Legal Question in Real Estate Law in California

Re: Brokering

A real estate broker within the meaning of California's laws is defined by statute. "[A] person who, for compensation, or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others...."

- "Sells or offers to sell, buys or offers to buy, solicits prospective sellers or purchasers of, solicits or obtains listings of, or negotiates the purchase, sale or exchange of real property or a business opportunity."

(Bus. & Prof. Code section 10131.)

This code section contains many other activities that are considered brokering.

I'm not sure I understand your second question. It appears that you are talking about assignment of a land sale contract, something that is rare these days.

Regarding your third question, it appears to be a "broker" activity. A broker is also any "person who engages as a principal in the business of buying from, selling to, or exchanging with the public, real property sales contracts or promissory notes secured directly or collaterally by liens on real property, or who makes agreements with the public for the collection of payments or for the performance of services in connection with real property sales contracts or promissory notes." (Bus. & Prof. Code sec. 10131.1.)

A valid real estate license is a condition precedent to the collection of compensation for any activities requiring a real estate salesperson or broker's license. No one can bring an action to collect a commission without proving that they were a broker at the time the activities were performed. (Bus. & Prof. Code sec. 10136.)

There are exceptions to the licensing requirement, which are too many to list here. I hope this answers some of your questions.

Very truly yours,

Re: Brokering

I agree with Mr. Roach on questions 1 and 3, and I would only add that many, many attempts to circumvent the broker licensing laws have been slapped down by the Department of Real Estate and the courts over the years, so that no one should assume they have discovered a trick way to earn a broker's commission in any way, shape, or form, without holding a license.

As to #2, the State of California doesn't really attempt to "define" the process of contract assignment California has a vast body of law, partly statutory, but largely judge-made, addressing the general subject of assignment of rights and assumption of duties under contracts. Some of these statutes and court rulings address the process of assignment, in that they discuss what must, may, or must not happen in order to have a valid assignment. A full discussion of the statutes and decisions would require somewhere between 1,000 and 10,000 pages of learned and technical discussion. There are some basic rules that law students are taught; this takes around three weeks of intensive drill in the contracts class in first year of law school. Most of us forget 99% of it in the month after taking the bar exam.