or salesperson, in performing
or attempting to perform any of the acts within the scope of this
article, has committed any of the following acts:
(a) Makes any substantial misrepresentation, including a false
advertisement or an omission of relevant facts upon which any person
(b) Makes a false warranty of a character likely to influence,
persuade, or induce any person with whom business is transacted under
(c) Engages in a continued and flagrant course of
misrepresentation or makes false warranties whether or not relied
upon by another person.
(d) Acts for the buyer and seller in a transaction without full
disclosure of that fact to the buyer and seller and their written
consent, except in the case where the selling broker is not the
(e) Commingles the money or other property of his or her principal
with that of his or her own or uses it for any purpose other than
that for which it was entrusted, when the yacht involved in the
transaction is not his or her own.
(f) Disburses or uses entrusted money for purposes other than
those specifically authorized by Section 714.
(g) Uses coercive or oppressive methods for the purpose of
obtaining business or of procuring a listing or participating in a
(h) Quotes prices different from the gross listing prices without
the consent of the seller.
(i) Engages in any other conduct constituting fraud or dishonest
dealings, either with respect to his or her principal or other
(j) Permits his or her name to be used for the purpose of
assisting any person who is not a licensed broker or salesperson to
evade this article.
(k) Demonstrates negligence or incompetence in performing any act
for which he or she is required to hold a license.
(l) As a broker licensee, fails to exercise reasonable supervision
over the activities of his or her salespersons, or, as the person
designated by a corporate or partnership licensee, fails to exercise
reasonable supervision and control over the activities of the
corporation or partnership for which a yacht and ship broker's
license is required.
(m) Fails to act in accordance with, or disregards, his or her
fiduciary duty toward a principal.
(n) Violates any provisions of Section 708, 712, 714, 715, 716,
730, or 731, or the rules and regulations of the department
implementing this article.
The department may deny an application or may suspend or
revoke the license of a yacht broker or yacht salesperson who, within
four years immediately preceding, has committed any of the following
(a) Has procured a license under this article for himself or
herself or another by fraud, misrepresentation, or deceit.
(b) Has been convicted of a felony or any crime involving moral
(c) Has withheld information from the department that he or she at
any time has been convicted of a felony or any crime involving moral
(d) Knowingly authorizes, directs, connives, or aids in the
publication, advertisement, distribution, or circulation of any
material false statements or misrepresentation concerning his or her
business or any transaction under this article.
(e) Has acted or conducted himself or herself in a manner that
would warrant the denial of his or her application for a broker's or
salesperson's license pursuant to Section 720.
(a) The department shall not deny, suspend, or revoke a
license granted under this article without a hearing, except the
department may suspend a license without a hearing for failure of a
broker to maintain a bond as specified in subdivision (d) of Section
730, or for failure of a broker to make available to the department,
for inspection, any records, as set forth in Section 735.1.
(b) The department may upon its own motion, and shall upon the
verified written complaint of any person which sets forth facts which
could be grounds for the denial, suspension, or revocation of a
license pursuant to this article, investigate the actions of any
broker or salesman whether or not licensed.
(c) The suspension, expiration, or revocation by operation of law
of a license issued by the department, or its surrender, whether
voluntary or not, does not deprive the department of its authority,
during the period in which the license may be renewed, reinstated, or
reissued, to institute or continue a disciplinary proceeding against
the licensee upon any ground provided by law, to enter an order
suspending or revoking the license, or to take any action against the
licensee on any other ground provided by law.
(d) A broker whose license has been suspended pursuant to
subdivision (a) for failure to make records available to the
department for inspection, may request that an expedited hearing be
held within 30 days of the suspension before an administrative law
judge to appeal the suspension. Upon a showing of good cause to
reinstate the license, the broker's license shall be reinstated. If
no good cause is found, the broker's license may be revoked.
(e) (1) Except as otherwise provided by law, in any order issued
in resolution of a disciplinary proceeding under this article, the
department may request the administrative law judge to direct a
licensee found to have committed a violation or violations of this
article to pay a sum not to exceed the reasonable costs of the
investigation, prosecution, and enforcement of the case.
For purposes of this paragraph, "reasonable costs" shall include,
but not be limited to, all of the following:
(A) Attorney, paralegal, and investigator fees and costs,
including salary, travel, and other expenses attributable to hours
expended on the case by employees of the office of the Attorney
General and the department.
(B) Witness fees, travel, and other expenses paid to or in
connection with witnesses to facilitate their attendance and
testimony at the disciplinary proceeding or to facilitate their
appearance at a deposition, by video or by other means.
(C) Fees and costs attributable to expert review, including, but
not limited to, laboratory analysis, physical examination, and
psychological examination, whether by an independent expert or a
staff member of the department.
(D) Administrative expenses attributable to case preparation and
presentation, including, but not limited to, exhibit preparation and
document copying, postage, telephone calls, word processing, whether
by an independent contractor or a staff member of the department, and
costs for obtaining certified public documents.
(2) In the case of a disciplined licensee that is a corporation or
a partnership, the order may be made against the licensed corporate
entity or licensed partnership.
(3) A declaration under penalty of perjury of the actual costs, or
a good faith estimate of costs if the actual costs are not
available, signed by the director, and containing sufficient
information by which the administrative law judge can determine the
costs incurred in connection with the matter and the reasonableness
of the costs, shall be prima facie evidence of reasonable costs of
investigation, prosecution, and enforcement of the case.
(4) The administrative law judge shall make a proposed finding of
the amount of reasonable costs of investigation and prosecution of
the case when requested pursuant to paragraph (1). The department may
reduce or eliminate the award of any costs by the administrative law
judge, and may request the administrative law judge to reconsider
his or her decision if the proposed decision does not make a finding
on costs as requested pursuant to paragraph (1).
(5) Where an order for recovery of costs is made and timely
payment is not made as directed, the department may enforce the order
for repayment in any appropriate court. This right of enforcement
shall be in addition to any other rights the department may have as
to any licensee to pay costs.
(6) In any action for recovery of costs, proof of the department's
decision shall be conclusive proof of the validity of the order of
payment and the terms for payment.
(7) The department shall not renew or reinstate the license of any
licensee who does not pay all of the costs ordered under this
(8) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the
Harbors and Watercraft Revolving Fund.
(9) Nothing in this section shall preclude the department from
including the recovery of the costs of investigation, prosecution,
and enforcement of a case in any stipulated settlement.
(a) Every broker shall maintain a definite place of business
in this state as his principal office and may establish other branch
offices throughout the state. Every broker maintaining more than one
place of business within this state shall procure an additional
license for every branch office maintained by him. Every broker shall
keep the department informed at all times of the address of his
principal and branch offices and any changes of address.
(b) Every broker's license shall be prominently displayed in the
broker's principal office. The license for each branch office, if
any, of such broker shall be prominently displayed in such branch
office. Every salesman's license shall be prominently displayed in
the principal office or branch office of the broker in which the
business of such salesman is transacted. When a broker or any branch
office to which a license was issued, for any reason ceases to be
licensed, or when there is a name or address change, such license
shall be immediately returned to the department.
(c) Every salesman's license shall remain in the control of the
broker by whom the salesman is employed until the license is canceled
or until he leaves the employment of the broker. Immediately upon
the salesman's withdrawal from the employment of the broker, such
broker shall return such salesman's license to the department for
cancellation and shall notify the department of the exact date of
(d) Upon the issuance of a license, a pocket card of such size,
design, and content as may be determined by the department may be
issued without charge to such licensee, which card shall be evidence
that the licensee is duly licensed pursuant to this article. When any
broker to whom a card is issued ceases for any reason to be licensed
as a broker, the card issued to such broker shall be mailed or
delivered by the broker to the department for cancellation. When any
salesman to whom a card is issued ceases to be a salesman for any
reason, the card issued to him shall be mailed or delivered to the
department for cancellation.
A licensed broker shall retain, for four years, copies of
all listings, deposit receipts, canceled checks, trust records, and
other documents executed or obtained by the broker in connection with
a transaction for which a broker's license is required. These
records shall be made available to the department for inspection upon
request. If the records have not been made available within 30 days
of a request by the department, the department may subpoena the
requested records. If the records have not been made available within
14 days from the requested day of production on the subpoena, and
the director determines that the public may be at risk if the broker
continues to be licensed, the department may suspend the broker's
license pursuant to Section 734.
The department shall accept any electronic record or
electronic or digital signature created, generated, sent,
communicated, received, or stored by electronic means on or after
January 1, 2000. A "digital signature" means a signature that
complies with the regulations adopted by the Secretary of State
relating to digital signatures.
(a) The division shall adopt regulations setting forth the
fees to be charged and collected under this article. The fees shall
be sufficient to reimburse the division for the reasonable costs of
implementing this article.
(b) A criminal records investigation fee shall be collected for
both a salesperson's and broker's license in an amount determined by
the Department of Justice, or by any other state or federal custodian
of criminal records from which the division has requested
information concerning an applicant's criminal record, not to exceed
the amount needed to reimburse the division for conducting the
criminal records investigation.
(c) The following fees shall apply until such time that the
division adopts regulations pursuant to subdivision (a):
(1) Two hundred dollars ($200) for each original broker's license.
(2) Seventy-five dollars ($75) per year for the renewal of an
original broker's license.
(3) One hundred dollars ($100) for each original salesperson's
(4) Fifty dollars ($50) per year for the renewal of an original
(5) Twenty-five dollars ($25) for a salesperson's temporary
(6) Twenty-five dollars ($25) for each license obtained by a
broker for a branch office and for each renewal thereof.
(7) Ten dollars ($10) for each transfer of a salesperson's license
for each change of employment.
(8) Ten dollars ($10) for each duplicate license.
(9) Ten dollars ($10) for each substitution of a name in the
license of a corporation or a partnership.
(10) Ten dollars ($10) for the granting of each certificate of
convenience under Section 727.
(11) Twenty-five dollars ($25) for each examination.
(a) The proceedings and hearings under this article shall be
conducted in accordance with Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code,
including the right of judicial review as provided for in Section
11523 of the Government Code.
(b) In addition to any other disciplinary action and in lieu of a
separate action in civil court, the department, as part of a
disciplinary hearing conducted by an administrative law judge, may
impose a civil penalty as provided in Section 739.
(a) Each violation of a section or subdivision of a section of
this article, excepting Section 709, is a misdemeanor punishable by
a fine not exceeding one thousand dollars ($1,000), provided that a
violation committed willfully and with knowledge of the provisions of
the violated section or subdivision is punishable by a fine not
exceeding one thousand dollars ($1,000), or by imprisonment in the
county jail not exceeding one year, or by both that fine and
(b) Each violation of Section 709 is a misdemeanor punishable by a
fine not exceeding one thousand dollars ($1,000), or by imprisonment
in the county jail not exceeding one year, or by both that fine and
Any person who violates any provision of this article, or any
regulation adopted pursuant to this article, is liable for a penalty
in an amount not less than one hundred dollars ($100) and not to
exceed one thousand five hundred dollars ($1,500) for each separate
violation. The penalties provided in this section are in addition to
the remedies or penalties available under all other laws of this
Every civil or administrative action brought under this article at
the request of the director shall be brought by the Attorney General
in the name of the people of the State of California, in any court
of competent jurisdiction, or through the Office of Administrative
Hearings pursuant to Section 737, except that, when the civil action
is to be filed in a small claims court, the director may bring the
The amount of penalty that is assessed pursuant to this section on
each count of violation shall be based upon the nature of the
violation and the seriousness of the effect of the violation upon the
implementation of the purposes and provisions of this article. Any
sum that is recovered under this section shall be deposited in the
State Treasury to the credit of the Harbors and Watercraft Revolving
Any action taken in the enforcement of this article shall be
commenced within three years of the department's discovery of the
facts constituting the grounds for that action.