CRE Industry Rallies, Helps Defeat Dual Agency Ban Bill (Video)

Currently, a list of 100 bills are working their way through the California legislative process that are being tracked by the California Business Properties Association because they likely are to have an impact in the commercial real estate industry. The importance of staying on top of legislative activities in Sacramento was no more evident than in 2017, when one of the many bills, AB 1059, was introduced.

“This year, we expect that list to grow to 400, when bill introduction deadline comes and goes,” said California Business Properties Association’s Matthew Hargrove, Senior Vice President of Governmental Affairs. “In March/April, we’ll prioritize. At that time, we will have a better sense of what the priorities are and which are the top on the list to support/oppose.”

The bill that originally attempted to ban dual agency in the State of California, AB 1059 (Gonzalez-Fletcher; D-San Diego), will not move forward this year with the passage of a legislative deadline last month. After many hours of working with the author and the Assembly Judiciary Committee on new language that moved away from the outright ban and sought to create an additional disclosure, consensus language was not achieved in time for the bill to move forward in 2017.

AIR CRE’s Executive Director Tim Hayes played an active role in tracking and raising the collective industry voice to help ensure legislators heard both sides. “You may not be aware of the active role we took this year in defending the California CRE industry against the AB 1059 bill, which among other things would have banned dual agency representation,” said Hayes. “Through our dedicated team’s efforts, especially Jason Jamison, AIR CRE board member and President of GM Properties, it resulted in an initial defeat in committee, before missing the legislative deadline in January. I can tell you those efforts truly made an impression on legislators.”

Starting in April 2017, AIR CRE worked with experts such as Jamison on several fronts to:
1. Educate and inform members about the critical issues of how this bill would affect the CRE industry;
2. Provide guidance on how to contact and lobby legislative representatives because it was important they heard from their constituents;
3. Lead an online petition, resulting in 2,500 signatures that AIR CRE presented to lawmakers.

Why was Defeating AB 1059 so important?

If enacted, the bill would have outlawed dual agency in all commercial real estate transactions. The implications were enormous for the CRE industry. “If AB 1059 were to have passed, it would have completely disrupted the CRE industry,” notes Hayes. “It would have likely put some brokers and sales people out of work, it may have even put some companies out of business, and the major firms would have faced a major decision – decide if they want to represent landlords, or if they only want to represent tenants.”

The bill proponents have been invited to participate in an ongoing real estate stakeholder group that is working on a measure to streamline and clarify several areas of real estate law, and this process could be an option to address any concerns with dual agency disclosures. Hargrove says, a large group of California Business Properties Association members with knowledge and experience of all sides of a transaction are working with the organization in Sacramento to try to come to consensus on language.

“We also are very appreciative of the fact that Assembly member Gonzalez Fletcher and members of the committee have taken our issues with the proposal under consideration, and have decided to give all parties more time to assess current law and work-out consensus-based language if any changes are indeed needed,” said Hargrove.

While AB 1059 is dead for the year, because the vehicle that carried it is dead, Hargrove notes, “ideas like this never go away, however, so it could come back. We don’t have any signs of that yet, so when and how I don’t know, but we read every version of every bill closely, and if and when it does come back, we will catch it.”

A lot of the future of a dual agency bill depends on if the author wants to take another run at it, as well as what proponents choose to do. “If they want to continue spending money and pushing this in the Legislature, it won’t be hard to get another legislator to assist,” said Hargrove.

He advises commercial real estate leaders to weigh-in and let legislators know what they think about these bills through involvement. “Be involved with AIR CRE, pay attention to the issues and how they will impact transactions, and reach out to your local assembly member and senator to talk to them about how CRE impacts the local economy,” said Hargrove. “Donate to candidates and talk to them about CRE issues.”

Now that the second half of the 2017-18 California legislative session has commenced, there is sure to be a flurry of bills introduced in Sacramento, especially in an election year. That activity merits attention. AIR CRE plans to monitor and advise which bills require the CRE industry to take action.