California Business and Professions Code. Division 4. Real Estate Part 1. Real Estate Regulations. Disciplinary Action 10175.   Upon grounds provided in this article and the other articles of this chapter, the License of any real estate Licensee may be revoked or suspended in accordance with the provisions of this part relating to hearings.   10175.2.   (a) If the Real Estate Commissioner determines that the public interest and public welfare will be adequately served by permitting a real estate Licensee to pay a monetary penalty to the department in lieu of an actual License suspension, the Commissioner may, on the petition of the Licensee, stay the execution of all or some part of the suspension on the condition that the Licensee pay a monetary penalty and the further condition that the Licensee incur no other cause for disciplinary action within a period of time specified by the Commissioner. (b) The Commissioner may exercise the discretion granted under subdivision (a) either with respect to a suspension ordered by a decision after a contested hearing on an accusation against the Licensee or by stipulation with the Licensee after the filing of an accusation, but prior to the rendering of a decision based upon the accusation. In either case, the terms and conditions of the disciplinary action against the Licensee shall be made part of a formal decision of the Commissioner. (c) If a Licensee fails to pay the monetary penalty in accordance with the terms and conditions of the decision of the Commissioner, the Commissioner may, without a hearing, order the immediate execution of all or any part of the stayed suspension in which event the Licensee shall not be entitled to any repayment nor credit, prorated or otherwise, for money paid to the department under the terms of the decision. (d) The amount of the monetary penalty payable under this section shall not exceed two hundred fifty dollars ($250) for each day of suspension stayed nor a total of ten thousand dollars ($10,000) per decision regardless of the number of days of suspension stayed under the decision. (e) Any monetary penalty received by the department pursuant to this section shall be credited to the Consumer Recovery Account of the Real Estate Fund. 10176. The Commissioner may, upon his or her own motion, and shall, upon the verified complaint in writing of any person, investigate the actions of any person engaged in the business or acting in the capacity of a real estate Licensee within this state, and he or she may temporarily suspend or permanently revoke a real estate License at any time where the Licensee, while a real estate Licensee, in performing or attempting to perform any of the acts within the scope of this chapter has been guilty of any of the following:   (a) Making any substantial misrepresentation. (b) Making any false promises of a character likely to influence, persuade, or induce. (c) A continued and flagrant course of misrepresentation or making of false promises through real estate Agents or salespersons. (d) Acting for more than one party in a transaction without the knowledge or consent of all parties thereto. (e) Commingling with his or her own money or property the money or other property of others which is received and held by him or her. (f) Claiming, demanding, or receiving a fee, compensation, or commission under any exclusive agreement authorizing or employing a Licensee to perform any acts set forth in Section 10131 for compensation or commission where the agreement does not contain a definite, specified date of final and complete termination. (g) The claiming or taking by a Licensee of any secret or undisclosed amount of compensation, commission, or profit or the failure of a Licensee to reveal to the employer of the Licensee the full amount of the Licensee's compensation, commission, or profit under any agreement authorizing or employing the Licensee to do any acts for which a License is required under this chapter for compensation or commission prior to or coincident with the signing of an agreement evidencing the meeting of the minds of the contracting parties, regardless of the form of the agreement, whether evidenced by documents in an Escrow or by any other or different procedure. (h) The use by a Licensee of any provision allowing the Licensee an option to purchase in an agreement authorizing or employing the Licensee to sell, buy, or exchange real estate or a business opportunity for compensation or commission, except when the Licensee prior to or coincident with election to exercise the option to purchase reveals in writing to the employer the full amount of the Licensee's profit and obtains the written consent of the employer approving the amount of the profit. (i) Any other conduct, whether of the same or a different character than specified in this section, which constitutes fraud or dishonest dealing. (j) Obtaining the signature of a prospective purchaser to an agreement which provides that the prospective purchaser shall either transact the purchasing, leasing, renting, or exchanging of a business opportunity property through the Broker obtaining the signature, or pay a compensation to the Broker if the property is purchased, leased, rented, or exchanged without the Broker first having obtained the written authorization of the owner of the property concerned to offer the property for sale, lease, exchange, or rent. (k) Failing to disburse funds in accordance with a commitment to make a Mortgage Loan that is accepted by the applicant when the real estate Broker represents to the applicant that the Broker is either of the following:   (1) The lender. (2) Authorized to issue the commitment on behalf of the lender or lenders in the Mortgage Loan transaction.   (l) Intentionally delaying the closing of a Mortgage Loan for the sole purpose of increasing interest, costs, fees, or charges payable by the borrower. (m) Violating any section, division, or article of law which provides that a violation of that section, division, or article of law by a Licensed person is a violation of that person's licensing law, if it occurs within the scope of that person's duties as a Licensee.   10176.1.   (a)   (1) Whenever the Commissioner takes any enforcement or disciplinary action against a Licensee, and the enforcement or disciplinary action is related to Escrow services provided pursuant to paragraph (4) of subdivision (a) of Section 17006 of the Financial Code, upon the action becoming final the Commissioner shall notify the Insurance Commissioner and the Commissioner of Corporations of the action or actions taken. The purpose of this notification is to alert the departments that enforcement or disciplinary action has been taken, if the Licensee seeks or obtains employment with entities regulated by the departments. (2) The Commissioner shall provide the Insurance Commissioner and the Commissioner of Corporations, in addition to the notification of the action taken, with a copy of the written accusation, statement of issues, or order issued or filed in the matter and, at the request of the Insurance Commissioner or the Commissioner of Corporations, with any underlying factual material relevant to the enforcement or disciplinary action. Any confidential information provided by the Commissioner to the Insurance Commissioner or the Commissioner of Corporations shall not be made public pursuant to this section. Notwithstanding any other provision of law, the disclosure of any underlying factual material to the Insurance Commissioner or the Commissioner of Corporations shall not operate as a waiver of confidentiality or any privilege that the Commissioner may assert.   (b) The Commissioner shall establish and maintain, on the Web site maintained by the DRE, a database of its Licensees, including those who have been subject to any enforcement or disciplinary action that triggers the notification requirements of this section. The database shall also contain a direct link to the databases, described in Section 17423.1 of the Financial Code and Section 12414.31 of the Insurance Code  and required to be maintained on the Web sites of the Department of Corporations and the Department of Insurance, respectively, of persons who have been subject to enforcement or disciplinary action for malfeasance or misconduct related to the Escrow industry by the Insurance Commissioner and the Commissioner of Corporations. (c) There shall be no Liability on the part of, and no cause of action of any nature shall arise against, the State of California, the DRE, the Real Estate Commissioner, any other state Agency, or any officer, Agent, employee, consultant, or contractor of the state, for the release of any false or unauthorized information pursuant to this section, unless the release of that information was done with knowledge and malice, or for the failure to release any information pursuant to this section.   10176.5.   (a) The Commissioner may, upon his or her own motion, and shall upon receiving a verified complaint in writing from any person, investigate an alleged violation of Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2 of the Civil Code by any real estate Licensee within this state. The Commissioner may suspend or revoke a Licensee's License if the Licensee acting under the License has willfully or repeatedly violated any of the provisions of Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2 of the Civil Code. (b) Notwithstanding any other provision of Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2 of the Civil Code, and in lieu of any other civil remedy, subdivision (a) of this section is the only remedy available for violations of Section 1102.6b of the Civil Code by any real estate Licensee within this state.   10177.   The Commissioner may suspend or revoke the License of a real estate Licensee, or may deny the issuance of a License to an applicant, who has done any of the following, or may suspend or revoke the License of a corporation, or deny the issuance of a License to a corporation, if an officer, director, or person owning or controlling 10 percent or more of the corporation's stock has done any of the following:   (a) Procured, or attempted to procure, a real estate License or License renewal, for himself or herself or a Salesperson, by fraud, misrepresentation, or deceit, or by making a material misstatement of fact in an application for a real estate License, License renewal, or reinstatement. (b) Entered a plea of guilty or nolo contendere to, or been found guilty of, or been convicted of, a felony, or a crime substantially related to the qualifications, functions, or duties of a real estate Licensee, and the time for appeal has elapsed or the judgment of conviction has been affirmed on appeal, irrespective of an order granting probation following that conviction, suspending the imposition of sentence, or of a subsequent order under Section 1203.4 of the Penal Code allowing that Licensee to withdraw his or her plea of guilty and to enter a plea of not guilty, or dismissing the accusation or information. (c) Knowingly authorized, directed, connived at, or aided in the publication, advertisement, distribution, or circulation of a material false statement or representation concerning his or her designation or certification of special education, credential, trade organization membership, or business, or concerning a business opportunity or a land or subdivision, as defined in Chapter 1 (commencing with Section 11000) of Part 2, offered for sale. (d) Willfully disregarded or violated the Real Estate Law (Part 1 (commencing with Section 10000)) or Chapter 1 (commencing with Section 11000) of Part 2 or the rules and regulations of the Commissioner for the administration and enforcement of the Real Estate Law and Chapter 1 (commencing with Section 11000) of Part 2. (e) Willfully used the term "realtor" or a trade name or insignia of membership in a real estate organization of which the Licensee is not a member. (f) Acted or conducted himself or herself in a manner that would have warranted the denial of his or her application for a real estate License, or has either had a License denied or had a License issued by another Agency of this state, another state, or the federal government revoked or suspended for acts that, if done by a real estate Licensee, would be grounds for the suspension or revocation of a California real estate License, if the action of denial, revocation, or suspension by the other Agency or entity was taken only after giving the Licensee or applicant fair notice of the charges, an opportunity for a hearing, and other due process protections comparable to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and only upon an express finding of a violation of law by the Agency or entity. (g) Demonstrated negligence or incompetence in performing an act for which he or she is required to hold a License. (h) As a Broker Licensee, failed to exercise reasonable supervision over the activities of his or her salespersons, or, as the officer designated by a corporate Broker Licensee, failed to exercise reasonable supervision and control of the activities of the corporation for which a real estate License is required. (i) Has used his or her employment by a governmental Agency in a capacity giving access to records, other than public records, in a manner that violates the confidential nature of the records. (j) Engaged in any other conduct, whether of the same or a different character than specified in this section, which constitutes fraud or dishonest dealing. (k) Violated any of the terms, conditions, restrictions, and limitations contained in an order granting a restricted License.   (l)   (1) Solicited or induced the sale, lease, or listing for sale or lease of residential property on the ground, wholly or in part, of loss of value, increase in crime, or decline of the quality of the schools due to the present or prospective entry into the neighborhood of a person or persons having a characteristic listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those characteristics are defined in Sections 12926 and 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).   (m) Violated the Franchise Investment Law (Division 5 (commencing with Section 31000) of Title 4 of the Corporations Code) or regulations of the Commissioner of Corporations pertaining thereto. (n) Violated the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code) or the regulations of the Commissioner of Corporations pertaining thereto. (o) Failed to disclose to the buyer of real property, in a transaction in which the Licensee is an Agent for the buyer, the nature and extent of a Licensee's direct or indirect ownership interest in that real property. The direct or indirect ownership interest in the property by a person related to the Licensee by blood or marriage, by an entity in which the Licensee has an ownership interest, or by any other person with whom the Licensee has a special relationship shall be disclosed to the buyer. (p) Violated Article 6 (commencing with Section 10237). (q) Violated or failed to comply with Chapter 2 (commencing with Section 2920) of Title 14 of Part 4 of Division 3 of the Civil Code, related to mortgages. If a real estate Broker that is a corporation has not done any of the foregoing acts, either directly or through its employees, Agents, officers, directors, or persons owning or controlling 10 percent or more of the corporation's stock, the Commissioner may not deny the issuance of a real estate License to, or suspend or revoke the real estate License of, the corporation, provided that any offending officer, director, or stockholder, who has done any of the foregoing acts individually and not on behalf of the corporation, has been completely disassociated from any affiliation or ownership in the corporation. This section shall become inoperative on July 1, 2012, and, as of January 1, 2013, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2013, deletes or extends the dates on which it becomes inoperative and is repealed.   10177.   The Commissioner may suspend or revoke the License of a real estate Licensee, delay the renewal of a License of a real estate Licensee, or deny the issuance of a License to an applicant, who has done any of the following, or may suspend or revoke the License of a corporation, delay the renewal of a License of a corporation, or deny the issuance of a License to a corporation, if an officer, director, or person owning or controlling 10 percent or more of the corporation's stock has done any of the following:   (a) Procured, or attempted to procure, a real estate License or License renewal, for himself or herself or a Salesperson, by fraud, misrepresentation, or deceit, or by making a material misstatement of fact in an application for a real estate License, License renewal, or reinstatement. (b) Entered a plea of guilty or nolo contendere to, or been found guilty of, or been convicted of, a felony, or a crime substantially related to the qualifications, functions, or duties of a real estate Licensee, and the time for appeal has elapsed or the judgment of conviction has been affirmed on appeal, irrespective of an order granting probation following that conviction, suspending the imposition of sentence, or of a subsequent order under Section 1203.4 of the Penal Code allowing that Licensee to withdraw his or her plea of guilty and to enter a plea of not guilty, or dismissing the accusation or information. (c) Knowingly authorized, directed, connived at, or aided in the publication, advertisement, distribution, or circulation of a material false statement or representation concerning his or her designation or certification of special education, credential, trade organization membership, or business, or concerning a business opportunity or a land or subdivision, as defined in Chapter 1 (commencing with Section 11000) of Part 2, offered for sale. (d) Willfully disregarded or violated the Real Estate Law (Part 1 (commencing with Section 10000)) or Chapter 1 (commencing with Section 11000) of Part 2 or the rules and regulations of the Commissioner for the administration and enforcement of the Real Estate Law and Chapter 1 (commencing with Section 11000) of Part 2. (e) Willfully used the term "realtor" or a trade name or insignia of membership in a real estate organization of which the Licensee is not a member. (f) Acted or conducted himself or herself in a manner that would have warranted the denial of his or her application for a real estate License, or either had a License denied or had a License issued by another Agency of this state, another state, or the federal government revoked or suspended for acts that, if done by a real estate Licensee, would be grounds for the suspension or revocation of a California real estate License, if the action of denial, revocation, or suspension by the other Agency or entity was taken only after giving the Licensee or applicant fair notice of the charges, an opportunity for a hearing, and other due process protections comparable to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and only upon an express finding of a violation of law by the Agency or entity. (g) Demonstrated negligence or incompetence in performing an act for which he or she is required to hold a License. (h) As a Broker Licensee, failed to exercise reasonable supervision over the activities of his or her salespersons, or, as the officer designated by a corporate Broker Licensee, failed to exercise reasonable supervision and control of the activities of the corporation for which a real estate License is required. (i) Used his or her employment by a governmental Agency in a capacity giving access to records, other than public records, in a manner that violates the confidential nature of the records. (j) Engaged in any other conduct, whether of the same or a different character than specified in this section, that constitutes fraud or dishonest dealing. (k) Violated any of the terms, conditions, restrictions, and limitations contained in an order granting a restricted License. (l)   (1) Solicited or induced the sale, lease, or listing for sale or lease of residential property on the ground, wholly or in part, of loss of value, increase in crime, or decline of the quality of the schools due to the present or prospective entry into the neighborhood of a person or persons having a characteristic listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those characteristics are defined in Sections 12926 and 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).   (m) Violated the Franchise Investment Law (Division 5 (commencing with Section 31000) of Title 4 of the Corporations Code) or regulations of the Commissioner of Corporations pertaining thereto. (n) Violated the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code) or the regulations of the Commissioner of Corporations pertaining thereto. (o) Failed to disclose to the buyer of real property, in a transaction in which the Licensee is an Agent for the buyer, the nature and extent of a Licensee's direct or indirect ownership interest in that real property. The direct or indirect ownership interest in the property by a person related to the Licensee by blood or marriage, by an entity in which the Licensee has an ownership interest, or by any other person with whom the Licensee has a special relationship shall be disclosed to the buyer. (p) Violated Article 6 (commencing with Section 10237). (q) Violated or failed to comply with Chapter 2 (commencing with Section 2920) of Title 14 of Part 4 of Division 3 of the Civil Code, related to mortgages. If a real estate Broker that is a corporation has not done any of the foregoing acts, either directly or through its employees, Agents, officers, directors, or persons owning or controlling 10 percent or more of the corporation's stock, the Commissioner may not deny the issuance or delay the renewal of a real estate License to, or suspend or revoke the real estate License of, the corporation, provided that any offending officer, director, or stockholder, who has done any of the foregoing acts individually and not on behalf of the corporation, has been completely disassociated from any affiliation or ownership in the corporation. A decision by the Commissioner to delay the renewal of a real estate License shall toll the expiration of that License until the results of any pending disciplinary actions against that Licensee are final, or until the Licensee voluntarily surrenders his, her, or its License, whichever is earlier. This section shall become operative on July 1, 2012.   10177.1.   The Commissioner may, without a hearing, suspend the License of any person who procured the issuance of the License to himself by fraud, misrepresentation, deceit, or by the making of any material misstatement of fact in his application for such License. The power of the Commissioner under this section to order a suspension of a License shall expire 90 days after the date of issuance of said License and the suspension itself shall remain in effect only until the effective date of a decision of the Commissioner after a hearing conducted pursuant to Section 10100 and the provisions of this section. A statement of issues as defined in Section 11504 of the Government Code shall be filed and served upon the respondent with the order of suspension. Service by certified or registered mail directed to the respondent's current address of record on file with the Commissioner shall be effective service. The respondent shall have 30 days after service of the order of suspension and statement of issues in which to file with the Commissioner a written request for hearing on the statement of issues filed against him. The Commissioner shall hold a hearing within 30 days after receipt of the request therefor unless the respondent shall request or agree to a continuance thereof. If a hearing is not commenced within 30 days after receipt of the request for hearing or on the date to which continued with the agreement of respondent, or if the decision of the Commissioner is not rendered within 30 days after completion of the hearing, the order of suspension shall be vacated and set aside. A hearing conducted under this section shall in all respects, except as otherwise expressly provided herein, conform to the substantive and procedural provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code applicable to a hearing on a statement of issues.   10177.2.   The Commissioner may, upon his or her own motion, and shall, upon the verified complaint in writing of any person, investigate the actions of any Licensee, and he or she may suspend or revoke a real estate License at any time where the Licensee in performing or attempting to perform any of the acts within the scope of Section 10131.6 has been guilty of any of the following acts:   (a) Has used a false or fictitious name, knowingly made any false statement, or knowingly concealed any material fact, in any application for the registration of a Mobile home, or otherwise committed a fraud in that application. (b) Failed to provide for the delivery of a properly endorsed certificate of ownership or certificate of title of a Mobile home from the seller to the buyer thereof. (c) Has knowingly participated in the purchase, sale, or other acquisition or disposal of a stolen Mobile home. (d) Has submitted a check, draft, or money order to the Department of Housing and Community Development for any obligation or fee due the state and it is thereafter dishonored or refused payment upon presentation.   10177.3.   (a) No Licensee shall knowingly or intentionally misrepresent the value of real property. (b) No Licensee that offers or provides an opinion of value of residential real property that is used as the basis for the origination of a Mortgage Loan shall have a prohibited interest in that property, within the meaning of Section 226.42(d) of Title 12 of the Code of Federal Regulations and the accompanying commentary contained in Volume 75 of the Federal Register, page 66554, dated October 28, 2010.   10177.4.   (a) Notwithstanding any other provision of law, the Commissioner may, after hearing in accordance with this part relating to hearings, suspend or revoke the License of a real estate Licensee who claims, demands, or receives a commission, fee, or other consideration, as compensation or inducement, for referral of customers to any Escrow Agent, structural pest control firm, home protection company, title insurer, controlled Escrow company, or underwritten title company. A Licensee may not be disciplined under any provision of this part for reporting to the Commissioner violations of this section by another Licensee, unless the Licensee making the report had guilty knowledge of, or committed or participated in, the violation of this section. (b) The term "other consideration" as used in this section does not include any of the following:   (1) Bona fide payments for goods or facilities actually furnished by a Licensee or for services actually performed by a Licensee, provided these payments are reasonably related to the value of the goods, facilities, or services furnished. (2) Furnishing of documents, services, information, advertising, educational materials, or items of a like nature that are customary in the real estate business and that relate to the product or services of the furnisher and that are available on a similar and essentially equal basis to all customers or the Agents of the customers of the furnisher. (3) Moderate expenses for food, meals, beverages, and similar items furnished to individual Licensees or groups or associations of Licensees within a context of customary business, educational, or promotional practices pertaining to the business of the furnisher. (4) Items of a character and magnitude similar to those in paragraphs (2) and (3) that are promotional of the furnisher's business customary in the real estate business, and available on a similar and essentially equal basis to all customers, or the Agents of the customers, of the furnisher.   (c) Nothing in this section shall relieve any Licensee of the obligation of disclosure otherwise required by this part.   10177.5.   When a final judgment is obtained in a civil action against any real estate Licensee upon grounds of fraud, misrepresentation, or deceit with reference to any transaction for which a License is required under this division, the Commissioner may, after hearing in accordance with the provisions of this part relating to hearings, suspend or revoke the License of such real estate Licensee.   10177.6.   When an Agent undertakes to arrange financing in connection with a sale, lease, or exchange of real property, or when a person or entity arranging financing in connection with the sale, lease, or exchange of real property undertakes to act as an Agent with respect to that property, that Agent, person, or entity shall, within 24 hours, make a written disclosure of those roles to all parties to the sale, lease, or exchange, and any related Loan transaction. For purposes of this section, "Agent" has the same meaning as defined in subdivision (a) of Section 2079.13 of the Civil Code.   10178.   When any real estate Salesman is discharged by his employer for a violation of any of the provisions of this article prescribing a ground for disciplinary action, a certified written statement of the facts with reference thereto shall be filed forthwith with the Commissioner by the employer and if the employer fails to notify the Commissioner as required by this section, the Commissioner may temporarily suspend or permanently revoke the real estate License of the employer, in accordance with the provisions of this part relating to hearings.   10179.   No violation of any of the provisions of this part relating to real estate or of Chapter 1 of Part 2 by any real estate Salesman or employee of any Licensed real estate Broker shall cause the revocation or suspension of the License of the employer of the Salesman or employee unless it appears upon a hearing by the Commissioner that the employer had guilty knowledge of such violation.   10180.   The Commissioner may deny, suspend or revoke the real estate License of a corporation as to any officer or Agent acting under its License without revoking the License of the corporation.   10182.   As a condition to the reinstatement of a revoked or suspended License, the Commissioner may require the applicant to take and pass a qualifying examination.   10185.   Any person, including officers, directors, Agents or employees of corporations, who willfully violates or knowingly participates in the violation of this division shall be guilty of a Misdemeanor punishable by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment in the county jail not exceeding six months, or by a fine and imprisonment.   10186.   (a) Following an administrative proceeding, or in connection with a stipulation, when the Commissioner grants the right to a License applicant or a Licensee to apply for or to obtain a restricted License or restricted Mortgage Loan originator License endorsement, the Commissioner may, in addition to any other terms and conditions placed upon the restricted Licensee, require the restricted Licensee to pay the monetary costs associated with monitoring the Licensed activities conducted by and pursuant to the restricted License or restricted Mortgage Loan originator License endorsement. (b) The Commissioner may also require, as a condition precedent to the issuance of a restricted License or restricted Mortgage Loan originator License endorsement, that the Licensee pay monetary restitution to any person who sustained damages by reason of the act or acts that led to the Discipline imposed by the Commissioner. (c) The Commissioner shall not renew a License or a Mortgage Loan originator License endorsement, and may deny an application for the removal of License restrictions or for the reinstatement of an unrestricted License, if the Licensee fails to pay all of the costs he or she is ordered to pay pursuant to this section. (d) The Commissioner shall not reinstate an unrestricted License or unrestricted Mortgage Loan originator License endorsement, or remove restrictions from a License or License endorsement, if the petitioner has failed to pay any costs he or she was ordered to pay pursuant to this section. (e) The Commissioner may require a holder of a restricted or revoked License, who petitions the Commissioner for reinstatement of his or her License pursuant to Section 11522 of the Government Code, to pay the reasonable costs of processing the petition request. (f) All costs recovered under this section shall be considered a reimbursement for costs incurred and shall be deposited in the Real Estate Fund to be available, notwithstanding Section 10451, upon appropriation by the Legislature.   10186.1.   (a) A License or an endorsement of the department shall be suspended automatically during any time that the Licensee is incarcerated after conviction of a felony, regardless of whether the conviction has been appealed. The department shall, immediately upon receipt of the certified copy of the record of conviction, determine whether the License or endorsement has been automatically suspended by virtue of the Licensee's incarceration, and if so, the duration of that suspension. The department shall notify the Licensee of the suspension and of his or her right to elect to have the issue of penalty heard as provided in subdivision (d). (b) If after a hearing before an Administrative law judge from the Office of Administrative Hearings it is determined that the felony for which the Licensee was convicted was substantially related to the qualifications, functions, or duties of a Licensee, the Commissioner upon receipt of the certified copy of the record of conviction, shall suspend the License or endorsement until the time for appeal has elapsed, if no appeal has been taken, or until the judgment of conviction has been affirmed on appeal or has otherwise become final, and until further order of the department. (c) Notwithstanding subdivision (b), a conviction of a charge of violating any federal statute or regulation or any statute or regulation of this state regulating dangerous drugs or controlled substances, or a conviction of Section 187, 261, 262, or 288 of the Penal Code, shall be conclusively presumed to be substantially related to the qualifications, functions, or duties of a Licensee and no hearing shall be held on this issue. However, upon its own motion or for good cause shown, the Commissioner may decline to impose or may set aside the suspension when it appears to be in the interest of justice to do so, with due regard to maintaining the integrity of, and confidence in, the practice regulated by the department. (d)   (1) Discipline may be ordered against a Licensee in accordance with the laws and regulations of the department when the time for appeal has elapsed, the judgment of conviction has been affirmed on appeal, or an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under Section 1203.4 of the Penal Code allowing the person to withdraw his or her plea of guilty and to enter a plea of not guilty, setting aside the verdict of guilty, or dismissing the accusation, complaint, information, or indictment. (2) The issue of penalty shall be heard by an Administrative law judge from the Office of Administrative Hearings. The hearing shall not be held until the judgment of conviction has become final or, irrespective of a subsequent order under Section 1203.4 of the Penal Code, an order granting probation has been made suspending the imposition of sentence, except that a Licensee may, at his or her option, elect to have the issue of penalty decided before those time periods have elapsed. Where the Licensee so elects, the issue of penalty shall be heard in the manner described in subdivision (b) at the hearing to determine whether the conviction was substantially related to the qualifications, functions, or duties of a Licensee. If the conviction of a Licensee who has made this election is overturned on appeal, any Discipline ordered pursuant to this section shall automatically cease. Nothing in this subdivision shall prohibit the department from pursuing disciplinary action based on any cause other than the overturned conviction.   (e) The record of the proceedings resulting in a conviction, including a transcript of the testimony in those proceedings, may be received in evidence. (f) Any other provision of law setting forth a procedure for the suspension or revocation of a License or endorsement issued by the department shall not apply to proceedings conducted pursuant to this section.   10186.2.   (a)   (1) A Licensee shall report any of the following to the department:   (a) The bringing of an indictment or information charging a felony against the Licensee. (b) The conviction of the Licensee, including any verdict of guilty, or plea of guilty or no contest, of any felony or Misdemeanor. (c) Any disciplinary action taken by another licensing entity or authority of this state or of another state or an Agency of the federal government.   (2) The report required by this subdivision shall be made in writing within 30 days of the date of the bringing of the indictment or the charging of a felony, the conviction, or the disciplinary action.   (b) Failure to make a report required by this section shall constitute a cause for Discipline.   10186.9.   Notwithstanding any other provision of law, on and after January 1, 2015, the department shall be subject to review by the appropriate policy committees of the Legislature.   10200.   All real estate License fees shall be payable in advance of issuing the licenses and at the time of filing the application. Unless otherwise provided, all licenses expire at midnight of the last day of the period for which issued.   10201.   The holder of a License who fails to renew it prior to the expiration of the period for which it was issued and who has otherwise qualified for such License, may renew it within two years from such expiration upon proper application and the payment of a late renewal fee in an amount equal to one and one-half times the regular renewal fee in effect at the time the License is reinstated.   10201.6.   Any person who has qualified in an examination for a real estate License shall file the required application and fee for the License within one year thereafter.   10202.   The definitions contained in this article are solely for the purposes of this article.   10207.   The amount of the real estate fees prescribed for an examination or for a License under this chapter is that fixed by the following provisions of this article. No part of any fee paid in accordance with the provisions of this chapter is refundable. It is deemed earned by the department upon its receipt.   10208.5.   The real estate Broker License examination fee is ninety-five dollars ($95). The real estate Broker License reexamination fee is ninety-five dollars ($95). If an applicant fails to appear for the examination within two years from the date of filing his or her application and fee for the examination, his or her application shall thereupon lapse and no further proceedings thereon shall be taken. This section shall remain in effect unless it is superseded pursuant to subdivision (a) of Section 10226.5.   10209.   (a) The Commissioner shall, by regulation, establish fees for applications for approval of equivalent courses of study as defined in Section 10153.5 in an amount sufficient to cover the cost of administration. The fee for an application for approval of each course given by a private vocational school, including any branch school which gives the same course, shall not exceed one hundred fifty dollars ($150). (b) The Commissioner shall notify every applicant of his decision on the application no later than 60 days after receipt by the Commissioner of a completed application. The application shall be on a form to be supplied by the Commissioner. 10209.2. The Commissioner shall, by regulation, establish fees for applications for approval of educational courses, seminars, workshops, conference, or their equivalent, or for the evaluation of petition based on a claim of equivalency, as authorized by Section 10170.4 in an amount sufficient to cover the cost of processing such applications or petitions. 10209.5. The fee for a restricted Broker License shall be the same as that for an unrestricted License as provided in Section 10210.   10210.   (a) The fee for a real estate Broker License shall not exceed three hundred dollars ($300). In the case of an original applicant, the fee is payable upon filing the real estate Broker License application. (b) If an applicant fails to pass the real estate Broker License examination within two years from the date of filing his or her Broker License application, his or her Broker License application shall lapse and no further proceedings thereon shall be taken. (c) This section shall remain in effect unless it is superseded pursuant to Section 10226 or subdivision (a) of Section 10226.5, whichever is applicable.   10211.   If the Licensee is a corporation, the License issued to it entitles one officer thereof, on behalf of the corporation, to engage in the business of real estate Broker without the payment of any further fee, such officer to be designated in the application of the corporation for a License. For each officer other than the officer so designated, through whom it engages in the business of real estate Broker, the appropriate original or renewal fee is to be paid in addition to the fee paid by the corporation.   10213.5.   The real estate Salesperson License examination fee is sixty dollars ($60). The real estate Salesperson License reexamination fee is sixty dollars ($60). If an applicant fails to appear for the examination within two years from the date of filing his or her application and fee for the examination, his or her application shall thereupon lapse and no further proceedings thereon shall be taken. This section shall remain in effect unless it is superseded pursuant to subdivision (a) of Section 10226.5.   10213.6.   If an applicant for any examination fails to take the examination on the date scheduled, he or she may make application in writing to the Principal office of the department in Sacramento for a new date. A fee of twenty dollars ($20) shall accompany the written request for applying for the first new examination date in the case of a Broker applicant, and a fee of fifteen dollars ($15) shall accompany the written request for the first new examination date in the case of a Salesperson applicant. A fee of thirty dollars ($30) shall accompany the written request for all subsequent new examination dates for both Broker and Salesperson applicants. This section shall remain in effect unless it is superseded pursuant to subdivision (a) of Section 10226.5.   10214.5.   The fee for a restricted Salesperson License shall be the same as that for an unrestricted License as provided in Section 10215.   10215.   (a) The fee for a real estate Salesperson License shall not exceed two hundred forty-five dollars ($245), except that for an applicant qualifying pursuant to Section 10153.4 who has not satisfied all of the educational requirements prior to issuance of the License, the fee shall not exceed two hundred seventy-five dollars ($275). In the case of an original applicant, the fee is payable upon filing the real estate Salesperson License application. (b) If an applicant fails to pass the real estate Salesperson License examination within two years from the date of filing his or her Salesperson License application, his or her Salesperson License application shall lapse and no further proceedings thereon shall be taken. (c) This section shall remain in effect unless it is superseded pursuant to Section 10226 or subdivision (a) of Section 10226.5, whichever is applicable.   10222.   For any examination required under any order issued pursuant to the provisions of the Administrative Procedure Act, the fee shall be the same as for a Salesperson or Broker License examination, as appropriate. 10225. An application for a permit to sell real property securities secured by Liens on real property situated outside the State of California shall be accompanied by the filing fee together with an amount equivalent to twenty-five cents ($0.25) a mile for each mile going and returning, or where public transportation is available the actual round trip fare pertaining thereto, estimated by the Commissioner to be traveled from the office of the DRE where the application is filed to the location of the property, and the amount estimated to be necessary to cover the expense of the inspection and appraisal of the property, not to exceed seventy-five dollars ($75) a day for each day actually spent in the inspection and appraisal of the property or properties.   10226.   (a) The Commissioner may periodically by regulation prescribe fees lower than the maximum fees provided in Sections 10209.5, 10210, 10214.5, 10215, and 10250.3 whenever he or she determines those lower fees are sufficient to offset the costs and expenses incurred in the administration of Part 1 (commencing with Section 10000) of this division. The Commissioner shall hold at least one regulation hearing each calendar year, to determine if lower fees should be prescribed. (b) If, as of June 30 of any fiscal year, the balance of funds in the Real Estate Fund exceeds an amount equal to 150 percent of the department's authorized budget for the following year, then within 30 days thereafter the Commissioner shall, notwithstanding the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), issue regulations reducing real estate License and subdivision fees so that as of June 30 of the next fiscal year the balance of funds in the Real Estate Fund shall not exceed an amount equal to 150 percent of the department's authorized budget for that year. (c) If the Commissioner fails to reduce these fees within the timeframe specified in subdivision (b), then fees shall automatically be reduced to the levels as indicated in subdivision (b) of Section 10226.5. That reduction shall be effective no later than September 1 of the fiscal year wherein the Commissioner is obliged to issue regulations pursuant to subdivision (b).   10226.5.   (a) If at any time funds are transferred or loaned from the Real Estate Fund to the General Fund by the Budget Act, then 30 days from and after the date of the transfer or Loan, fees shall be reduced as indicated in subdivision (b), irrespective of any provisions of the Budget Act precluding that reduction. (b) Fees shall be reduced pursuant to paragraph (a) to the following maximum amounts:   (1) Real estate Broker examination or reexamination: Fifty dollars ($50). (2) First reschedule of Broker examination: Fifteen dollars ($15); subsequent reschedules: Twenty-five dollars ($25). (3) Real estate Broker License, original or renewal: One hundred sixty-five dollars ($165). (4) Real estate Salesperson examination or reexamination: Twenty-five dollars ($25). (5) First reschedule of Salesperson examination: Ten dollars ($10); subsequent reschedules: Twenty-five dollars ($25). (6) Real estate Salesperson License, original or renewal: One hundred twenty dollars ($120). (7) Real estate Salesperson License without all educational requirements: One hundred forty-five dollars ($145). (8) A notice of intention without a completed questionnaire: One hundred fifty dollars ($150). (9) An original public report for subdivision interests described in Section 11004.5: One thousand six hundred dollars ($1,600) plus ten dollars ($10) for each subdivision interest to be offered. (10) An original public report for subdivision interests other than those described in Section 11004.5: Five hundred dollars ($500) plus ten dollars ($10) for each interest to be offered. (11) A conditional public report for subdivision interests described in Section 11004.5: Five hundred dollars ($500). (12) A conditional public report for subdivision interests other than those described in Section 11004.5: Five hundred dollars ($500). (13) A preliminary public report for subdivision interests described in Section 11004.5: Five hundred dollars ($500). (14) A preliminary public report for subdivision interests other than those described in Section 11004.5: Five hundred dollars ($500). (15) A renewal public report for subdivision interests described in Section 11004.5: Five hundred dollars ($500). (16) A renewal public report for subdivision interests other than those described in Section 11004.5: Five hundred dollars ($500). (17) An amended public report for subdivision interests described in Section 11004.5: Three hundred dollars ($300) plus ten dollars ($10) for each subdivision interest to be offered under the amended public report for which a fee has not previously been paid. (18) An amended public report to offer subdivision interests other than those described in Section 11004.5: Three hundred dollars ($300) plus ten dollars ($10) for each subdivision interest to be offered under the amended public report for which a fee has not previously been paid. (19) An application for an original, renewal, or amended registration as required by Section 10249: One hundred dollars ($100). (20) The filing fee for an application for a permit to be issued pursuant to Article 8.5 (commencing with Section 10250) for each subdivision or phase of the subdivision in which interests are to be offered for sale or lease shall be as follows:   (a) One thousand six hundred dollars ($1,600) plus ten dollars ($10) for each subdivision interest to be offered for an original permit application. (b) Five hundred dollars ($500) plus ten dollars ($10) for each subdivision interest to be offered that was not permitted to be offered under the permit to be renewed for a renewal permit application. (c) Three hundred dollars ($300) plus ten dollars ($10) for each subdivision interest to be offered under the amended permit for which a fee has not previously been paid for an amended permit application. (d) Five hundred dollars ($500) for a conditional permit application.   10230.   (a) The provisions of this article do not apply to the negotiation of a Loan by or on behalf of a real estate Broker in connection with a qualifying sale or exchange of real property in which the Broker acted as the Agent of one or more of the parties to the sale or exchange, nor to the sale or exchange by or on behalf of the Broker of a promissory note created for the purpose of financing a qualifying real property sale or exchange transaction in which the Broker acted as the Agent of one or more of the parties to the qualifying real property sale or exchange regardless of the time of the sale or exchange of the promissory note. For the purposes of this subdivision, a "qualifying" sale or exchange of real property is one that is subject to the requirements of Article 3 (commencing with Section 2956) of Chapter 2 of Title 14 of Part 4 of Division 3 of the Civil Code.   (b) subdivision (a) shall not apply to the negotiation of Loans nor to sales or exchanges of promissory notes in connection with the financing of a real property sale or exchange transaction in which the Broker had a direct or indirect monetary interest as a party. 10231. Except as authorized by permit issued pursuant to the applicable provisions of the Corporate Securities Law of 1968 (Section 25000 et seq. of the Corporations Code), no person in doing any of the acts set forth in subdivision (d) of Section 10131, subdivision (e) of Section 10131, and Section 10131.1 shall accept any purchase or Loan funds or other consideration from a prospective purchaser or lender, or directly or indirectly cause such funds or other consideration to be deposited in an Escrow except as to a specific Loan or a specific real property sales contract or promissory note secured directly or collaterally by a Lien on real property on which Loan, contract or note the person has a Bona fide authorization to negotiate or to sell or which has been bought and completely paid for by the Licensee, or has an unconditional written contract which obligates him to purchase a specific real property sales contract or promissory note secured directly or collaterally by a deed of Trust.   10231.1.   No person in doing any of the acts set forth in subdivision (d) of Section 10131, subdivision (e) of Section 10131, and Section 10131.1 shall, as Agent or Principal, retain funds payable according to the terms of a promissory note or real property sales contract secured directly or collaterally by a Lien on real property, for a period longer than 25 days, except pursuant to a written agreement with the purchaser or lender.   10231.2.   (a) A real estate Broker who, through express or implied representations that the Broker or any Salesperson acting on the Broker's behalf is engaging in acts for which a real estate License is required by subdivision (d) or (e) of Section 10131, proposes to solicit and accept funds, or to cause the solicitation and acceptance of funds, to be applied to a purchase or Loan transaction in which the Broker will directly or indirectly obtain the use or benefit of the funds other than for commissions, fees, and costs and expenses as provided by law for the Broker's services as an Agent, shall, prior to the making of any representation, solicitation, or presentation of the statement described in subdivision (b), submit the following to the DRE:   (1) A true copy of the statement described in subdivision (b) complete except for the signature of the prospective lender or purchaser. (2) A statement that the submittal is being made to the department pursuant to Section 10231.2.   (b) A Broker making a solicitation pursuant to subdivision (a) shall deliver, or cause to be delivered, to the person solicited, the applicable completed statement described in Section 10232.5 not less than 24 hours before the earlier of the acceptance of any funds from that person by or on behalf of the Broker or the execution of any instrument obligating the person to make the Loan or purchase. The statement shall be signed by the prospective lender or purchaser and by the real estate Broker or, on the Broker's behalf, by a real estate Salesperson Licensed to the Broker. When so executed, an exact copy of the executed statement shall be given to the prospective lender or purchaser, and the Broker shall retain a true copy of the executed statement for a period of four years.   (c) None of the provisions of subdivision (a) or (b) shall apply in the case of an offering of a security authorized pursuant to applicable provisions of the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000 of Title 4 of the Corporations Code). (d) In the case of a solicitation by a corporate real estate Broker, the provisions of subdivisions (a) and (b) shall apply if the funds solicited are intended for the direct or indirect use or benefit of an officer or director of the corporation or of a person with a 10 percent or greater ownership interest in the corporation.   10232.   (a) Except as otherwise expressly provided, Sections 10232.2, 10232.25, 10233, and 10236.6 are applicable to every real estate Broker who intends or reasonably expects in a successive 12 months to do any of the following:   (1) Negotiate a combination of 10 or more of the following transactions pursuant to subdivision (d) or (e) of Section 10131 or Section 10131.1 in an aggregate amount of more than one million dollars ($1,000,000):   (a) Loans secured directly or collaterally by Liens on real property or on business opportunities as Agent for another or others. (b) Sales or exchanges of real property sales contracts or promissory notes secured directly or collaterally by Liens on real property or on business opportunities as Agent for another or others. (c) Sales or exchanges of real property sales contracts or promissory notes secured directly or collaterally by Liens on real property as the owner of those notes or contracts.   (2) Make collections of payments in an aggregate amount of two hundred fifty thousand dollars ($250,000) or more on behalf of owners of promissory notes secured directly or collaterally by Liens on real property, owners of real property sales contracts, or both. (3) Make collections of payments in an aggregate amount of two hundred fifty thousand dollars ($250,000) or more on behalf of obligors of promissory notes secured directly or collaterally by Liens on real property, lenders of real property sales contracts, or both. Persons under common management, direction, or control in conducting the activities enumerated above shall be considered as one person for the purpose of applying the above criteria.   (b) The negotiation of a combination of two or more new Loans and sales or exchanges of existing promissory notes and real property sales contracts of an aggregate amount of more than two hundred fifty thousand dollars ($250,000) in any three successive months or a combination of five or more new Loans and sales or exchanges of existing promissory notes and real property sales contracts of an aggregate amount of more than five hundred thousand dollars ($500,000) in any successive six months shall create a rebuttable presumption that the Broker intends to negotiate new Loans and sales and exchanges of an aggregate amount that will meet the criteria of subdivision (a).   (c) In determining the applicability of Sections 10232.2, 10232.25, 10233, and 10236.6, Loans or sales negotiated by a Broker, or for which a Broker collects payments or provides other servicing for the owner of the note or contract, shall not be counted in determining whether the Broker meets the criteria of subdivisions (a) and (b) if any of the following apply:   (1) The lender or purchaser is any of the following:   (a) The Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration, and the United States Department of Veterans Affairs. (b) A bank or subsidiary thereof, bank holding company or subsidiary thereof, Trust company, savings bank or savings and Loan association or subsidiary thereof, savings bank or savings association holding company or subsidiary thereof, credit union, industrial bank or industrial Loan company, finance lender, or insurer doing business under the authority of, and in accordance with, the laws of this state, any other state, or the United States relating to banks, Trust companies, savings banks or savings associations, credit unions, industrial banks or industrial Loan companies, commercial finance lenders, or insurers, as evidenced by a License, certificate, or charter issued by the United States or a state, district, territory, or commonwealth of the United States. (c) Trustees of a pension, profit-sharing, or welfare fund, if the pension, profit-sharing, or welfare fund has a net worth of not less than fifteen million dollars ($15,000,000). (d) A corporation with outstanding securities registered under Section 12 of the Securities Exchange Act of 1934 or a wholly owned subsidiary of that corporation. (e) A syndication or other combination of any of the entities specified in subparagraph (a), (b), (c), or (d) that is organized to purchase the promissory note. (f) The California Housing Finance Agency or a local housing finance Agency organized under the Health and Safety Code. (g) A Licensed residential mortgage lender or servicer acting under the authority of that License. (h) An institutional investor that issues mortgage-backed securities, as specified in paragraph (11) of subdivision (i) of Section 50003 of the Financial Code. (I) A Licensed real estate Broker selling all or part of the Loan, the note, or the contract to a lender or purchaser specified in subparagraphs (a) to (H), inclusive.   (2) The Loan or sale is negotiated, or the Loan or contract is being serviced for the owner, under authority of a permit issued pursuant to applicable provisions of the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code). (3) The transaction is subject to the requirements of Article 3 (commencing with Section 2956) of Chapter 2 of Title 14 of Part 4 of Division 3 of the Civil Code.   (d) If two or more real estate brokers who are not under common management, direction, or control cooperate in the negotiation of a Loan or the sale or exchange of a promissory note or real property sales contract and share in the compensation for their services, the dollar amount of the transaction shall be allocated according to the ratio that the compensation received by each Broker bears to the total compensation received by all brokers for their services in negotiating the Loan or sale or exchange. (e) A real estate Broker who meets any of the criteria of subdivision (a) or (b) shall notify the department in writing within 30 days after that determination is made.   10232.1.   (a) A real estate Broker, prior to the use of any proposed advertisement in connection with the conduct of activities described in subdivisions (d) and (e) of Section 10131 and Section 10131.1, may submit a true copy thereof to the DRE for approval. The submission shall be accompanied by a fee of not more than forty dollars ($40). The Commissioner shall by regulation prescribe the amount of the fee. If disapproval of the proposed advertisement is not communicated by the department to the Broker within 15 calendar days after receipt of the copy of the proposed advertisement by the department, the proposed advertisement shall be deemed approved, but the department shall not be precluded from disapproving a later publication or other use of the same or similar advertising. The Commissioner shall adopt regulations pertaining to the submittal and clearance of that advertising and establishing criteria for approval to ensure that the public will be protected against false or misleading representations. Except as provided in subdivision (b), "advertisement" includes dissemination in any newspaper, circular, form letter, brochure or similar publication, display, sign, radio broadcast or telecast, which concerns   (1) the use, terms, rates, conditions, or the amount of any Loan or sale referred to in subdivisions (d) and (e) of Section 10131 or Section 10131.1 or (2) the security, solvency, or stability of any person carrying on the activities described in those sections.   (b) "Advertisement" does not include a letter or brochure that meets both of the following criteria:   (1) It is restricted in distribution to other real estate brokers and to persons for whom the Broker has previously acted as an Agent in arranging a Loan secured by real property or in the purchase, sale, or exchange of a deed of Trust or real property sales contract. (2) It is restricted in content to the identification and a description of the terms of Loans, mortgages, deeds of Trust, real property sales contracts, or any combination thereof offered for funding or purchase through the Broker as Agent.   (c) subdivision (a) is not applicable to advertising that is used exclusively in connection with an offering authorized by permit issued pursuant to the applicable provisions of the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000 of Title 4 of the Corporations Code). (d) All advertising approvals shall be for a period of five years after the date of approval. The approval period applies to all advertising, including that which was previously submitted on a mandatory basis.   10232.2.   A real estate Broker who meets the criteria of subdivision (a) of Section 10232 shall annually file the reports referred to in subdivisions (a) and (c) with the DRE within 90 days after the end of the Broker's fiscal year or within any additional time as the Real Estate Commissioner may allow for filing for good cause:   (a) The report of a review by a Licensed California independent public accountant of Trust fund financial statements, conducted in accordance with generally accepted accounting practices, which shall include within its scope the following information for the fiscal year relative to the business activities of the Broker described in subdivisions (d) and (e) of Section 10131:   (1) The receipt and disposition of all funds of others to be applied to the making of Loans and the purchasing of promissory notes or real property sales contracts. (2) The receipt and disposition of all funds of others in connection with the servicing by the Broker of the accounts of owners of promissory notes and real property sales contracts including installment payments and Loan or contract payoffs by obligors. (3) A statement as of the end of the fiscal year which shall include an itemized Trust fund accounting of the Broker and confirmation that the Trust funds are on deposit in an account or accounts maintained by the Broker in a financial institution.   (b) A Broker who meets the criteria of Section 10232, but who, in carrying on the activities described in subdivisions (d) and (e) of Section 10131, has not during a fiscal year, accepted for the benefit of a person to whom the Broker is a trustee, any payment or remittance in a form convertible to cash by the Broker, need not comply with the provisions of subdivision (a). In lieu thereof, the Broker shall submit to the Commissioner within 30 days after the end of the Broker's fiscal year or, within any additional time as the Commissioner may allow for a filing for good cause, a notarized statement under penalty of perjury on a form provided by the department attesting to the fact that the Broker did not receive any Trust funds in cash or convertible to cash during the fiscal year. (c) A report of all of the following aspects of the business conducted by the Broker while engaging in activities described in subdivisions (d) and (e) of Section 10131 and in Section 10131.1:   (1) Number and aggregate dollar amount of Loan, Trust deed sales and real property sales contract transactions negotiated. (2) Number and aggregate dollar amount of promissory notes and contracts serviced by the Broker or an affiliate of the Broker. (3) Number and aggregate dollar amount of late payment charges, prepayment penalties and other fees or charges collected and retained by the Broker under servicing agreements with beneficiaries and obligees. (4) Default and foreclosure experience in connection with promissory notes and contracts subject to servicing agreements between the Broker and beneficiaries or obligees. (5) Commissions received by the Broker for services performed as Agent in negotiating Loans and sales of promissory notes and real property sales contracts. (6) Aggregate costs and expenses as referred to in Section 10241 paid by borrowers to the Broker.   (d) The Commissioner shall adopt regulations prescribing the form and content of the report referred to in subdivision (c) with appropriate categories to afford a better understanding of the business conducted by the Broker. (e) If the Broker fails to file either of the reports required under subdivisions (a) and (c) within the time permitted herein, the Commissioner may cause an examination and report to be made and may charge the Broker one and one-half times the cost of making the examination and report. In determining the hourly cost incurred by the Commissioner for conducting an examination and preparing the report, the Commissioner may use the estimated average hourly cost for all department audit staff performing audits of real estate brokers. If a Broker fails to pay the above amount within 60 days of the mailing of a notice of billing, the Commissioner may suspend the Broker's License or deny renewal of the Broker's License. The suspension or denial shall remain in effect until the above amount is paid or the Broker's right to renew a License has expired. The Commissioner may maintain an action for the recovery of the above amount in any court of competent jurisdiction. (f) The reports referred to in subdivisions (a) and (c) are exempted from any requirement of public disclosure by paragraph (2) of subdivision (d) of Section 6254 of the Government Code. The Commissioner shall annually make and file as a public record, a composite of the annual reports and any comments thereon which are deemed to be in the public interest.   10232.25.   (a) A real estate Broker who meets the criteria of subdivision (a) of Section 10232 shall, within 30 days after the end of each of the first three fiscal quarters of the Broker's fiscal year, or within any additional time as the Real Estate Commissioner may allow for good cause, file with the Commissioner a Trust funds status report as of the last day of the fiscal quarter which shall include the following:   (1) A representation that the form and content of the Trust account records of the Broker are in compliance with the regulations of the Commissioner. (2) A representation that the Broker's Trust fund bank account is maintained in compliance with the regulations of the Commissioner. (3) A statement of the Broker's aggregate accountability for Trust funds. (4) A report of Trust funds in the Broker's custody consisting of the Trust account bank statements as of the bank's accounting date immediately preceding the end of the fiscal quarter and a schedule of withdrawals and deposits adjusting the account to its true balance as of the end of the fiscal quarter. (5) A statement explaining any difference in amount between the Broker's total accountability under paragraph (3) above and the adjusted Trust account bank balance under paragraph (4) above.   (b) Each report made pursuant to subdivision (a) shall include the following:   (1) The name, address, and position or capacity of the person who prepared the report. (2) A declaration under penalty of perjury by the Broker that the information and representations in the report are true, complete, and correct to the best of the Broker's knowledge and belief. The declaration in a report submitted on behalf of a corporate Broker shall be signed by a Broker-officer through whom the corporation is Licensed as a real estate Broker and by the chief executive officer of the corporation if he or she is not the signing Broker-officer.   (c) If a Broker fails to file a report required under subdivision (a) within the time permitted, the Commissioner may cause an examination and report to be made and may charge the Broker one and one-half times the cost of making the examination and report. In determining the hourly cost incurred by the Commissioner for conducting an examination and preparing the report, the Commissioner may use the estimated average hourly cost for all department audit staff performing audits of real estate brokers. If a Broker fails to pay the above amount within 60 days of the mailing of a notice of billing, the Commissioner may suspend the Broker's License or deny renewal of the Broker's License. The suspension or denial shall remain in effect until the above amount is paid or the Broker's right to renew a License has expired. The Commissioner may maintain an action for the recovery of the above amount in any court of competent jurisdiction. (d) A Broker who meets the criteria of Section 10232, but who, in carrying on the activities described in subdivisions (d) and (e) of Section 10131, did not during a fiscal quarter, accept for the benefit of a person to whom the Broker is trustee, any payment or remittance in a form convertible to cash by the Broker, need not comply with the provisions of subdivision (a). In lieu thereof, the Broker shall submit to the Commissioner within 30 days after the end of the fiscal quarter or within any additional time as the Commissioner may allow for good cause, a statement under penalty of perjury on a form provided by the department attesting to the fact that the Broker did not receive any Trust funds in cash or convertible to cash during the fiscal quarter. (e) Any real estate Broker who engages in any of the activities specified in subdivision (d) or (e) of Section 10131, but who is not required by this section to file Trust funds status reports with the Commissioner and who is not exempt therefrom under subdivision (d), shall complete Trust funds status reports in accordance with either   (1) the requirements of subdivisions (a) and (b) applicable to Trust funds status reports filed with the Commissioner, or (2) the requirements established by the lender or note owner, if the lender or note owner does all of the following:   (i) requires monthly reconciliations of Trust account balances; (ii) requires annual, CPA-audited financial statements; and (iii) maintains a contractual right to audit the Trust accounts held by the Broker on behalf of the lender or note owner.   The Broker shall retain all Trust funds status reports prepared under this subdivision on file at the Broker's offices, where they shall be subject to inspection by representatives of the Commissioner upon 24 hours' notice.   10232.4.   (a) In making a solicitation to a particular person and in negotiating with that person to make a Loan secured by real property or to purchase a real property sales contract or a note secured by a deed of Trust, a real estate Broker shall deliver to the person solicited the applicable completed statement described in Section 10232.5 as early as practicable before he or she becomes obligated to make the Loan or purchase and, except as provided in subdivision (c), before the receipt by or on behalf of the Broker of any funds from that person. The statement shall be signed by the prospective lender or purchaser and by the real estate Broker, or by a real estate Salesperson Licensed to the Broker, on the Broker's behalf. When so executed, an exact copy shall be given to the prospective lender or purchaser, and the Broker shall retain a true copy of the executed statement for a period of three years. (b) The requirement of delivery of a disclosure statement pursuant to subdivision (a) shall not apply with respect to the following persons:   (1) The prospective purchaser of a security offered under authority of a permit issued pursuant to applicable provisions of the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code) that require that each prospective purchaser of a security be given a prospectus or other form of disclosure statement approved by the department issuing the permit. (2) The seller of real property who agrees to take back a promissory note of the purchaser as a method of financing all or a part of the purchase of the property. (3) The prospective purchaser of a security offered pursuant to and in accordance with a regulation duly adopted by the Commissioner of Corporations granting an exemption from qualification under the Corporate Securities Law of 1968 for the offering if one of the conditions of the exemption is that each prospective purchaser of the security be given a disclosure statement prescribed by the regulation before the prospective purchaser becomes obligated to purchase the security. (4) A prospective lender or purchaser, if that lender or purchaser is any of the following:   (a) The United States or any state, district, territory, or commonwealth thereof, or any city, county, city and county, public district, public authority, public corporation, public entity, or political subdivision of a state, district, territory, or commonwealth of the United States, or any Agency or corporate or other instrumentality of any one or more of the foregoing, including the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration, and the Veteran's Administration. (b) Any bank or subsidiary thereof, bank holding company or subsidiary thereof, Trust company, savings bank or savings and Loan association or subsidiary thereof, savings bank or savings association holding company or subsidiary thereof, credit union, industrial bank or industrial Loan company, finance lender, or Insurance company doing business under the authority of, and in accordance with, the laws of this state, any other state, or of the United States relating to banks, Trust companies, savings banks or savings associations, credit unions, industrial banks or industrial Loan companies, commercial finance lenders, or Insurance companies, as evidenced by a License, certificate, or charter issued by the United States or any state, district, territory, or commonwealth of the United States. (c) Trustees of pension, profitsharing, or welfare fund, if the pension, profitsharing, or welfare fund has a net worth of not less than fifteen million dollars ($15,000,000). (d) Any corporation with outstanding securities registered under Section 12 of the Securities Exchange Act of 1934 or any wholly owned subsidiary of that corporation. (e) Any syndication or other combination of any of the entities specified in subparagraph (a), (b), (c), or (d) which is organized to purchase the promissory note.   (F) A Licensed real estate Broker engaging in the business of selling all or part of the Loan, note, or contract to a lender or purchaser to whom no disclosure is required pursuant to this subdivision. (G) A Licensed residential mortgage lender or servicer when acting under the authority of that License.   (c) When the Broker has custody of funds of a prospective lender or purchaser which were received and are being maintained with the express permission of the owner and in accordance with law, and the Broker retains the funds in an Escrow depository or a Trust fund account pending receipt of the owner's express written instructions to disburse the funds for a Loan or purchase, the Broker shall cause the disclosure statement to be delivered to the owner and shall obtain the owner's written consent to the proposed disbursement before making the disbursement. Unless the Broker has a written agreement with the owner as provided in Section 10231.1, the Broker shall transmit to the owner not later than 25 days after receipt, all funds then in the Broker's custody for which the owner has not given written instructions authorizing disbursement.   10232.5.   (a) If the real estate Broker is performing acts described in subdivision (d) of Section 10131 in negotiating a Loan to be secured by a Lien on real property or on a business opportunity, the statement required to be given to the prospective lender shall include, but shall not necessarily be limited to, the following information:   (1) Address or other means of identification of the real property that is to be the security for the borrower's obligation. (2) Estimated fair market value of the securing property as determined by an appraisal, a copy of which shall be provided to the lender. However, a lender may waive the requirement of an independent appraisal in writing, on a case-by-case basis, in which case, the real estate Broker shall provide the Broker's written estimated fair market value of the securing property, which shall include the objective data upon which the Broker's estimate is based. (3) Age, size, type of construction and a description of improvements to the property if contained in the appraisal or as represented to the Broker by the prospective borrower. (4) Identity, occupation, employment, income, and credit data about the prospective borrower or borrowers as represented to the Broker by the prospective borrower or borrowers. (5) Terms of the promissory note to be given to the lender. (6) Pertinent information concerning all encumbrances which constitute Liens against the securing property and, to the extent of actual knowledge of the Broker, pertinent information about other Loans that the borrower expects or anticipates will result in a Lien being recorded against the property securing the promissory note to be created in favor of the prospective lender. As used in this paragraph, actual knowledge with respect to any anticipated or expected Loan, means knowledge gained by the Broker through arranging that other Loan or receipt of written notification of that other Loan. In this regard, the Broker shall also provide to the prospective lender the option to apply to purchase a title Insurance policy or an endorsement to an existing title Insurance policy covering the securing property, and a copy of a written Loan application, and a credit report. (7) Provisions for servicing of the Loan, if any, including disposition of the late charge and prepayment penalty fees paid by the borrower. (8) Detailed information concerning any proposed arrangement under which the prospective lender along with persons not otherwise associated with him or her will be joint beneficiaries or obligees. (9) If the solicitation is subject to the provisions of Section 10231.2, a detailed statement of the intended use and disposition of the funds being solicited including an explanation of the nature and extent of the benefits to be directly or indirectly derived by the Broker.   (b) If the real estate Broker is performing acts described in subdivision (e) of Section 10131 or in Section 10131.1 in negotiating the sale of a real property sales contract or promissory note secured directly or collaterally by a Lien on real property, the statement required to be given to the prospective purchaser by Section 10232.4 shall include, but shall not necessarily be limited to, the following information:   (1) Address or other means of identification of the real property that is the security for the trustor's or vendee's obligation. (2) Estimated fair market value of the real property as determined by an appraisal, a copy of which shall be provided to the prospective purchaser. However, a purchaser may waive the requirement of an independent appraisal in writing, on a case-by-case basis, in which case, the real estate Broker shall provide the Broker's written estimated fair market value of the securing property, which shall include the objective data upon which the Broker's estimate is based. (3) Age, size, type of construction and a description of improvements to the real property if known by the Broker. (4) Information available to the Broker relative to the ability of the trustor or vendee to meet his or her contractual obligations under the note or contract including the trustor's or vendee's payment history under the note or contract. (5) Terms of the contract or note including the Principal balance owing. (6) Provisions for servicing of the note or contract, if any, including disposition of late charge, prepayment penalty or other fees or charges paid by the trustor or vendee. (7) Detailed information concerning any proposed arrangement under which the prospective purchaser along with persons not otherwise associated with him or her will be joint beneficiaries or obligees. In this regard, the Broker shall also provide to the prospective purchaser the option to apply to purchase a title Insurance policy or an endorsement to an existing title Insurance policy covering the real property and, if available from the seller of the note or contract or from the original lender, a copy of a written Loan application, and a credit report. (8) A statement as to whether the dealer is acting as a Principal or as an Agent in the transaction with the prospective purchaser.   10232.6.   (a) A real estate Broker, acting within the course and scope of his or her License, who arranges for or engages the services of an appraiser Licensed or certified by the Office of Real Estate Appraisers for the applicable transaction, and delivers the resulting appraisal to the prospective lender and prospective purchaser as required by Section 10232.5, has met the Broker's obligation of full and complete disclosure solely pursuant to paragraph (2) of subdivision (a) of Section 10232.5 and paragraph (2) of subdivision (b) of Section 10232.5, and is not required to provide a separate estimate of fair market value under Section 10232.5. (b) This section shall not apply in instances where the Licensed or certified appraiser is an employee of the Broker. However, the duty of disclosure shall not be deemed met where the Broker knew or should have known that the referral was negligently made or that the fair market value provided by the appraiser was inaccurate. (c) Nothing in this section is intended to relieve the Broker of any obligation or requirement to disclose what he or she knows about the value of the property. (d) This section shall apply only to Loan transactions and shall have no effect on a real estate Broker's duties of disclosure in purchase or sales transactions.   10233.   A real estate Licensee who undertakes to service a promissory note secured directly or collaterally by a Lien on real property or a real property sales contract shall comply with each of the following requirements:   (a) The Licensee shall have a written authorization from the borrower, the lender, or the owner of the note or contract, that is included within the terms of a written servicing agreement that satisfies the requirements of paragraphs (1), (2), (4), and (5) of subdivision (k) of Section 10238. (b) The Licensee shall provide the lender or the owner of the note or contract with at least the following accountings:   (1) An accounting of the unpaid Principal balance at the end of each year. (2) An accounting of collections and disbursements received and made during each year. (3) Each accounting required under this subdivision shall identify the person who holds the original note or contract and the deed of Trust evidencing and securing the debt or obligation for which the accounting has been provided.   (c) The Licensee shall provide to the lender or the owner of the note or contract written notification within 15 days of the occurrence of any of the following events:   (1) The recording of a notice of default. (2) The recording of a notice of trustee's sale. (3) The receipt of any payment constituting an amount greater than or equal to five monthly payments, together with a request for partial or total reconveyance of the real property, in which case the notice shall also indicate any further transfer or delivery instructions. (4) The delinquency of any installment or other obligation under the note or contract for over 30 days.   10233.1.   If a real estate Broker in servicing a real property sales contract or a promissory note secured directly or collaterally by a Lien on real property for the mortgagee, beneficiary, or owner of the note or contract, causes funds other than funds received from the obligor of the note or contract to be applied toward a payment to protect the security of the note or contract being serviced, including the payment of debt service on an obligation secured by the same real property having priority over the mortgage or deed of Trust securing the promissory note that the Broker is servicing, the Broker shall, not later than 10 days after making any such payment, give written notice to the mortgagee, beneficiary, or owner of the date and amount of payment, the name of the person to whom payment was made, the source of funds, and the reason for making the payment.   10233.2.   For the purposes of Division 3 (commencing with Section 3101) and Division 9 (commencing with Section 9101) of the Commercial Code, when a Broker, acting within the meaning of subdivision (d) or (e) of Section 10131 or Section 10131.1, has arranged a Loan or sold a promissory note or any interest therein, and thereafter undertakes to service the promissory note on behalf of the lender or purchaser in accordance with Section 10233, delivery, transfer, and perfection shall be deemed complete even if the Broker retains possession of the note or collateral instruments and documents, provided that the deed of Trust or an assignment of the deed of Trust or collateral documents in favor of the lender or purchaser is recorded in the office of the county recorder in the county in which the security property is located, and the note is made payable to the lender or is endorsed or assigned to the purchaser.   10234.   (a) Except as provided in subdivision (d), every real estate Licensee who negotiates a Loan secured by a Trust deed on real property shall cause the Trust deed to be recorded, naming as beneficiary the lender or his or her nominee (who shall not be the Licensee or the Licensee's nominee), with the county recorder of the county in which the real property is located prior to the time that any funds are disbursed, except when the lender has given written authorization for prior release. (b) If funds are released on the lender's written authorization as described in subdivision (a), the Trust deed shall be recorded, or delivered to the lender or beneficiary with a written recommendation that it be recorded forthwith, within 10 days following release. (c) Every real estate Licensee who sells, exchanges, or negotiates the sale or exchange of a real property sales contract or a promissory note secured by a Trust deed on real property shall cause a proper assignment of the real property sales contract or Trust deed to be executed and shall cause the assignment to be recorded, naming as assignee the purchaser or his or her nominee (who shall not be the Licensee or the Licensee's nominee), with the county recorder of the county in which the real property is located within 10 working days after the Licensee or seller receives any funds from the buyer or after close of Escrow; or shall deliver the real property sales contract or Trust deed to the purchaser with a written recommendation that the assignment thereof be recorded forthwith. (d) A Trust deed may be recorded in the name of the real estate Broker negotiating the Loan if all of the following apply:   (1) the lender or purchaser is any person or entity set forth in paragraph (1) of subdivision (c) of Section 10232, (2) the Trust deed is recorded with the county recorder of the county in which the real property is located, and (3) the real property securing the Loan as described in the Trust deed is not a dwelling as defined in Section 10240.2 or unimproved real property.   10234.5.   In addition to the requirements of Section 10234, in the placing of any Loan, a Broker shall deliver or cause to be delivered conformed copies of any deed of Trust to both the investor or lender and the borrower within a reasonable amount of time from the date of recording.   10235.   No real estate Licensee shall knowingly advertise, print, display, publish, distribute, telecast or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, televised or broadcast, in any manner any statement or representation with regard to the rates, terms, or conditions for making, purchasing or negotiating Loans or real property sales contracts which is false misleading or deceptive. Indicating or otherwise implying any specific yield or return on any note other than the interest rate specified in said note shall be prima facie evidence that such advertisement is misleading or deceptive unless the advertisement sets forth the actual interest rate specified in the note and the discount from the outstanding Principal balance at which it is being offered for sale.   10235.5.   (a) No real estate Licensee or Mortgage Loan originator shall place an advertisement disseminated primarily in this state for a Loan unless there is disclosed within the printed text of that advertisement, or the oral text in the case of a radio or television advertisement, the DRE License number and the unique identifier assigned to that Licensee by the Nationwide Mortgage Licensing System and Registry under which the Loan would be made or arranged. (b) "Mortgage Loan originator," "unique identifier," and "Nationwide Mortgage Licensing System and Registry" have the meanings set forth in Section 10166.01.   10236.   The Commissioner in his or her discretion may honor requests from interested persons for interpretive opinions with respect to any provision of this article or with respect to any regulation for implementation of provisions of this article. No provision of this article imposing any Liability applies in the case of an act done or omitted in good faith in conformity with a written interpretive opinion of the Commissioner or an opinion of the Attorney General, notwithstanding that the opinion may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason. 10236.1. No real estate Licensee shall advertise to give or to offer to give to a prospective purchaser or lender any premium, gift or any other object of value as an inducement for making a Loan, or purchasing a promissory note secured directly or collaterally by a Lien on real property or a real property sales contract.   10236.2.   (a) A real estate Broker who satisfies the criteria of subdivision (a) or (b) of Section 10232 and who fails to notify the DRE, in writing, of that fact within 30 days thereafter as required by subdivision (e) of Section 10232 shall be assessed a penalty of fifty dollars ($50) per day for each additional day written notification has not been received up to and including the 30th day after the first day of the assessment penalty. On and after the 31st day the penalty is one hundred dollars ($100) per day, not to exceed a total penalty of ten thousand dollars ($10,000), regardless of the number of days, until the department receives the written notification. (b) The Commissioner may suspend or revoke the License of any real estate Broker who fails to pay a penalty imposed under this section. In addition, the Commissioner may bring an action in an appropriate court of this state to collect payment of the penalty. (c) All penalties paid or collected under this section shall be deposited into the Consumer Recovery Account of the Real Estate Fund.   10236.4.   (a) In compliance with Section 10235.5, every Licensed real estate Broker shall also display his or her License number on all advertisements where there is a solicitation for borrowers or potential investors. Every Mortgage Loan originator, as defined in Section 10166.01, shall also display the unique identifier assigned to that individual by the Nationwide Mortgage Licensing System and Registry on all advertisements where there is a solicitation for borrowers. (b) The disclosures required by Sections 10232.4 and 10240 shall include the Licensee's License number, the Mortgage Loan originator's unique identifier, if applicable, and the department's License information telephone number. (c) "Mortgage Loan originator," "unique identifier," and "Nationwide Mortgage Licensing System and Registry" have the meanings set forth in Section 10166.01.   10236.5.   A real estate Broker shall notify the department when he or she is no longer servicing or arranging Loans subject to the reporting requirements of Section 10232. If a Broker has already made reports required by this article within the year, he or she shall continue reports for that year, but shall notify the department prior to the expiration of that year that he or she will no longer be servicing or arranging Loans for which reports are required. The department's records, including those which may be disclosed by calling the License information telephone number of the department, may then be appropriately updated.   10236.6.   (a) The Commissioner, in his or her discretion, may audit any Broker who conducts transactions subject to the provisions of this article. The audit shall be conducted after reasonable notice to the Broker and shall include an examination of both of the following:   (1) Trust accounts under the control of the Broker or in any manner affiliated with the Broker. (2) Nontrust accounts under the control of the Broker or in any manner affiliated with the Broker to which funds from Trust accounts have been deposited other than for the payment of commissions, fees, costs, or expenses due to or incurred by the Broker.   (b) The authority to audit these nontrust accounts shall be limited to instances where either an annual review or audit conducted by an independent certified public accountant or a departmental audit reveals unauthorized transfers of money to those accounts.   10236.7.   (a) A real estate Broker, when engaging in acts for which a License is required, who arranges a transaction pursuant to Article 6 (commencing with Section 10237) or one or more provisions of the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code), shall clearly indicate in the real estate Broker's transaction file the provision or provisions of this Code or the Corporate Securities Law of 1968 pertaining to qualification or exemption from qualification under which the transaction is being conducted. The real estate Broker shall retain this information for the period specified in subdivision (a) of Section 10148. (b) The real estate Broker shall submit a copy of the information described in subdivision (a) to any investor from whom the real estate Broker obtains funds in connection with the transaction, either directly or through an Agent or affiliate, within 10 days of receipt of those funds. index   www.pseudology.org