Why AB 278 (Hill) is a Great Piece of Legislation for the California Real Estate Community

Why AB 278 (Hill) is a Great Piece of Legislation for the California Real Estate Community

Current law and regulations require the Department of Real Estate (DRE) to engage in formal disciplinary action against licensees for any infraction, even a minor one and even if the violation was promptly corrected.  Once accused, the licensee must defend themselves against the allegation or else risk losing their license. This could end up costing a considerable amount of time and money.  Furthermore, regardless of the licensee’s decision to defend the accusation, a public notice of the violation will be posted on the DRE’s website.  This public notice will remain on the DRE’s website indefinitely as there currently is no process available to have the entry removed.

Many other administrative agencies in California have the ability to issue a citation and/or a fine for minor infractions instead of proceeding to trial.  Within those agencies, licensees facing disciplinary action for relatively minor offenses still retain the option of defending themselves in a hearing if they choose, or they can opt to just pay a fine, with the assurance that in many cases, there will be no public posting of the minor offense.

However, the only way for the DRE to have the authority required to impose a citation is for AB 278 to be implemented (for an explanation of AB 278, click here).  If enacted, this bill would authorize the Real Estate Commissioner to adopt a system for the issuance of citations to licensees who engage in minor violations of the Real Estate Law rather than going through the lengthy and costly trial process.  AB 278 would require citations to be in writing, to indicate the provisions of law violated by a licensee, and to inform a licensee that the licensee may request a hearing to contest the citation. The bill would authorize citations to include an order of abatement or an order to pay an administrative fine of up to $1,000. It would authorize the commissioner to take disciplinary action against a licensee who fails to pay a fine within 30 days of assessment of the fine, as specified. The bill would also authorize the commissioner to adopt regulations to establish a similar system for the issuance of administrative citations to unlicensed persons acting in the capacity of a licensee. Serious violations will continue to be subject to the formal action process.

All in all, the passage of AB 278 will benefit the real estate industry because a minor violation will no longer lead to a blemish to one’s license history.

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