2005 California Business and Professions Code Sections 10167-10167.17 Article 2.3. Prepaid Rental Listing Service

BUSINESS AND PROFESSIONS CODE
SECTION 10167-10167.17

10167.  The definitions used in this section shall govern the
construction and terms as used in this article:
   (a) "Prepaid rental listing service" means the business of
supplying prospective tenants with listings of residential real
properties for tenancy, by publication or otherwise, pursuant to an
arrangement under which the prospective tenants are required to pay
an advance or contemporaneous fee (1) specifically to obtain listings
or (2) to purchase any other product or service in order to obtain
listings, but which does not otherwise involve the negotiation of
rentals by the person conducting the service.  "Prepaid rental
listing service" does not include the business of providing roommate
referral information designed to assist persons in locating a
roommate who meets various selection criteria related to the
prospective roommate's personal traits, characteristics, habits or
preferences, and selection criteria related to the residential real
property occupied by the prospective roommate.
   (b) "Licensee" means a person licensed to conduct a prepaid rental
listing service or a person engaged in the business of a prepaid
rental listing service under a real estate broker license.
   (c) "Location" means the place, other than the main or branch
office of a real estate broker, where a prepaid rental listing
service business is conducted.
   (d) "Designated agent" means the person who is in charge of the
business of a prepaid rental listing service at a given location.
   (e) "Fee" means the charge required by a licensee (1) to obtain
listings of residential real properties for tenancy or (2) to
purchase any other product or service in order to obtain listings.
   (f) "Service charge" means the amount of the fee that a licensee
may retain if a prospective tenant finds housing through a source
other than the listings supplied by the licensee.
10167.1.  This article shall not apply to a newspaper of general
circulation.
10167.2.  (a) It is unlawful for any person to engage in the
business of a prepaid rental listing service unless licensed in that
capacity or unless licensed as a real estate broker.
   (b) (1) The requirements of this article apply only to the
provision of listings of residential real properties for tenancy by
prepaid rental listing services.  Except if expressly provided
otherwise in this article, the requirements of this article do not
apply to any other goods or services sold by a prepaid rental listing
service as long as the purchase of those goods or services is not
required to obtain those listings, and as long as the purchase of
those goods or services is not included in the same contract as the
contract to provide those listings, and as long as the contract to
provide those listings clearly specifies that the purchase of any
other goods and services is optional, and as long as the price
charged for any other goods and services is fair and reasonable.
   (2) In an action alleging that the price charged for any other
goods and services is not fair and reasonable, the burden shall be on
the commissioner to demonstrate that the price charged unreasonably
exceeds the fee customarily charged for the same or comparable goods
or services in the community in which the prepaid rental listing
service operates.  The fact that the price charged for goods or
services exceeds the cost incurred by the prepaid rental listing
service shall not render the price charged for the goods or services
to be unfair or unreasonable, so long as the price charged does not
unreasonably exceed the fee customarily charged for the same or
comparable goods or services in the community in which the prepaid
rental listing service operates.
10167.3.  (a) A separate application for a license as a prepaid
rental listing service shall be made in writing for each location to
be operated by a licensee other than a real estate broker.  Each
application shall be on forms provided by the department, shall be
signed by the applicant, and shall be accompanied by a one hundred
dollar ($100) application fee for the first location, and a
twenty-five dollar ($25) application fee for each additional location
of the applicant.
   Applications to add or eliminate locations during the term of a
license shall be on forms prescribed by the department.  A
twenty-five dollar ($25) application fee for the remainder of a
license term for each location to be added shall accompany the
application.
   (b) A real estate broker may provide a prepaid rental listing
service at a licensed office for the conduct of his or her real
estate brokerage business if the business at the office is conducted
under the immediate supervision of the broker or of a real estate
salesperson licensed to, and acting on behalf of, the broker.
10167.4.  The commissioner may require such proof as he or she may
deem advisable concerning the honesty and truthfulness of (a) any
applicant for a license as a prepaid rental listing service, (b) the
designated agents of the applicant, (c) the officers, directors, and
any persons owning 25 percent or more of the shares of any
corporation making such an application, or (d) any person owning or
controlling a beneficial ownership interest of 25 percent or more in
the entity making application before authorizing the issuance of a
license for a location.  For this purpose, the commissioner may hold
a hearing in accordance with Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code and
may refuse to issue a license to an applicant who does not furnish
satisfactory proof of his or her honesty and truthfulness or of the
honesty and truthfulness of the corporate officers, directors, and
shareholders.  To assist in this determination, the commissioner
shall require the fingerprinting of every original applicant
including designated agents, officers, directors, and persons owning
25 percent or more of the shares of the corporate applicant.
10167.5.  The business at a location licensed pursuant to
subdivision (a) of Section 10167.3 shall be conducted under the
immediate supervision of the licensee or a designated agent who is
not a designated agent at any other location.  Whenever a designated
agent ceases permanently to be a designated agent at any location
because of death, termination of employment, or any other reason, the
licensee, within five days thereafter, shall give written notice to
the department.  A license issued for a particular location shall
automatically expire 60 days after the time the business conducted at
such location ceases for any reason to be under the charge of and
managed by the designated agent of record with the department, unless
within such 60-day period the licensee submits written notice of the
new designated agent to the department.
   A designated agent of the licensed service may serve as designated
agent for the location in question as well as for the location for
which he or she is the designated agent of record during the period
of 60 days.
10167.6.  Every applicant for a prepaid rental listing service
license who is not a resident of this state shall file with the
application for a license an irrevocable consent that in any action
arising out of the activities of the prepaid rental listing service
commenced against him or her in this state, if personal service of
process upon him or her cannot be made in this state in the exercise
of due diligence, a valid service may be made upon him or her by
delivering the process to the Secretary of State.
   Insofar as possible, the provisions of Section 1018 of the Code of
Civil Procedure relating to service of process on the Secretary of
State are applicable to this section.
10167.7.  Except as provided in Section 10167.8, each licensee shall
provide to the department, and at all times maintain in force, a
bond in the amount of ten thousand dollars ($10,000) for each
location.  The bond may be in the form of a corporate surety bond, or
a cash deposit.  A cash deposit may be deposited by the licensee in
an interest-bearing account assigned to the commissioner, with
interest earned thereon payable to the licensee.  The bond or cash
deposit may be utilized by the commissioner for the benefit of any
unsatisfied judgment creditor in an action pursuant to subdivision
(e) of Section 10167.10.
10167.8.  The requirement of Section 10167.7 shall not apply to any
prepaid rental listing service operated by:  (a) a person exempt from
the payment of federal and state income taxes; (b) an agency of the
federal, state, or local government; or (c) a real estate broker
conducting a prepaid rental listing service pursuant to a real estate
license.
10167.9.  (a) Prior to the acceptance of a fee, a licensee shall
offer the prospective tenant a written contract, either on paper or
in electronic form, which shall include at least the following:
   (1) The name of the licensee and the addresses and telephone
numbers of the principal office or location of the licensee and of
the location, or branch office of a real estate broker, providing the
listing to the prospective tenant.
   (2) Acknowledgment of receipt of the fee, including the amount.
   (3) A description of the service to be performed by the licensee,
including significant conditions, restrictions, and limitations where
applicable.
   (4) The prospective tenant's specifications for the rental
property, including, but not limited to:
   (A) Type of structure, including, but not limited to, detached
single-family home, apartment, or duplex.
   (B) Location by commonly accepted residential area name, by
designation of boundary streets, or by any other manner affording a
reasonable means of identifying locations acceptable to the
prospective tenant.
   (C) Furnished or unfurnished.
   (D) Number of bedrooms required.
   (E) Maximum acceptable monthly rental.
   (5) The contract expiration date, which shall not be later than 90
days from the date of execution of the contract.
   (6) A clause setting forth the right to a full or partial refund
of the fee paid as provided in Section 10167.10.
   (7) The signature and printed full name of the licensee or of the
designated agent, real estate salesperson, or employee acting on
behalf of the licensee.  The signature of any person, including any
signature required by the terms of the contract to be provided by the
prospective tenant, may be provided in any electronic form that
provides a reasonable method of indicating that the individual whose
signature is required authorized the contract to be signed in that
electronic form.
   (8) A clause in bold type letters outlining the small claims court
remedy available to the prospective tenant.
   (9) A clause in boldface type letters clearly stating that the
purchase of any goods and services other than the provision of
listings of residential real properties for tenancy is optional.
   (b) (1) The original of each contract, any separate contracts for
required goods or services, refund claims, receipts and any other
relevant documents shall be retained by the licensee for a period of
not less than three years from the date of termination of the
contract during which time the contract shall be subject to
examination by a duly authorized representative of the commissioner.
Any records retained pursuant to this subdivision that are stored in
the ordinary course of business in digital media shall, upon request
of a duly authorized representative of the commissioner, be provided
on diskette, CD-ROM or similar portable digital storage medium.  For
purposes of this subdivision, the "original" of a contract executed
in electronic form shall be either the copy of the contract stored in
digital media or a paper printout of that contract.
   (2) Any licensee, or employee thereof, shall dispose of the
documents required to be kept pursuant to paragraph (1) by shredding
or other appropriate means so that the identity of the prospective
tenant may not be determined from the disposed information alone or
in combination with other publicly available information.
   (c) The form of contract proposed to be used by a licensee to
effect compliance with this section shall be filed with the
department prior to use.  Any modification of a form previously filed
with the department, including a change in the name or business
address of the licensee, shall also be filed prior to use.  The
department shall withhold the issuance or renewal of a license until
the department has approved the contract.  If a proposed modification
to a contract has not been approved or disapproved within 15 working
days of being filed with the department, the proposed modification
shall be deemed approved.  If a proposed modification or contract
provision is disapproved, the department shall communicate that
disapproval in writing to the licensee within 15 working days of
being filed with the department, accompanied by a written
justification of why the modification or contract provision is
contrary to the requirements of this article.
   (d) Notwithstanding any other provision of law, a contract for
prepaid rental listing services executed in electronic form, and
signed in any electronic form that provides a reasonable method of
indicating that the individual whose signature is required authorized
the contract to be signed in electronic form, shall be valid to the
same extent as an executed written contract.  Upon request by the
customer, the licensee shall deliver an executed paper copy to the
customer within five working days of receiving the request.
10167.10.  (a) (1) A licensee shall refund in full the fee paid by a
prospective tenant if the licensee does not, within five days after
execution of the contract, supply at least three rental properties
then available to the prospective tenant and meeting the
specifications of the contract, unless the prospective tenant obtains
a rental through the services of the licensee.
   (2) A licensee will be deemed to have supplied information meeting
the specifications of the prospective tenant if the information
supplied meets the contract specifications with reference to:  (i)
type of structure; (ii) designated area; (iii) furnished or
unfurnished; (iv) number of bedrooms; (v) maximum rental; and (vi)
any other specification expressly set forth in the contract.  A
demand for the return of the fee shall be made by or on behalf of the
prospective tenant within 10 days following the expiration of the
five-day period referred to above by delivery or by mailing by
registered or certified mail to the address of a location, or branch
office of a real estate broker, set forth in the contract.
   (b) (1) Except as provided in paragraph (3), a licensee shall
refund any fee paid over and above the sum of a fifty dollar ($50)
service charge to the prospective tenant if the prospective tenant
obtains a rental other than through the services of the licensee
during the term of the contract or does not obtain a rental, provided
that the prospective tenant demands a return of that part of the fee
within 10 days after the expiration of the contract.
   (2) The licensee shall refund any fee paid over and above the sum
of a fifty dollar ($50) service charge to the prospective tenant
within 10 days of receipt from the prospective tenant of either the
documentation specified in subparagraph (A) or the written statement
specified in subparagraph (B), as applicable:
   (A) Except as specified in subparagraph (B), a prospective tenant
demanding a refund shall provide to the licensee reasonable
documentation of the prospective tenant's new rental or of the fact
that the prospective tenant did not move, such as a lease, rental
agreement, or utility bill, with sufficient information to verify
that the new rental was not obtained through the services of the
licensee or that the prospective tenant did not move.
   (B) If the prospective tenant is unable to locate or provide the
documentation specified in subparagraph (A), the prospective tenant
may, at his or her option, fill out and sign a written statement,
supplied by the licensee, in the following form:
  I, ______________________________, do swear or affirm the
following:
      (name of prospective tenant)
  I currently live at _____________________________________________.
                                  (street address)
  The following statement is true (check one):
  ____ I have rented a unit at the above address.  I did not obtain
  this rental through the services of _____________________________
                                          (name of licensee)
  during the time of our contract.
  ____ I did not find a new rental and did not move.  I still live at
  the above address.
  I declare under penalty of perjury that the foregoing is true and
  correct to the best of my knowledge.
  _________________________________
               (date)
  _________________________________
             (location)
  _________________________________
            (signature)
   (3) On or after January 1, 2002, the department may, from time to
time, by regulation, adjust the amount of the allowable service
charge to reflect the rate of inflation from the previous date that
the amount of the allowable service charge was established, as
measured by the Consumer Price Index or other method of measuring the
rate of inflation which the department determines is reliable and
generally accepted.
   (c) Each contract shall contain provisions that shall read as
follows unless different language shall have been approved in writing
by the department prior to use:
      "RIGHT TO REFUND
(Full capital letters, in 12-point type or greater, boldface or
italicized)
   If, within five days after payment of a fee, the licensee has not
supplied the prospective tenant with at least three available rental
properties meeting the specifications of the contract as to (i) type
of structure; (ii) designated area; (iii) furnished or unfurnished;
(iv) number of bedrooms; (v) maximum rental; and (vi) any other
specification expressly set forth in the contract, the full amount of
the fee paid shall be refunded to the prospective tenant upon
presentation of evidence of that failure within 10 days after the
expiration of the five-day period.  The prospective tenant is not
entitled to a refund if the prospective tenant obtains a rental
through the services of the licensee.
   If the prospective tenant obtains a rental other than through the
services of the licensee during the term of this contract or if the
prospective tenant does not obtain a rental through the services of
the licensee during the term of the contract, the licensee shall
refund the fee received in excess of a (insert applicable limit
pursuant to subdivision (b) of Section 10167.10 of the Business and
Professions Code) service charge to the prospective tenant within 10
days after the prospective tenant supplies either (i) reasonable
documentation of the prospective tenant's new rental or of the fact
that the prospective tenant did not move, such as a lease, rental
agreement, or utility bill, with sufficient information to verify
that the new rental was not obtained through the services of the
licensee or that the prospective tenant did not move, or (ii) if the
prospective tenant is unable to locate or provide that documentation,
the prospective tenant may, at his or her option, fill out a written
form provided by the licensee and signed by the prospective tenant
under penalty of perjury stating that he or she did not obtain a
rental through the services of the licensee during the time of the
contract.
   To be entitled to a refund in excess of the service charge, the
prospective tenant must mail or deliver the demand for refund not
later than 10 days after expiration of this contract, and must supply
either (i) reasonable documentation of the prospective tenant's new
rental or of the fact that the prospective tenant did not move, such
as a lease, rental agreement, or utility bill, with sufficient
information to verify that the new rental was not obtained through
the services of the licensee or that the prospective tenant did not
move, or (ii) a written form provided by the licensee and signed by
the prospective tenant under penalty of perjury stating that he or
she did not obtain a rental through the services of the licensee
during the time of the contract.  The documentation may be supplied
after the demand for a refund is mailed or delivered, provided that
it is supplied within a reasonable time after it becomes available."
   (d) This section shall not apply to a person purchasing rental
information for a purpose other than that of locating a rental unit
for personal use or the use of a designated person.
   (e) If the licensee fails to make a refund as provided in this
section and if the denial or delay in making the refund is found to
have been done in bad faith, a court of appropriate jurisdiction,
including a small claims court, shall be empowered to award damages
to the plaintiff in an amount not to exceed one thousand dollars
($1,000) in addition to actual damages sustained by the plaintiff.
If the licensee refuses or is unable to pay the damages awarded by
the court, the award may be satisfied out of the security required
under Section 10167.7.
10167.11.  It shall be a violation of this article for any licensee
or any employee or agent of a licensee to do the following:
   (a) Make, or cause to be made, any false, misleading, or deceptive
advertisements or representations concerning the services that the
licensee will provide to prospective tenants.
   (b) Refer a property to a prospective tenant knowing or having
reason to know that:
   (1) The property does not exist or is unavailable for tenancy.
   (2) The property has been described or advertised by or on behalf
of the licensee in a false, misleading, or deceptive manner.
   (3) The licensee has not confirmed the availability of the
property for tenancy during the four-day period immediately preceding
dissemination of the listing information.  However, it shall not be
a violation to refer a property to a prospective tenant during a
period of from five to seven days after the most recent confirmation
of the availability of the property for rental if the licensee has
made a good faith effort to confirm availability within the stated
four-day period, and if the most recent date of confirmation of
availability is set forth in the referral.
   (4) The licensee has not obtained written or oral permission to
list the property from the property owner, manager, or other
authorized agent.
10167.12.  (a) The commissioner may suspend, deny, or revoke the
license of a licensee or the license of the licensee to operate at
one or more locations for either of the following:
   (1) A violation of this article by a licensee or by an employee or
agent, including a designated agent, of the licensee.
   (2) A conviction of a licensee, or a designated agent, or of an
officer, director, or owner of 25 percent or more of the shares of a
corporate licensee for a crime which is substantially related to the
qualifications, functions, or duties of a prepaid rental listing
service licensee.
   (b) For the purpose of determining whether grounds exist for
suspending, denying, or revoking the license of a licensee, the
commissioner shall hold a hearing in accordance with Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code.
10167.13.  A prepaid rental listing service license issued by the
department shall be for a period of two years.  An application and
fee for renewal filed with the department before midnight of the last
day of the period for which a previous license was issued entitles
the licensee to continue operating at all locations specified in the
previous license for which a renewal fee is paid.
10167.14.  Whenever any person has engaged or threatens to engage in
any acts or practices which constitute, or will constitute a
violation of a provision of  the article, the superior court of the
county in which the acts or practices have taken place, or are about
to take place, on complaint of the commissioner, the attorney
general, district attorney, or city attorney, may enjoin such acts or
practices by appropriate order.  The proceedings under this section
shall be governed by Chapter 3 (commencing with Section 525) of Title
7 of Part 2 of the Code of Civil Procedure, except that no
undertaking shall be required.
10167.15.  Any person, including an officer, director, or employee
of a corporation who willfully violates any provision of this article
is guilty of a misdemeanor.
10167.16.  A person or corporation licensed pursuant to this article
and not engaging in acts for which a real estate license is required
under Article 1 (commencing with Section 10130) of Chapter 3 of Part
1 of Division 4, shall be subject, in addition to the provisions of
this article, to the provisions of Chapter  1 (commencing with
Section 10000) and Chapter 2 (commencing with Section 10050) of Part
1 of Division 4, and to Sections 10450, 10452, 10453, and 10454.
10167.17.  The commissioner shall, by regulation, make prepaid
rental listing service licensees and applicants for prepaid rental
listing service licenses subject to the same provisions respecting
licensure as are applicable to real estate licenses under Sections
10151.5, 10156.5, 10156.6, 10156.7, 10200, and 10201.


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