Real Estate Practice
Licensing and supervision
California salespersons must work under a responsible broker. Salespeople may not accept compensation from anyone but their employing broker. Trust funds must be deposited into a broker's trust account, with no commingling with personal or operating funds; misappropriation is conversion, a crime. Records are retained for three years, and licensees complete 45 hours of continuing education every four years, including mandated topics.
Disclosures in practice
Sellers deliver the Transfer Disclosure Statement, the Natural Hazard Disclosure, lead-based paint disclosure for pre-1978 housing, and Megan's Law notice. Listing agreements include exclusive right to sell, exclusive agency, and open listings. Compensation follows procuring cause in the absence of an agreement.
Traps
The exam loves blind advertising, soliciting sellers who already listed, and licensees buying property without disclosing their licensed status in writing. Note that a licensee must disclose that status when acquiring an interest in real property. Fair housing and Unruh Act protections prohibit discriminatory advertising and steering.
Rule of thumb
If a licensee touches another person's money, it goes into the trust account and stays untouched until disbursement.
Worked example
A broker receives a $10,000 good-faith deposit on Tuesday. The purchase agreement allows deposit into a broker's trust account or escrow. If the broker holds it, the deposit must go into the trust account promptly and cannot fund office rent, even temporarily.