California Real Estate Study Guide 2026 — Free Cheat Sheet

'Licensee' (unmodified) means any person, broker or salesperson, licensed under this part. 'Broker' means a person licensed as a broker; 'Salesperson' means a person licensed as a salesperson. A real estate salesperson must be a natural person, retained by a broker for compensation, to perform acts under §§10131 et seq. The term 'salesman' means salesperson.

• ✓A real estate salesperson must be a natural person retained by a broker for compensation
• ✓A broker or company may be licensed, but a salesperson must be a natural person
• ✓'Licensee' without modification includes both brokers and salespersons

A 'responsible broker' is the broker responsible for exercising control and supervision of salespersons under §10159.2, or a licensee subject to discipline under §10177(h) for failure to supervise. A 'manager' is a licensee authorized to perform supervisorial services for a responsible broker. A 'broker associate' is a broker retained by a responsible broker to provide licensed services on the responsible broker's behalf.

• ✓A responsible broker must exercise control and supervision over affiliated salespersons and broker associates
• ✓Supervision is limited to regulatory compliance and consumer protection
• ✓A broker associate is a licensed broker working under another responsible broker

AB 1289 and AB 2884 did not change a broker's existing statutory/common law duties as agent, fiduciary duties, disclosure duties, or a responsible broker's duty to supervise. A responsible broker has a duty to supervise each affiliated salesperson and broker associate regardless of whether the retention contract calls it an independent contractor or employment relationship, and is liable for their actions or negligence.

• ✓A responsible broker must supervise licensed acts of each affiliated salesperson/broker associate regardless of the contractor vs. employee label
• ✓A responsible broker is liable for the actions or negligence of retained salespersons/broker associates
• ✓Broker fiduciary and disclosure duties under existing law remain in force

A 'listing' includes lists of owners/property offered for sale/rent/lease/exchange, lists of prospective buyers, and service agreements to promote a sale or lease. A 'listing agreement' is a written contract between a seller and broker authorizing the broker to sell or find a buyer. Types: exclusive right to sell (compensation regardless of who sells), seller reserved (no compensation if owner sells directly), and open (compensation only if that agent obtains the accepted offer first).

• ✓A listing agreement must be a written contract between seller and broker
• ✓Exclusive right to sell listing entitles the agent to compensation no matter who effects the sale during the term
• ✓Under an open listing, no exclusive rights are granted and the agent is paid only if that agent obtains the accepted offer before the property is otherwise sold
• ✓Under a seller reserved listing, no compensation is owed if the owner sells directly, not through another broker

The Department of Real Estate exists within the Business, Consumer Services, and Housing Agency; its chief officer is the Real Estate Commissioner. The Commissioner's principal responsibility is to enforce the Real Estate Law and the Subdivided Lands Law to achieve maximum protection for buyers of real property and persons dealing with real estate licensees.

• ✓The Commissioner's principal responsibility is to enforce the law for maximum protection of buyers and those dealing with licensees
• ✓The Real Estate Commissioner is the chief officer of the Department of Real Estate

Protection of the public is the highest priority for the Department in exercising its licensing, regulatory, and disciplinary functions. Where public protection conflicts with other interests, public protection is paramount.

• ✓Protection of the public is the highest priority of the Department
• ✓When public protection conflicts with other interests, public protection is paramount

If the Commissioner has cause to believe an unlicensed person is performing acts requiring a license, or a licensee has violated the law, the Commissioner may issue a written citation. Citations may include an order to correct and an administrative fine not to exceed $2,500, deposited into the Recovery Account of the Real Estate Fund. The cited person has 30 days to request a hearing or the citation becomes final. No license may be issued or renewed while an unpaid fine or uncorrected citation remains.

• ✓Administrative fines by citation may not exceed $2,500
• ✓Citation fines are deposited into the Recovery Account of the Real Estate Fund
• ✓The cited person has 30 days to request a hearing or the citation becomes final
• ✓No license may be issued or renewed while an unpaid fine or uncorrected citation remains outstanding

A licensee negotiating or offering to perform a mortgage loan modification or forbearance for a fee may not collect any compensation until fully performing all contracted services, may not take a lien or security, and may not take a power of attorney from the borrower.

• ✓No compensation collected until all services fully performed
• ✓No wage assignment, lien, or security to secure payment
• ✓No power of attorney from the borrower
• ✓Applies only to residential property with four or fewer dwelling units
• ✓A violation is also subject to a civil penalty of up to $20,000 per violation under Civil Code §2944.7

If the commissioner determines through investigation that a person has violated the license law or regulations, the commissioner may issue a desist and refrain order. The respondent must immediately cease and may request a hearing within 30 days of service.

• ✓Respondent must immediately cease the activity upon receipt of order
• ✓Respondent may request a hearing within 30 days of service
• ✓Hearing must commence within 30 days of request unless postponed by respondent

Part 1 of Division 4 is cited as the Real Estate Law. Definitions in Chapter 1 apply to this part only. 'Commissioner' means the Real Estate Commissioner; 'Department' means the Department of Real Estate in the Business, Consumer Services, and Housing Agency. 'Person' includes a corporation, company, and firm.

• ✓Part 1 of Division 4 of the Business and Professions Code is known as the Real Estate Law
• ✓'Person' includes corporation, company and firm
• ✓'Department' means the Department of Real Estate within the Business, Consumer Services, and Housing Agency

An 'advance fee' is any fee, regardless of form, claimed, demanded, charged, received or collected by a licensee for licensed services or a listing before fully completing the contracted service. Fees may not be split into components to avoid regulation. Exclusions include Civil Code §1950.5 security deposits, §1950.6 screening fees, certain advertising fees not under broker control, and fees under a qualifying 'limited service' contract. A commission paid after full performance is not an advance fee.

• ✓An advance fee is collected before the licensee fully completes the contracted service
• ✓A fee cannot be divided into components to avoid advance-fee regulation
• ✓A commission payable only after the contract is fully performed is NOT an advance fee
• ✓Security deposits and tenant screening fees are excluded from the advance fee definition

A 'real property sales contract' is an agreement to convey title upon satisfaction of specified conditions that does NOT require conveyance of title within one year of formation (i.e., a land installment contract). 'Trust deed'/'deed of trust' includes 'mortgage.' 'Business opportunity' includes sale/lease of the business and goodwill of an existing enterprise.

• ✓A real property sales contract does not require conveyance of title within one year of formation
• ✓'Trust deed' or 'deed of trust' as used in this part includes a mortgage
• ✓A business opportunity includes the business and goodwill of an existing enterprise

All obligations of brokers and salespersons to members of the public apply regardless of whether the broker-salesperson relationship is characterized as independent contractor or employer-employee. The parties may contract as either for their legal relationship with each other; tax/unemployment characterization follows the Unemployment Insurance Code and workers' comp follows the Labor Code.

• ✓Duties to the public apply regardless of the independent contractor vs. employee characterization
• ✓Broker and salesperson may contract as independent contractors or employer-employee for their relationship with each other

The Commissioner is appointed by the Governor. The Commissioner must have been a real estate broker actively engaged in business in California for five years, or possess related real estate experience in California for five years within the last 10 years.

• ✓The Commissioner is appointed by the Governor
• ✓The Commissioner must have 5 years' experience as an active California broker or 5 years related real estate experience within the last 10 years

The Commissioner enforces the Real Estate Law and has full power to regulate and control the issuance and revocation (temporary and permanent) of all licenses. The Commissioner may adopt, amend, or repeal rules and regulations reasonably necessary for enforcement, following the Administrative Procedure Act. These regulations are found in the California Code of Regulations.

• ✓The Commissioner has full power over issuance and revocation of licenses, both temporary and permanent
• ✓Rules and regulations must be adopted under the Administrative Procedure Act
• ✓The Commissioner's principal office is in Sacramento

The Commissioner may bring an action to enjoin violations of the Real Estate Law and may seek restitution for injured persons. For trust fund violations under §10145, if an audit reflects commingling or conversion of trust funds exceeding $10,000, the court may restrain the licensee and appoint a receiver. No preliminary injunction/TRO may be granted without at least five days' notice to the defendant.

• ✓The Commissioner may seek an injunction and restitution for persons injured by violations
• ✓An audit showing commingling or conversion of trust funds over $10,000 may lead the court to restrain the licensee and appoint a receiver
• ✓No preliminary injunction or TRO without at least 5 days' notice to the defendant

The commissioner must provide license status information on the internet including suspensions, revocations, and accusations filed. Personal information (home phone, DOB, SSN) is excluded, but the licensee's address of record is disclosed. Licensees may use a P.O. box or alternate mailing address instead of a home address for the public record.

• ✓Public online info must include suspensions, revocations, and accusations
• ✓Personal info like home phone, DOB, and SSN may not be disclosed
• ✓Licensee may provide a P.O. box or alternate address instead of home address
• ✓Info must identify associate licensees and responsible brokers

The commissioner may require advance fee agreement materials (contracts, solicitation letters, advertising) to be submitted at least 10 calendar days before use. If materials would tend to mislead, the commissioner may order they not be used within 10 days. Violation is a misdemeanor.

• ✓Materials may be required 10 calendar days before use
• ✓Commissioner may order misleading materials not be used within 10 days
• ✓Violation is a misdemeanor punishable by up to $2,500 fine or 6 months jail

It is unlawful to charge an advance fee for soliciting lenders on behalf of borrowers or performing services in connection with real property secured loans before the borrower is obligated, unless done by a licensed real estate broker complying with the law.

• ✓Advance fee for loan services before borrower obligation requires a licensed broker
• ✓Banks, savings associations, and licensed finance lenders are exempt
• ✓Violation punishable by up to $10,000 fine (up to $50,000 for corporations)

In addition to other authority, the commissioner may suspend or bar a broker, salesperson, or unlicensed person for up to 36 months where it is in the public interest and the person committed a violation or was convicted of a crime involving dishonesty, fraud, or deceit.

• ✓Bar/suspension may last up to 36 months
• ✓Grounds include public-interest violations or conviction for dishonesty/fraud/deceit
• ✓Person must request hearing within 15 days of notice or waives the right
• ✓Upon notice, person is immediately prohibited from real estate business activity

A licensee may petition the commissioner (with a fee) to remove a disciplinary posting that has been on the DRE website for at least 10 years, upon showing evidence of rehabilitation that the notice no longer poses a credible risk to the public.

• ✓Discipline posting must be at least 10 years old before removal petition
• ✓Licensee must provide evidence of rehabilitation
• ✓Commissioner considers other violations posing credible risk before removing

The DRE publishes the Homeowners' Guide to Environmental Hazards (B&P §10084.1; Health and Safety Code §§25417–25417.2) to educate consumers on common hazards such as asbestos, radon, lead-based paint, formaldehyde, storage tanks and soil or water contamination. New editions must substantially comply with federal lead and radon disclosure requirements, and the guide has been updated to cover thirdhand smoke, wildfires, climate change and sea level rise. Delivering the booklet is deemed adequate general information on those hazards but never relieves the duty to disclose known hazards on the property.

• ✓The Homeowners' Guide to Environmental Hazards covers asbestos, radon, lead-based paint, formaldehyde, tanks and contamination
• ✓New editions must substantially comply with federal lead and radon disclosure requirements
• ✓Updated to include thirdhand smoke, wildfires, climate change and sea level rise
• ✓Delivery of the booklet is deemed adequate general information (Civil Code §2079.7) but does not excuse disclosing known hazards

All fees charged and collected under this part (and under Chapter 1 of Part 2), except as otherwise provided, must be paid by the commissioner into the state treasury at least once a month, accompanied by a detailed statement.

• ✓Fees are deposited into the Real Estate Fund
• ✓The commissioner must pay collected fees at least once a month with a detailed statement

A 'military licensee' is a person who held a real estate license or endorsement when entering U.S. military service and notified the commissioner within six months of entry. Such licensees need not renew until the license period first commencing after re-entering business or one year after termination of military service, whichever is earlier. Privileges are lost upon dishonorable discharge or voluntarily remaining in service more than seven years from date of notification.

• ✓Military licensee must notify commissioner within six months of entering military service
• ✓Renewal deferred until the earlier of re-entering business or one year after termination of service
• ✓Privileges lost on dishonorable discharge or voluntarily serving more than seven years from notification
• ✓A person who failed to notify may apply for reinstatement upon resuming business or within one year of service termination

It is unlawful to engage in, act as, advertise as, or assume to act as a real estate broker or salesperson in California without first obtaining a license, or to act as a mortgage loan originator without a license endorsement. District attorneys must prosecute violations.

• ✓A license is required to act as a broker or salesperson in California
• ✓A mortgage loan originator requires a license endorsement
• ✓District attorneys have a duty to prosecute violations

A broker is one who, for compensation or expected compensation, performs for another acts such as selling, buying, soliciting, or negotiating real property or business opportunities; leasing/renting; collecting rents; soliciting borrowers/lenders and negotiating loans; and selling/exchanging real property sales contracts or notes secured by liens.

• ✓Broker acts for compensation on behalf of another or others
• ✓Covered acts include selling, buying, leasing, renting, and collecting rents
• ✓Covered acts include negotiating loans secured by liens on real property
• ✓Regardless of form or time of compensation payment

Section 10131 acts do not require a real estate license when performed by certain persons acting in specific capacities. These exemptions do not apply to anyone using them to evade the license law.

• ✓Exempt persons include: a corporate officer or general partner acting on the entity's own property without special compensation; a holder of a duly executed power of attorney; an attorney rendering legal services; a court-appointed receiver or trustee in bankruptcy; a trustee under a deed of trust selling under that trust's authority
• ✓Exemptions are void if used to evade the provisions of the real estate law

A person acting as a broker or salesperson cannot bring or maintain a court action to collect compensation without alleging AND proving they were duly licensed at the time the cause of action arose.

• ✓Plaintiff must both allege and prove they held a valid license when the cause of action arose
• ✓Applies to brokers and salespersons seeking compensation for licensed acts

A broker may not compensate an unlicensed person for licensed acts. A salesperson may only accept compensation from the broker under whom they are licensed and may pay other licensees only through the responsible broker.

• ✓A broker may not compensate anyone (directly or indirectly) for licensed acts unless they are a licensed broker or a salesperson under the responsible broker; a broker may pay a commission to an out-of-state broker
• ✓A salesperson may accept compensation for licensed activity only from the broker under whom they are currently licensed
• ✓Licensees sharing compensation must have it paid through the responsible broker
• ✓Violation may result in temporary suspension or permanent revocation of the license

Acting as or advertising as a broker, salesperson, or mortgage loan originator without a license is a public offense with substantial fines and possible jail time; corporations face higher fines.

• ✓Individuals: fine up to $20,000, or up to six months in county jail, or both
• ✓Corporations: fine up to $60,000
• ✓Excess fines above $10,000 (individual) or $50,000 (corporation) may be deposited into the county's Real Estate Fraud Prosecution Trust Fund if one exists

Certain managers and employees are exempt from licensing, including hotel/motel/apartment resident managers and their employees, and unlicensed property management firm employees performing specified leasing functions under broker supervision. Brokers must exercise reasonable supervision over such nonlicensed persons.

• ✓Resident managers of apartments and their employees are exempt
• ✓Unlicensed employees may show units, accept applications, deposits, and rents under supervision
• ✓Broker must exercise reasonable supervision and control over nonlicensed persons
• ✓Broker must comply with Section 10163 for each apartment location

A person acting as principal in the business of making loans or buying/selling real property sales contracts or notes secured by liens is a broker. 'In the business' means acquiring, selling, or making eight or more such contracts, notes, or loans in a calendar year.

• ✓Eight or more transactions per calendar year constitutes being 'in the business'
• ✓Own funds excludes third-party funds advanced conditioned on later purchase
• ✓Transactions negotiated through a licensee are not counted for threshold

Various mortgage/lending statutes (subdivisions (d) and (e) of §10131, §10131.1, Articles 5 and 7) do not apply to banks, trust companies, savings and loans, credit unions, insurance companies, finance lenders, residential mortgage lenders/servicers, securities brokers/dealers, PACE administrators/solicitors, and certain HUD-approved counseling organizations acting within their authority.

• ✓Banks, trust companies, S&Ls, credit unions, insurance companies and their employees are exempt when acting under their governing law
• ✓A person making collections on 10 or fewer loans, or in amounts of $40,000 or less per calendar year, is exempt from the payment-collection/servicing provisions
• ✓A broker must exercise reasonable supervision over nonlicensed employees, and the commissioner may still discipline a broker for a nonlicensed employee's misconduct

A license is not required for stenographers, bookkeepers, receptionists, telephone operators, or other clerical help when carrying out their clerical functions.

• ✓Sections 10016, 10131, 10131.1, and 10132 do not apply to clerical help performing clerical duties
• ✓The exemption applies only while carrying out clerical functions, not licensed activities

A partnership may perform acts requiring a broker license only if every partner through whom the partnership acts is a licensed real estate broker.

• ✓Every partner acting on behalf of the partnership in broker activities must hold a broker license
• ✓Nothing precludes a partnership from performing broker acts if this licensing requirement is met

A real estate broker who selects and prepares legal instruments such as notes, mortgages, and deeds of trust for a fee in an independent loan transaction may be engaged in the unlawful practice of law. 'Practice of law' is not limited to court appearances—it includes giving legal advice and preparing legal instruments that secure legal rights. Only active licensees of the State Bar may practice law in California.

• ✓No person may practice law in California unless an active State Bar licensee (§6125)
• ✓Selection and preparation of a note, mortgage, and deed of trust by a broker for a fee in an independent loan transaction has been held to be unlawful practice of law (People v. Sipper)
• ✓'Practice of law' includes legal advice and preparation of legal instruments, not just court appearances
• ✓Unauthorized practice of law is a misdemeanor punishable by up to one year in county jail and/or a $1,000 fine (§6126)

Under the California Self-Service Storage Facility Act, an owner or operator managing a self-service storage facility or receiving rent from occupants does not need a real estate license. A self-service storage facility rents individual storage space for storing personal property and may not be used for residential purposes.

• ✓No real estate license is required to manage a self-service storage facility or receive rent from occupants
• ✓No occupant may use a self-service storage facility for residential purposes
• ✓A self-service storage facility does not include a garage or storage area in a private residence

A broker also includes a person who collects advance fees for promoting sale/lease of property; one who negotiates specified securities (unless a licensed broker-dealer); and one who deals in mineral, oil, or gas (MOG) property for compensation or as a principal.

• ✓Collecting advance fees to promote property sale/lease requires a broker license
• ✓Broker-dealers licensed under Corporate Securities Law are exempt from securities provision
• ✓Dealing in mineral, oil, or gas property for compensation requires a broker license

A licensed broker may sell or negotiate a manufactured/mobilehome only if it has been registered under the Health and Safety Code. A broker may not display and offer two or more mobilehomes for sale unless also licensed as a mobilehome dealer.

• ✓Broker may sell a mobilehome only if it is registered under Health and Safety Code
• ✓Displaying/offering two or more mobilehomes for sale requires a mobilehome dealer license

A real estate licensee handling manufactured homes/mobilehomes may not advertise or offer for sale a unit unless it is properly placed in an established mobilehome park or otherwise lawfully located for at least one uninterrupted year. Licensees have specific duties regarding withdrawal of ads and accurate representations.

• ✓Must withdraw any mobilehome advertisement within 48 hours after receiving notice the unit is no longer available for sale, lease, or exchange
• ✓May not advertise a used mobilehome/manufactured home as 'new'
• ✓May not falsely represent 'no downpayment required' when a downpayment is in fact required and financed by an additional loan
• ✓Must properly endorse, date, and deliver certificate of ownership/title and deliver registration card to a lawful transferee

It is unlawful to sell a franchise in California unless the person is authorized. One category of authorized sellers is a person licensed by the Department of Real Estate as a real estate broker or salesperson. This connects real estate licensing to franchise sales activity.

• ✓A licensed real estate broker or salesperson is authorized to effect the sale of a franchise in California
• ✓Selling a nonexempt franchise without proper authorization (e.g., DRE license, broker-dealer license, or franchise broker registration) is unlawful
• ✓A franchise offer must be registered under the Franchise Investment Law or exempted before it may be offered or sold

Applicants for the salesperson license/exam must show successful completion at an accredited institution of a three-semester-unit course in Real Estate Principles, plus Real Estate Practice, plus one additional statutory course. Evidence must be provided before taking the exam.

• ✓Must complete Real Estate Principles, Real Estate Practice, and one additional approved course
• ✓Evidence of course completion must be provided before taking the salesperson exam
• ✓Requirements are waived for members of the State Bar of California and those qualified for the broker exam

An applicant for an original broker license must show they held a salesperson license for at least two years within the prior five years and were actively engaged in the business. Alternatively, an applicant with the equivalent of two years' general real estate experience may petition; a four-year college degree with a real estate major/minor may be treated as the equivalent of two years' experience.

• ✓Must have held a salesperson license and been actively engaged at least two years within the prior five years
• ✓Two years' equivalent general real estate experience may be accepted via written petition
• ✓A four-year degree with a real estate major/minor may equal two years' experience

All applicants for a real estate license must pass a written examination administered by the commissioner in addition to proving honesty and truthfulness. For corporate broker applicants, each officer or agent through whom the corporation proposes to act must pass. The exam tests knowledge of English (reading, writing, spelling), real estate arithmetic, conveyancing principles, agency contracts, deposit receipts, deeds, mortgages, deeds of trust, land contracts, leases, appraisals, and land economics.

• ✓The commissioner ascertains applicant qualification by written examination in addition to proof of honesty and truthfulness.
• ✓Exam covers English proficiency, real estate arithmetic, conveyancing, agency obligations, business ethics, the Real Estate Law, and Commissioner's Regulations in Title 10 CCR.

Broker license applicants must complete, at an accredited institution, eight statutorily required three-unit college courses. Five are mandatory: Real Estate Practice (which must include an implicit bias component and an interactive fair housing component with roleplay), Legal Aspects of Real Estate, Real Estate Appraisal, Real Estate Financing, and Real Estate Economics or Accounting. The applicant must also complete three courses chosen from a list including advanced legal aspects, advanced finance, advanced appraisal, business law, escrows, real estate principles, property management, office administration, mortgage loan brokering/lending, computer applications, and common interest development law.

• ✓Broker applicants must complete five mandatory three-unit courses plus three elective courses (eight total) at an accredited institution.
• ✓The Real Estate Practice course must include an implicit bias component and an interactive fair housing roleplay component.
• ✓The commissioner shall waive the course requirements for a member of the State Bar of California or one who completed an equivalent course of study.

All real estate broker and salesperson licenses issued by the commissioner are for a period of four years. Applicants must qualify in the appropriate examination and satisfy all other requirements before issuance. The four-year license may be renewed by filing the required application and fee and complying with continuing education provisions (Article 2.5, commencing with Section 10170).

• ✓Both broker and salesperson licenses are issued for a four-year period.
• ✓Renewal requires the application, fee, and compliance with continuing education under Article 2.5.

The Commissioner shall NOT issue an MLO endorsement unless: the applicant never had an MLO license revoked in any jurisdiction; has not been convicted of/pled guilty or nolo to a felony in the 7 years preceding application (or at any time if the felony involved fraud, dishonesty, breach of trust, or money laundering); demonstrates financial responsibility, character, and general fitness; and has met the education and written test requirements.

• ✓No MLO endorsement if applicant ever had an MLO license revoked in any governmental jurisdiction
• ✓No felony conviction in the 7 years before application, or ever if the felony involved fraud, dishonesty, breach of trust, or money laundering
• ✓Applicant must demonstrate financial responsibility, character, and general fitness to command community confidence
• ✓Expunged or pardoned felony convictions do not require denial, but the underlying facts may be considered

In addition to §10153 requirements, an MLO applicant must complete at least 20 hours of NMLS-approved education: 3 hours federal law, 3 hours ethics (fraud, consumer protection, fair lending), and 2 hours on nontraditional mortgage products. The applicant must pass a qualified written test with a score of at least 75%. Failed tests may be retaken after 30 days; after 3 consecutive failures, the applicant must wait 6 months. An MLO who lapses for 5+ years must retake the test.

• ✓MLO applicants must complete at least 20 hours of pre-license education (3 fed law, 3 ethics, 2 nontraditional products)
• ✓A passing test score is at least 75% correct answers
• ✓At least 30 days must pass between retests; 6-month wait after 3 consecutive failures
• ✓MLO who fails to maintain a valid endorsement for 5 years or longer must retake the qualified written test

As a prerequisite to renewal of a real estate license, licensees must complete 45 clock hours of approved continuing education during the four-year period preceding the renewal application. The commissioner adopts regulations defining qualifying programs, equivalency standards, reporting/control systems, testing for correspondence/homestudy courses, and exemption conditions for health, military service, or other compelling cause.

• ✓45 clock hours of approved CE required within the 4-year period preceding renewal.
• ✓CE is a prerequisite to license renewal on and after January 1, 1981.
• ✓Exemptions available for health, military service, or other compelling cause.

For a licensee's first renewal, the 45 hours must include specific mandatory courses: a 3-hour ethics course; a 3-hour agency course; a 3-hour trust fund accounting and handling course; a 3-hour fair housing course with an interactive role-play component; a 3-hour risk management course; a 2-hour implicit bias training course; and, for brokers, an additional 3-hour course in office management and supervision. At least 18 hours must be consumer protection courses. 'Successful completion' of these mandatory courses requires passing a final examination.

• ✓First renewal requires 3-hour courses in ethics, agency, trust fund handling, fair housing (with interactive role-play), and risk management, plus 2-hour implicit bias training.
• ✓Brokers must additionally complete a 3-hour office management and supervision course.
• ✓At least 18 of the 45 hours must be consumer protection courses.
• ✓'Successful completion' means passing a final examination.

Applications for broker or salesperson examinations and licenses must be made in writing (or electronically for MLO endorsements) to the commissioner with valid contact information and the required fee. No license is issued until the applicant passes the corresponding license examination.

• ✓Applications must be in writing with valid contact info and the required fee
• ✓License shall not be issued until the applicant passes the license examination
• ✓MLO endorsement applications must meet SAFE Act (2008) minimum requirements

A nonresident may obtain a California real estate license if they qualify under the chapter and their home state permits Californians to obtain a license there. Every nonresident applicant must file an irrevocable consent that process may be served upon them by delivery to the Department of Real Estate when personal service cannot be made in California.

• ✓Nonresident's home state must permit reciprocal licensure of California residents
• ✓Foreign corporation is exempt if a designated licensed broker-officer is a California resident
• ✓Nonresident must file an irrevocable consent to service of process through the DRE

The commissioner may require proof of an applicant's honesty and truthfulness, including for corporate officers, directors, or 10%+ stockholders, and must require every original applicant to be fingerprinted before issuing a license. Petitions for reinstatement or penalty reduction also require submission of fingerprints.

• ✓Every original applicant must be fingerprinted prior to license issuance
• ✓Commissioner may require additional proof of honesty for applicants and corporate officers/directors/10%+ stockholders
• ✓Reinstatement or penalty-reduction petitions must include fingerprints

No person may cheat on, subvert, or attempt to subvert a licensing examination. Prohibited conduct includes unauthorized communication during the exam, copying answers, having another person take the exam, removing exam materials, unauthorized reproduction of exam content, possessing unauthorized materials/devices, failing to follow security rules, and providing false qualification information. The commissioner may bar a candidate who willfully cheats from taking any license exam and from holding an active license for up to three years.

• ✓Cheating includes copying answers, impersonation, removing/reproducing exam materials, and possessing unauthorized devices or notes.
• ✓The commissioner may bar a willful cheater from examination and from holding an active license for up to three years.

It is unlawful to practice deception or fraud regarding one's identity in connection with any examination, application, or request to be examined. Anyone who willfully violates or knowingly participates in the violation is guilty of a misdemeanor.

• ✓Deception or fraud regarding identity in any examination, application, or request is unlawful.
• ✓Willful violation or knowing participation is a misdemeanor.

When an applicant fails the qualifying examination, they may apply for reexamination by filing the appropriate application and fee. The reexamination application and fee must be filed and the reexamination taken within the two-year period following the date the original application for examination was filed.

• ✓A failed applicant may reapply for reexamination with the proper application and fee.
• ✓Reexamination must be taken within two years following the date the original examination application was filed.

A properly completed renewal application filed before midnight of the last day of the license period, with the applicable renewal fee and good faith evidence of continuing education compliance, entitles the applicant to continue operating under the existing license after its expiration date, unless previously suspended or revoked. If the commissioner determines CE requirements were not met, they must either advise of an extended compliance period (Section 10171.2) or advise that operating rights expire five days after notice is mailed or on the normal expiration date, whichever is later.

• ✓A timely renewal application with fee and good faith CE evidence allows continued operation past the expiration date.
• ✓If CE is not met, operating rights expire five days after notice is mailed or on normal expiration date, whichever is later, subject to hearing rights.

The commissioner may issue a restricted license to a person who has violated Division 4 in a way justifying suspension/revocation, or an applicant who met examination and experience requirements but failed to make a satisfactory showing on other requirements. A restricted license may be limited by term, to employment by a particular broker (if a salesperson), or by conditions in exercising privileges. The commissioner may also require surety bonds as a condition.

• ✓A restricted license may be issued after a hearing to a violator or a deficient applicant in the public interest.
• ✓Restrictions may include term limits, employment by a specific broker, conditions, and surety bonds.

A restricted license confers no property right in the privileges exercised, and the holder has no right to renewal. The commissioner may, without a hearing, issue an order suspending the licensee's right to exercise restricted-license privileges pending final determination after a formal hearing.

• ✓A restricted license confers no property right and no right to renewal.
• ✓The commissioner may suspend restricted-license privileges without a hearing pending a formal hearing determination.

Under California's implementation of the federal SAFE Act, a 'mortgage loan originator' (MLO) is an individual who takes a residential mortgage loan application or offers/negotiates terms of a residential mortgage loan for compensation or gain. Individuals performing purely administrative/clerical tasks, those only performing real estate brokerage services (unless compensated by a lender or MLO), and certain others are excluded. A 'residential mortgage loan' is secured by a dwelling of one to four units used for personal, family, or household purposes.

• ✓An MLO takes a residential mortgage loan application or offers/negotiates loan terms for compensation or gain.
• ✓A dwelling means a residential structure with one to four units, including condos, mobilehomes, and trailers used as residences.

No individual may engage in business as a mortgage loan originator without first obtaining and maintaining a real estate license AND obtaining and maintaining a mortgage loan originator license endorsement. Endorsements are valid for one year, expiring December 31 each year. Brokers and salespersons who make, arrange, or service one-to-four-unit residential loans must notify the department. Failure to notify or obtain the endorsement results in penalties of $50/day (first 30 days), then $100/day, up to $10,000. Penalties are deposited into the Consumer Recovery Account of the Real Estate Fund.

• ✓An MLO must hold both a real estate license and a mortgage loan originator endorsement, which expires each December 31.
• ✓Failure to notify or obtain endorsement incurs $50/day for 30 days then $100/day, capped at $10,000; funds go to the Consumer Recovery Account.

An applicant for a mortgage loan originator (MLO) license endorsement from the DRE Commissioner must furnish identifying information to the Nationwide Multistate Licensing System and Registry (NMLS&R), including fingerprint images for federal and state criminal background checks, personal history and experience, authorization for an independent credit report, and information on administrative, civil, or criminal findings by any jurisdiction.

• ✓MLO applicants must submit fingerprints for state and federal criminal history background checks through NMLS&R
• ✓Applicants must authorize NMLS&R and the Commissioner to obtain an independent credit report and any administrative/civil/criminal findings

After notice and hearing, the Commissioner may deny, suspend, revoke, restrict, condition, or decline to renew an MLO endorsement for violation of the article or its rules, or if the applicant/holder fails to meet requirements of §10166.05 or §10166.09, withholds information, or makes a material misstatement. The Commissioner may also issue desist and refrain orders, including immediate temporary orders.

• ✓MLO endorsements may be denied, suspended, revoked, restricted, or non-renewed for violations or material misstatements
• ✓The Commissioner may issue immediate temporary desist and refrain orders and orders to cease business

A broker who makes, arranges, or services one or more loans in a calendar year secured by 1-4 residential units must file an annual business activities report within 90 days after the broker's fiscal year end. The report covers all supervised brokers/salespersons and details mortgage activities, loan totals, rates, compensation, prepayment penalties, and disclosures. Late filing lets the Commissioner charge 1.5 times the cost of examination, and failure to pay within 60 days may result in license suspension or non-renewal.

• ✓Brokers making/arranging/servicing 1-4 unit residential loans must file an annual business activities report within 90 days of fiscal year end
• ✓Late filing allows the Commissioner to charge 1.5 times the examination cost, with license suspension for nonpayment within 60 days
• ✓Brokers may file consolidated reports to satisfy both §10166.07 and §10232.2

Mortgage loan brokers must keep documents (at minimum those in §10148) enabling the Commissioner to verify compliance. Records are subject to inspection, examination, or audit after reasonable notice, and failure to produce records within the specified time may result in license suspension or revocation. Penalties imposed on examination are deposited into the Consumer Recovery Account of the Real Estate Fund.

• ✓Mortgage loan brokers must retain records (minimum those in §10148) for Commissioner review
• ✓Failure to produce records within the requested time period may result in license suspension or revocation
• ✓Penalties collected are deposited into the Consumer Recovery Account of the Real Estate Fund

To renew an MLO endorsement, the originator must continue to meet minimum standards and satisfy annual continuing education. MLOs must complete at least 8 hours of CE annually: 3 hours federal law, 2 hours ethics (fraud, consumer protection, fair lending), and 2 hours on nontraditional mortgage products. Credit is only given in the year taken, the same course cannot be repeated in successive years, and a lapsed/suspended/revoked MLO must complete CE for the last year held before reinstatement.

• ✓MLOs must complete at least 8 hours of continuing education annually (3 fed law, 2 ethics, 2 nontraditional products)
• ✓CE credit is received only in the year the course is taken; the same course cannot be repeated in the same or successive years
• ✓A lapsed/expired/suspended/revoked MLO must complete CE for the last year held before reinstatement

A licensee who has already renewed under the first-renewal requirements must, for subsequent renewals, complete the 45 clock hours including a nine-hour update survey course covering the subject areas of ethics, agency, trust fund handling, fair housing, risk management, implicit bias, and (for brokers) office management/supervision.

• ✓Subsequent renewals require a nine-hour update survey course within the 45 hours.
• ✓The survey course must cover the mandatory subject areas from paragraphs (1)–(7) of §10170.5(a).

The continuing education requirement does not apply to a real estate licensee who proves to the commissioner that they have been a licensee in good standing for 30 continuous years in California and are 70 years of age or older. 'Good standing' means an active license not suspended, revoked, or restricted by discipline, not surrendered while under investigation, and not subject to debarment.

• ✓CE exemption requires 30 continuous years as a licensee in good standing AND age 70 or older.
• ✓'Good standing' excludes licenses suspended, revoked, restricted, surrendered under investigation, or debarred.

If an applicant submits good-faith but insufficient CE evidence, the commissioner may extend the license 90 days to allow additional proof (license still expires four years from the original date). A revoked license may not be reinstated, nor a restricted license issued, without proof of required CE (unless a qualifying exam is required instead). Applicants renewing/reinstating whose last active license was issued four or more years earlier must present CE compliance; if not, a 90-day temporary license may be issued.

• ✓Commissioner may grant a 90-day grace period for good-faith but insufficient CE evidence.
• ✓Reinstatement of a revoked/restricted license requires proof of required CE unless a qualifying exam is required.
• ✓A 90-day temporary license may be issued when CE compliance is not shown at renewal/reinstatement after 4+ years.

California licensing boards, including the Department of Real Estate, must check applicants against a certified list of child support obligors who are out of compliance. The DRE can withhold issuance or renewal of a real estate license if the applicant is on the list. 'Compliance' means being no more than 30 calendar days in arrears on support payments or obtaining a judicial finding of equitable estoppel. This directly affects real estate licensees and applicants.

• ✓The Department of Real Estate is a 'board' subject to Section 17520 and must check applicants against the certified child support delinquency list before issuing or renewing a license
• ✓Compliance means being no more than 30 calendar days in arrears on current support, periodic payments, or reimbursement obligations
• ✓Boards must collect social security numbers or individual taxpayer identification numbers from all license applicants for matching purposes

An applicant on the certified list who is otherwise eligible receives a temporary license valid for 150 days. Upon expiration, the license is denied unless the board receives a release from the local child support agency confirming compliance or a payment agreement. The applicant must act diligently in responding to notices, as the temporary license lapses after 150 days.

• ✓A temporary license valid for 150 days is issued to an otherwise eligible applicant whose name is on the certified list
• ✓Only one temporary license may be issued during a license term and the 150-day period generally cannot be extended (except certain driver's licenses)
• ✓A board that receives a release from the local child support agency must process it within five business days
• ✓Funds paid by an applicant/licensee are not refunded if the license is denied or suspended under this section

The commissioner must expedite the initial licensure process for honorably discharged active-duty veterans and for spouses/partners of active-duty members stationed in California who hold a current license in another jurisdiction. Applicants may apply military experience toward broker licensure requirements.

• ✓Honorably discharged active-duty veterans receive expedited initial licensure
• ✓Military spouses assigned to California who hold a current out-of-state license receive expedited processing
• ✓Military experience may be applied toward broker licensure requirements

An 'accredited institution' means a college or university accredited by the Western Association of Schools and Colleges (WASC) or another regional accrediting agency recognized by the U.S. Department of Education, or one the commissioner judges to have an equivalent real estate curriculum. An 'equivalent course of study' consists of courses at a private vocational school found by the commissioner to be equivalent in quality to real estate courses at WASC-accredited colleges.

• ✓Accredited institution means a college/university accredited by WASC or another recognized regional agency.
• ✓Equivalent course of study means private vocational school courses found equivalent in quality to accredited college real estate courses.

Licensees must disclose in advertising that they are performing acts requiring a real estate license, and must include their name, license number, NMLS unique identifier (if a mortgage loan originator), and responsible broker's identity on first-contact solicitation materials and purchase agreements.

• ✓All licensed-activity advertising must contain a designation disclosing the licensee is performing acts requiring a license
• ✓Name, license ID number, NMLS unique identifier (if MLO), and responsible broker's identity must appear on first-point-of-contact solicitation materials and purchase agreements
• ✓A licensee who legally changes their surname may continue using the former name for license business if both names are filed with the department
• ✓Exceptions exist for 'for sale/rent/lease/open house/directional' signs that either show only the responsible broker's identity or show no licensee ID

The officer designated by a corporate broker licensee (per Section 10211) is responsible for the supervision and control of activities conducted by officers and employees, including supervising salespersons licensed to the corporation. A corporate broker with additional broker-officers may, by board resolution, assign supervisory responsibility over salespersons to those broker-officers. A certified copy of any such resolution must be filed with the commissioner within five days after adoption or modification.

• ✓The designated corporate officer is responsible for supervising and controlling corporate licensed activity, including salespersons.
• ✓Supervisory responsibility may be assigned to broker-officers by board resolution, filed with the commissioner within five days.

Real estate brokerage involves agency directed, for compensation, primarily toward the sale, exchange, lease, rental, financing, or managing of real property or a business opportunity. The overall real estate business consists of the production, marketing, and financing of real property.

• ✓Brokerage requires an agency relationship conducted for compensation
• ✓Brokerage activities include sale, exchange, lease, rental, financing, or managing of real property or a business opportunity

A broker must exercise reasonable supervision over the activities of salespersons associated with the brokerage. This is a critical obligation distinct from ordinary selling because real estate practice involves complex, individualized products and professional service.

• ✓Reasonable supervision includes establishing policies, rules, procedures, and systems to review, oversee, inspect, and manage salesperson activities
• ✓The broker must be familiar with and fulfill many other legal requirements outlined by the Department of Real Estate
• ✓The licensee must be prepared to educate, coach, and counsel clients since real estate is usually the largest single purchase a buyer makes

Knowingly publishing, distributing, or aiding false statements about land or a subdivision offered for sale or lease is a public offense, and a licensee may face license suspension or revocation.

• ✓Punishable by a fine up to $1,000, up to one year in county jail, or both
• ✓A real estate licensee who violates this section is subject to a disciplinary hearing for suspension or revocation
• ✓The district attorney of each county prosecutes violations occurring in that county

A broker or salesperson using a digitally altered image in advertising for the sale of real property must disclose the alteration and provide access to the original unaltered image.

• ✓Advertisements with a digitally altered image must include a conspicuous statement disclosing the alteration plus a link/URL/QR code to the original unaltered image
• ✓A 'digitally altered image' is one changed via photo editing software or AI to add, remove, or change elements; it does not include common adjustments like lighting, cropping, color correction, or straightening that don't change the property's representation

Within one month after closing a transaction conveying real property (or a business with real/personal property) through a broker, the broker must give the buyer and seller written notice of the selling price. An escrow closing statement disclosing the information satisfies this duty.

• ✓Broker must provide written selling price information to both seller and purchaser within one month after closing
• ✓For an exchange, the information must describe the property and any added money consideration
• ✓An escrow-holder's closing statement revealing this information constitutes compliance

• A. The broker may give the funds directly to the seller or into escrow if the parties have agreed in writing and the funds are not commingled with the broker's own money. ✓ Answer
• B. The broker must always deposit the funds into the broker's trust account first before disbursing to escrow or the seller.
• C. The broker may hold the funds in cash in a locked safe at the office until close of escrow.
• D. The broker must forward all earnest money deposits to the DRE for safekeeping until escrow is opened.

• A. She must retake and pass the salesperson qualifying examination and pay the renewal fee, because a new four-year term requires re-demonstrating competency.
• B. She may wait to act until the DRE mails her the renewal form, because the license cannot expire until the Department has given written notice.
• C. She must submit the renewal fee together with evidence that she has completed the required continuing education, and her failure to receive a notice from the DRE does not excuse a late renewal. ✓ Answer
• D. She only needs to pay the renewal fee, because continuing education is required for broker renewals but not for salesperson renewals.

• A. The conviction is grounds for suspension or revocation of the license, but the DRE must still follow due process procedures before taking disciplinary action. ✓ Answer
• B. The license is automatically revoked upon entry of the criminal conviction without any DRE proceeding.
• C. The conviction is grounds for discipline only after the licensee has exhausted all criminal appeals.
• D. The DRE may only discipline the licensee after the conviction is at least one year old.

• A. The broker may be subject to DRE disciplinary action, including suspension or revocation of their broker license. ✓ Answer
• B. The salespersons' licenses are automatically suspended until written agreements are executed.
• C. The broker is only required to pay an administrative fine; no other disciplinary action is authorized.
• D. There is no regulatory consequence unless a client files a written complaint with the DRE.

• A. Work under and through a licensed real estate broker who has obtained a California Finance Lenders Law license or acts as a mortgage broker under the broker's real estate license authority. ✓ Answer
• B. Obtain a separate California Department of Financial Protection and Innovation (DFPI) license independently of any broker.
• C. Register directly with the Nationwide Multistate Licensing System (NMLS) as an independent mortgage loan originator without a supervising broker.
• D. No additional license or registration is required; a real estate salesperson license automatically authorizes mortgage loan origination.

• A. The DRE may discipline or deny renewal of a license based on pre-licensing conduct if that conduct would have been grounds for denial of the original application. ✓ Answer
• B. The DRE has no authority over conduct that occurred before the license was issued, as its jurisdiction begins on the date of licensure.
• C. The DRE may only consider pre-licensing conduct if a criminal conviction resulted from that conduct.
• D. The DRE may consider pre-licensing conduct only during the first renewal cycle and not thereafter.