New Law Requires Disclosure of License ID Number

On July 1, 2009, all real estate licensees will be required to follow newly mandated statewide disclosures. Sponsored by the California Department of Real Estate (DRE) and enacted by SB 1461, the new law requires a real estate licensee to disclose his or her DRE license number on all "solicitation materials intended to be the first point of contact with consumers" and on real property purchase agreements when acting as an agent in those transactions.

The law states that a licensee must disclose his or her license identification number on purchase contracts, business cards, stationery, advertising fliers, and other materials designed to solicit the creation of a professional relationship between the licensee and a consumer. The bill excludes advertisement in print or electronic media and “for sale” signs.

The DRE claims the disclosure is necessary due to the fact that with over 500,000 licensees in California, many with the same or similar names, it is sometimes difficult for consumers and licensees alike to verify the license status of those with whom they are dealing.

The DRE is in the process of developing regulations to implement the law to clarify what materials are needed to contain a licensee’s identification number. These regulations have not been adopted yet, so if you see any opportunity for improvement, please send your suggestions to Matthew Hargrove at mhargrove@cbpa.com:

ADOPT SECTION 2773 TO READ:

Section 2773. Disclosure of License Identification Number on Solicitation Materials – First Point of Contact with Consumers.

(a) A real estate broker or salesperson, when engaging in acts for which a license is required, shall disclose its, his or her real estate license identification number on all solicitation materials intended to be the first point of contact with consumers. If the name of more than one licensee appears in the solicitation, the license identification number of each licensee shall be disclosed.
Solicitation materials intended to be the first point of contact with consumers, and in which a licensee must disclose a license identification number, include the following:

(1) Business cards;
(2) Stationery;
(3) Websites owned, controlled, and/or maintained by the soliciting real estate licensee; and
(4) Promotional and advertising fliers, brochures, email and regular mail, leaflets, and any marketing or promotional materials designed to solicit the creation of a professional relationship between the licensee and a consumer, or which is intended to incentivize, induce or entice a consumer to contact the licensee about any service for which a license is required.
The type size of the license identification number shall be no smaller than the smallest size type used in the solicitation material.
(b) For the purposes of Business and Professions Code Section 10140.6, solicitation materials do not include the following:
(1) Advertisements in electronic media (including, without limitation, radio, cinema and television ads, and the opening section of streaming video and audio);
(2) Print advertising in any newspaper or periodical; and
(3) “For Sale” signs placed on or around a property intended to alert the public the property is available for lease, purchase or trade.
Note: Authority cited: Section 10080, Business and Professions Code. Reference: Section 10140.6, Business and Professions Code.