CalBRE Warns Against Falsely Using ‘Short-Term’ Rental Exemption

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The California Bureau of Real Estate (CalBRE) is warning against unlicensed individuals performing property management services under the guise of the “short-term” residential rental exemption and is inviting the public to file complaints.

In a strongly worded alert sent to licensees, Wayne Bell, California Real Estate Commissioner with CalBRE, said it has come to the bureau’s attention that unlicensed individuals and real estate salespeople not properly associated with a licensed broker are circumventing the law to perform property management.

He provided an example of individuals improperly structuring paperwork and payments to make it appear that a rental is for under 30 days to meet the short term rental exemption, when it is really for more than 30 days.

He said real estate sales people can perform property management duties if their work is being supervised, overseen and directed by their real estate broker of record. He said this also means that there can be no “independent” real estate salesperson property managers if the services provided include any one or more of those acts and activities identified in section 10131 of the Business and Professions Code.

Bell said that property management in California is a regulated activity to the extent it involves any of the real estate licensed activities such as leasing or renting, offering to lease or rent, solicitations of listings of places to rent, solicitations of prospective tenants, collections of rents, and negotiations for leases.

The alert states that evasion and/or circumvention of the licensing laws is cause for administrative discipline by the Real Estate Commissioner. Furthermore, any person who, or entity which, is engaged in the unlicensed and unlawful practice of real estate in California may also be subject to criminal sanctions and punishment and CalBRE will refer appropriate cases to criminal prosecutors.

He wrote, “CalBRE will carefully investigate claims of exemption to ascertain their applicability and will consider any knowing or intentional attempt(s) to evade the Real Estate Law as ‘aggravation’ in any action brought by CalBRE.”

The full alert can be viewed here.

Complaints can be filed here.

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