Cal. Harbors and Navigation Code - HNC § 700. Section 700.
This article shall be known and may be cited as the Yacht and Ship Brokers Act.
ARTICLE 2. Yacht and Ship Brokers [700. - 740.]
Cal. Harbors and Navigation Code - HNC 2.
in effectCal. Harbors and Navigation Code - HNC § 701. Section 701.
Unless the context otherwise requires, the following definitions shall govern the construction of this article:
(a)
“Broker” means a person who, except as otherwise excluded by Section 710, for compensation or in expectation of compensation, does, or negotiates to do, one or more of the following acts for another or others:
(1)
Sells or offers to sell, buys or offers to buy, solicits or obtains listings of, or negotiates the purchase, sale, or exchange of yachts, and who does not own those yachts.
(2)
Leases or rents, offers to lease or rent, places for rent, solicits a listing of a yacht for rent, or negotiates the sale, purchase, or exchange of a lease on a yacht, for a rental or lease period of more than 90 consecutive days to any one person or business during any 12-month period, and who does not own that yacht.
(b)
“Salesman” refers to a natural person who, except as otherwise excluded by Section 710, for compensation or in expectation of compensation, is employed by a licensed broker to do one or more of the acts set forth in subdivision (a). The term includes “saleswoman” and “salesperson.”
(c)
“Yacht” or “ship” refers to any vessel 16 feet or more in length and under 300 gross tons used for navigating in water and designed to be propelled by machinery or sail.
Cal. Harbors and Navigation Code - HNC § 702. Section 702.
Except as otherwise provided by law, all records of the department relating to yacht brokers and yacht salesmen shall be open to inspection by the public during regular office hours.
Cal. Harbors and Navigation Code - HNC § 702.5. Section 702.5.
Any declaration, license, or other record electronically generated or transmitted pursuant to this article shall meet the requirements of a “record” under Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code.
Cal. Harbors and Navigation Code - HNC § 703. Section 703.
(a)
The director may, in accordance with the State Civil Service Act (commencing with Section 18500 of the Government Code), select, employ, and fix the compensation of such employees as may be necessary properly to administer this article, provided that no employee of the department shall have an interest for financial or other personal gain in the business of a licensed broker as director, stockholder, officer, member, agent, salesman, or employee.
(b)
The director may prescribe the duties of all employees.
(c)
The director may regulate and control the issuance, denial, suspension, and revocation, both temporary and permanent, of the licenses issued under this article.
(d)
The director may perform all other acts and duties necessary for the proper enforcement of this article.
(e)
The director may institute proceedings in any court of competent jurisdiction to enforce the provisions of this article by injunction or otherwise.
(f)
The director or any member of the department may administer oaths for the purpose of executing this article.
(g)
The director may prescribe rules and regulations to carry this article into effect in accordance with Chapter 4.5 (commencing with Section 11371) of Part 1 of Division 3 of Title 2 of the Government Code, and may authorize the department to establish branch offices in such other cities as may be necessary for the proper administration of this article.
Cal. Harbors and Navigation Code - HNC § 704. Section 704.
In accordance with the provisions of Section 82 of this code, the commission shall advise the department with respect to all matters relating to the administration of this act. The department shall submit any proposed regulations or changes in regulations pertaining to this act for review and comment by the commission prior to enactment.
Cal. Harbors and Navigation Code - HNC § 705. Section 705.
(a)
The director may adopt a seal and such other device for use by the department as it may desire, which may be used to authenticate all papers and documents required by this article which are under the control of the department.
(b)
Copies of all records and papers required by this article which are in the department’s office shall be received in evidence in all cases, when certified under the hand and seal of the department, equally and with like effect as the originals.
Cal. Harbors and Navigation Code - HNC § 706. Section 706.
The Attorney General shall act as the attorney for the department in all actions and proceedings pursuant to this article and shall render to the department opinions upon all questions of law arising under this article or in its administration.
Cal. Harbors and Navigation Code - HNC § 707. Section 707.
The division shall publish or cause to be published on or before July 1 of each year a directory of licensed brokers and salespersons and shall post the directory on its Internet Web site. The division may publish such additional information as it deems expedient and may also issue a periodical bulletin concerning affairs arising under the administration of this
article.
Cal. Harbors and Navigation Code - HNC § 708. Section 708.
(a)
No person shall engage in the business of, act in the capacity of, advertise as, or assume to act as a broker or salesperson within this state without first obtaining a license under this article to do so.
(b)
Only the person to whom a license is issued may perform or offer to perform any act subject to this article.
(c)
No fictitious name shall be used by a broker in the conduct of any business for which a license is required under this article, unless a license bearing that fictitious name has been issued to the broker.
(d)
The department shall not issue a license under a fictitious business name which is the same as or similar to the fictitious business name on a license previously issued and in effect.
Cal. Harbors and Navigation Code - HNC § 709. Section 709.
No licensed broker or licensed salesman shall practice any fraud or deceit or make any fraudulent or grossly negligent representation with respect to any act for which a license is required under this article.
Cal. Harbors and Navigation Code - HNC § 710. Section 710.
The definitions of “broker” and “salesperson,” as set forth in Section 701, do not include the following:
(a)
A person who directly performs any act subject to this article with reference to a yacht owned by that person or, in the case of a corporation which, through its regular officers receiving no special compensation therefor, performs any act subject to this article with reference to the corporation’s yacht.
(b)
Services rendered by an attorney at law in performing duties as an attorney at law.
(c)
Any receiver, trustee in bankruptcy, or other person acting under the order of any court.
(d)
Any transaction involving the sale of property subject to foreclosure of a security interest in a yacht which is conducted only by the holder of the security interest or by a person licensed pursuant to Chapter 11 (commencing with Section 7500) of Division 3 of the Business and Professions Code when liquidating repossessed collateral pursuant to the written request of the holder of the security interest.
(e)
Any transaction involving the sale, lease, or rental of a yacht in excess of 300 gross tons or tenders thereof sold at the same time.
(f)
Any transaction involving the sale, lease, or rental of a new yacht or ship.
(g)
Any transaction in the regular course of business by a wholesale motor vehicle auction subject to regulation by the Department of Motor Vehicles.
Cal. Harbors and Navigation Code - HNC § 711. Section 711.
No person engaged in the business or acting in the capacity of a licensed broker or salesman within this state shall bring or maintain any action in the courts of this state for the collection of compensation for the performance of any of the acts mentioned in this article without alleging and proving that he was a duly licensed broker or licensed salesman at the time the alleged cause of action arose.
Cal. Harbors and Navigation Code - HNC § 712. Section 712.
(a)
No licensed broker shall employ or compensate, directly or indirectly, any person for performing any of the acts within the scope of this article who is not a licensed broker or salesman licensed under the broker employing or compensating him or her, except that a licensed broker may pay a commission to a broker of another state or country.
(b)
No salesman shall accept compensation for performing any of the acts within the scope of this article from any person other than the broker under whom the salesman is at the time licensed.
(c)
No licensed salesman shall pay any compensation for performing any of the acts within the scope of this article to any broker licensed under this article, except through the licensed broker under whom the salesman is at the time licensed.
Cal. Harbors and Navigation Code - HNC § 713. Section 713.
Nothing contained in this article shall preclude a partnership from performing acts for which a broker’s license is required, provided every partner through whom the partnership so acts is a licensed broker.
Cal. Harbors and Navigation Code - HNC § 714. Section 714.
A licensed broker who accepts funds from others in connection with any transaction subject to this article who does not, as soon as possible, place those funds into a neutral escrow depository, shall place the funds into a trust fund account maintained by the broker in some bank or recognized depository and shall retain all the funds in the account until the broker makes a disbursement of the funds in accordance with written instructions from the person entrusting the money. The written instructions shall also set forth the specific purposes for which the broker may use money deposited with him or her. If the broker wishes to use money from the deposit for a purpose not included in the written instructions, the broker shall first obtain the written consent of the person entrusting the money specifically authorizing the use proposed by the broker for the money. The written consent may be given to the broker by a letter or facsimile. A separate record shall be maintained of all moneys received subject to this section and shall further indicate the disposition thereof. Any funds received by a licensed salesperson shall be delivered by the salesperson to the broker under whom the salesperson is at the time licensed.
As used in this section, “neutral escrow” means an escrow business conducted by a person licensed under Division 6 (commencing with Section 17000) of the Financial Code or by any person described by subdivision (a) or (c) of Section 17006 of the Financial Code.
Cal. Harbors and Navigation Code - HNC § 715. Section 715.
Within one month after the closing of a transaction in which title to a yacht is conveyed from a seller to a purchaser through a licensed broker, the licensee shall provide, or cause to be provided to the seller and purchaser, a closing statement in writing of the selling price thereof, including all charges and credits which shall be itemized, and in the event an exchange of yachts is involved, the information shall include a description of the yachts and amount of added money consideration, if any. The licensee shall affix his or her signature to the closing statement to attest to the facts provided in the closing statement. If the transaction is closed through escrow and the escrowholder renders a closing statement which reveals the information, that shall be deemed compliance with this section on the part of the licensed broker.
Cal. Harbors and Navigation Code - HNC § 716. Section 716.
(a)
No broker shall engage in any transaction for which a license is required under this article without first obtaining a signed written authorization to do so from the broker’s principal. An authorization to sell shall contain a description of the vessel, including the undocumented vessel’s registration number or the name, official number, and home port if the vessel is documented with a federal agency. The written authorization shall also state the type of listing, the gross listing price, the agreed upon commission or other compensation of the broker, and any repairs authorized to be made.
(b)
An offer to purchase shall contain the description of the yacht, including the undocumented vessel’s registration number or the name, official number, and home port if the vessel is documented with a federal agency. The written authorization to purchase shall also state the amount of deposit, terms of the sale, and any contingencies or conditions under which a deposit shall not be returned if the sale is not completed.
(c)
When a broker prepares, or there is prepared on behalf of a broker, a written authorization to sell or purchase, the broker shall deliver a copy of the written authorization to the person executing it. Receipt of the copy shall be made on the face of the original written authorization.
Cal. Harbors and Navigation Code - HNC § 717. Section 717.
Application for a license as a broker shall be made on forms prescribed by the department and shall be signed by the applicant. The application shall be accompanied by the broker license examination fee.
Cal. Harbors and Navigation Code - HNC § 718. Section 718.
Application for a license as a salesman shall be made on forms prescribed by the department and shall be signed by the applicant and by the employing broker. The application shall be accompanied by the salesman license examination fee.
Cal. Harbors and Navigation Code - HNC § 719. Section 719.
(a)
A person shall be deemed qualified to submit an application for a broker’s license if, as shown on the department’s records, the person meets all of the following requirements:
(1)
Is at least 18 years of age.
(2)
Has not been cited for a violation of this article within the preceding two years.
(3)
Possesses a working knowledge and understanding of the principles of the yacht brokerage business and profession.
(4)
Either has been employed within five years preceding his or her application as a California licensed salesperson for at least one year, has been licensed as a California broker within five years preceding his or her application, has owned and operated a marine business selling new or used yachts for a minimum of three continuous years, or has been employed as a broker or a yacht salesperson in another state where that employment was a primary occupation for a minimum of three continuous years immediately preceding application for a broker’s license in California. Proof of employment as a broker in another state or as an employee of a marine business selling new or used yachts in California shall be in the form of all of the following:
(A)
State, if applicable, and federal income tax returns, or a proof of earning statement made by the applicant under penalty of perjury, for the three-year period preceding the filing of the application in California.
(B)
If bonded, a statement issued by the applicant’s bonding company that no action has been taken against the bond for fraud or gross misrepresentation for the period for which the bond has been issued.
(C)
A copy of all business permits, issued by any state, county, or city agency, which, if applicable, includes the fictitious business name (“dba” or “doing business as”) under which the applicant conducted a yacht or ship brokerage business or a marine business selling new or used yachts in California for the three-year period preceding application for a California broker’s license.
(D)
If the applicant conducts a yacht or ship brokerage business in another state that requires broker or salesperson licensing, evidence of a current license issued by that state.
(b)
If the applicant is a partnership, then one of the partners of the applicant shall have the foregoing qualifications.
(c)
If the applicant is a corporation, then the officer or officers of the corporation to be designated for a license as provided in this article shall have the foregoing qualifications.
Cal. Harbors and Navigation Code - HNC § 720. Section 720.
The department may require proof as it deems advisable concerning the honesty, truthfulness, and good reputation of the applicant for a broker’s or salesperson’s license or of the officers of any corporation making application before the issuance of a broker’s license. For this purpose, the director may call a hearing in accordance with this article, and at the request of the applicant shall call a hearing.
Cal. Harbors and Navigation Code - HNC § 721. Section 721.
(a)
In addition to any proof of honesty, truthfulness, and good reputation required of any applicant for a broker’s license, the department shall ascertain by written examination that the applicant, and in case of a partnership or corporation applicant for a broker’s license that an officer or partner thereof through whom it proposes to act as a yacht broker, has all of the following:
(1)
Appropriate knowledge of the English language, including reading, writing, and spelling, and of arithmetical computations common to the yacht brokerage business.
(2)
An understanding of the principles of the yacht brokerage business and profession, including an understanding of a certificate of ownership, certificate of number, security agreement, bill of sale, and other documents required to register and number, and to transfer title of an undocumented vessel pursuant to the Vehicle Code.
(3)
An understanding that transfer of title of a documented vessel shall be performed in accordance with federal law as administered by the United States Coast Guard.
(4)
An understanding of maritime and admiralty liens with respect to vessels and the requirements of the Department of Transportation or other federal agency and the United States Coast Guard with respect to documentation, mortgaging, and transferring of title of documented vessels.
(5)
An understanding of agency contracts and of types and kinds of listings and deposit receipts with respect to vessels.
(6)
A general knowledge of equipment legally required on a yacht.
(7)
A general understanding of the obligations between principal and agent, and of the fiduciary relationship between them, and of business ethics pertaining to the business and profession of yacht brokers and yacht salespersons.
(8)
A general knowledge of yachts.
(b)
(1)
If an applicant fails to pass the required examination, the department shall so notify the applicant, may suggest further study, and, upon payment of the required fee, shall schedule a reexamination.
(2)
Notwithstanding paragraph (1), whenever an applicant fails to pass the written examination on the third attempt to do so, he or she shall be prohibited from retaking the examination for a period of six months from the date of taking the third examination.
Cal. Harbors and Navigation Code - HNC § 722. Section 722.
The license first issued to a broker shall be for a period of one year. Such license may be renewed for periods of two years upon filing of the required application and payment of the required fee.
Cal. Harbors and Navigation Code - HNC § 723. Section 723.
The license first issued to a salesman shall be for a period of one year. Such license may be renewed for periods of two years. Applicants for renewal of such licenses shall submit a recommendation of the broker who is to be his employer certifying that the applicant is honest, truthful, and of good reputation. The license of a salesman may be renewed upon filing the required application and payment of the renewal fee.
Cal. Harbors and Navigation Code - HNC § 724. Section 724.
(a)
An application on the form prescribed by the department for the renewal of a broker or salesman license shall be filed with the department prior to the last day of the period for which a previous license was issued, accompanied by the applicable renewal fee.
(b)
Every license not renewed in accordance with subdivision (a) shall expire at midnight of the last day of the period for which it was issued and shall immediately be returned to the department. The license may thereafter be reinstated only upon the filing of an application therefor, accompanied by the payment of the renewal fee required by this article, together with a penalty equal to 50 percent of the renewal fee. No examination shall be required for the reinstatement of a license which has expired solely for nonpayment of the renewal fee as required by this subdivision, subject to Section 726.
(c)
An application for the reinstatement of a license which has expired pursuant to subdivision (b) shall be executed under penalty of perjury. The department may refuse to grant reinstatement if the applicant, after the expiration of the license, has performed any act or participated in any transaction for which a license is required by this article or, during the period, has committed any offense or performed any act which would be cause for the suspension or revocation of a license under this article. However, the department shall not refuse to grant reinstatement unless written notice of the grounds of the refusal is mailed or delivered to the applicant.
(d)
A salesman’s license which expires other than pursuant to subdivision (b) and under conditions beyond the control of the salesman may be reinstated with another broker on payment of the transfer fee and the renewal fee if applicable and without penalty.
(e)
All fees charged and collected under this article shall be paid by the department at least once a month, accompanied by detailed statement, into the State Treasury to the credit of the Harbors and Watercraft Revolving Fund.
(f)
All fees charged and collected under this article and paid into the State Treasury are continuously appropriated to carry out the provisions of this article and shall be paid in the manner provided by law.
(g)
The department may establish a revolving fund in an amount that it may determine subject to the approval of the director.
Cal. Harbors and Navigation Code - HNC § 725. Section 725.
Temporary licenses may be issued to salespersons under the following conditions:
(a)
The licenses shall be issued for a period not to exceed 60 days and only one license shall be issued to each applicant.
(b)
An application shall be filed for a temporary license and for a permanent license and at the same time the applicant shall pay all the prescribed fees.
(c)
The application shall be in the form and upon the conditions required by the department as provided in this article with respect to a permanent salesperson’s license.
(d)
On or before the expiration date of the temporary license, the licensee shall take a written examination for a permanent license. If, without a valid excuse, the licensee fails to appear for the examination at the time prescribed, the examination fee shall be forfeited. In the event of failure to pass the required examination, the department shall notify the applicant, may suggest further study, and upon payment of fees, shall schedule a reexamination.
(e)
The applicant shall be at least 18 years of age.
Cal. Harbors and Navigation Code - HNC § 726. Section 726.
(a)
A person who fails to renew his license within two years after its expiration may not renew it pursuant to Section 724. Such person may apply and obtain a new license, in which case all of the provisions hereof shall apply as if such person were applying for a license for the first time.
(b)
In the event a salesman’s license expires only because that salesman procured a broker’s license or a broker’s license expires only because that broker procured a salesman’s license, either former license may be reinstated under the provisions of Section 724 within two years of the expiration of the latter license.
Cal. Harbors and Navigation Code - HNC § 727. Section 727.
The department may issue a certificate of convenience to the executor or administrator of the estate of a deceased broker, or if no executor or administrator has been appointed, and until a certified copy of an order making such appointment is filed with the department, to the widow or other heir otherwise entitled to conduct the business of the deceased, permitting such person to act as a broker in the conduct of the business of the estate for a period of 90 days from and after the date of death pending, but not later than, disposal of the business unless such person qualifies by examination for and obtains a permanent broker’s license. The department may extend the certificate of convenience beyond the 90 days on the showing of a just and reasonable cause.
Cal. Harbors and Navigation Code - HNC § 728. Section 728.
(a)
Every license issued to a corporation entitles one officer thereof on behalf of the corporation to engage in the business of broker without the payment of any further fee and such officer shall be designated in the application of the corporation for a license. When a broker’s license is issued to a corporation, if it desires any of its officers other than the officer designated by it in the application as provided in this section to act under its license as a broker, it shall procure an additional broker’s license to so employ each of such additional officers. For each officer other than the officer so designated through whom the corporation engages in the business of broker, the appropriate original or renewal fee shall be paid in addition to the fee paid by the corporation.
(b)
Each officer of a corporation through whom it is licensed to act as a broker is, while so employed under such license, a licensed yacht broker, but licensed only to act as such for and on behalf of the corporation as an officer.
(c)
An officer of a corporation licensed to act as a broker on behalf of the corporation who desires also to act as a broker or salesman under this article on his own behalf shall procure a separate license in accordance with the provisions of this article.
(d)
The department may deny, suspend, or revoke the broker’s license of a corporation as to any officer acting under its license without revoking the license of the corporation. Every corporation making application for a license under this article shall furnish the department with a resolution of its board of directors giving the name of the officer or officers who shall act for and on behalf of the corporation.
(e)
Every corporation licensed under the provisions of this article may by resolution of its board of directors substitute another officer for the one named in the corporation license, provided the person to be substituted qualifies as provided for in this article for a broker’s license and the corporation pays the appropriate original, renewal, or transfer fee as set forth in this article.
Cal. Harbors and Navigation Code - HNC § 729. Section 729.
(a)
Every license issued to a partnership entitles one partner thereof on behalf of the partnership to engage in the business of yacht broker without the payment of any further fee and such partner shall be designated in the application of the partnership for a license.
(b)
When a broker’s license is issued to a partnership, if the partnership desires any partner or partners other than the partner designated by it as provided in this section to act under its license as a broker, the partnership shall procure an additional broker’s license for each of such additional partner or partners. For each partner other than the partner designated through whom the partnership engages in the business of yacht broker, the appropriate original or renewal fee shall be paid in addition to the fee paid by the partnership.
(c)
Each partner of a partnership is licensed to act as a broker while such a partner under such license is a licensed broker, but is licensed only to act as such for and on behalf of the partnership.
(d)
A partner of a partnership licensed to act as a broker on behalf of the partnership who desires also to act as a broker or salesman under this article on the partner’s own behalf shall procure a separate license in accordance with the provisions of this article.
(e)
The department may deny, suspend, or revoke the broker’s license of a partnership as to any partner acting under its license without revoking the license of the partnership.
(f)
Every partnership making an application for a license under this article shall set forth in the application the name of the partner who is to act under the license for and on behalf of the partnership.
(g)
Every partnership licensed under the provisions of this article may substitute another partner for the one named in the partnership license provided the person to be substituted qualifies as provided for in this article for a broker’s license and the partnership pays the appropriate original, renewal, or transfer fee as set forth in this article.
Cal. Harbors and Navigation Code - HNC § 729.5. Section 729.5.
(a)
Any limited liability company licensed by the department as a yacht broker on July 1, 2001, in order to continue to be licensed after that date, shall apply to the department in the form of an individual, partnership, or corporation for a broker’s license on or before the expiration date of its existing license.
(b)
On or before February 1, 2001, the department shall provide notice of the requirements imposed by subdivision (a) to any limited liability company licensed by the department.
Cal. Harbors and Navigation Code - HNC § 730. Section 730.
(a)
Before any broker’s license shall be issued or renewed by the department for any applicant, the applicant shall procure, file, and maintain with the department a good and sufficient bond in the amount of fifteen thousand dollars ($15,000) with a corporate surety duly licensed to do business within the State of California, and conditioned that the applicant shall not practice any fraud or deceit or make any fraudulent or grossly negligent representations that will cause a monetary loss to any person for whom the broker acts under this article.
(b)
If any person suffers any loss or damage by reason of any fraud or deceit practiced on that person or any fraudulent or grossly negligent representation made to that person by a licensed broker or the broker’s sales personnel acting for the broker on the broker’s behalf or within the scope of the employment of the sales personnel, which fraud, deceit, or fraudulent or grossly negligent representation is practiced or made with respect to any act of the broker or the sales personnel for which a license is required under this article, that person has a right of action against the broker, the sales personnel, the surety upon the broker’s bond, or the deposit held by the department in accordance with Section 731. If any action is commenced upon the bond, the surety thereunder and the licensed yacht broker with respect to whom the bond has been issued shall immediately notify the department of the action.
(c)
If an action is commenced on the bond of a licensed broker, the department may require the filing of an additional bond, and immediately upon the recovery in any action on the bond, the broker described therein shall file a new bond. Failure to file an additional bond within 15 days after notification that an additional bond is required by reason of action against the bond or after recovery on a bond constitutes a failure to comply with this article, in which case the license of the licensed broker whose bond has been canceled or on whose bond recovery has been made may be suspended.
(d)
If a broker’s bond is canceled for a reason other than an action being commenced upon it, a new bond shall be filed by the broker. Failure to file a new bond within 30 days after notification that a new bond is required because a previous bond has been canceled constitutes a failure to comply with this article, in which case the license of the licensed broker whose bond has been canceled may be suspended.
Cal. Harbors and Navigation Code - HNC § 731. Section 731.
(a)
A cash deposit given instead of the bond required by Section 730 shall be held by the department during the life of the license and for a period of four years after the expiration of the license.
(b)
If an action is commenced on the cash deposit of a licensed broker pursuant to subdivision (a), the department may require the filing of an additional cash deposit, and immediately, upon the recovery in any action on the deposit, the broker described therein shall file a new cash deposit, equal to the amount specified in the action or recovery, but no greater than the amount specified in subdivision (a) of Section 730, whichever is less. Failure to file an additional cash deposit within 30 days after notification that an additional cash deposit is required by reason of an action filed against the cash deposit, or after the recovery on a cash deposit, shall constitute a failure to comply with this article, in which case the department may suspend the license of the licensed broker whose cash deposit has been acted on, or where a cash deposit recovery has been made.
Cal. Harbors and Navigation Code - HNC § 732. Section 732.
The department may deny an application or temporarily suspend or permanently revoke the license of a broker or a salesperson at any time if the licensee, while a broker or salesperson, in performing or attempting to perform any of the acts within the scope of this article, has committed any of the following acts:
(a)
Makes any substantial misrepresentation, including a false advertisement or an omission of relevant facts upon which any person has relied.
(b)
Makes a false warranty of a character likely to influence, persuade, or induce any person with whom business is transacted under this article.
(c)
Engages in a continued and flagrant course of misrepresentation or makes false warranties whether or not relied upon by another person.
(d)
Acts for the buyer and seller in a transaction without full disclosure of that fact to the buyer and seller and their written consent, except in the case where the selling broker is not the listing broker.
(e)
Commingles the money or other property of his or her principal with that of his or her own or uses it for any purpose other than that for which it was entrusted, when the yacht involved in the transaction is not his or her own.
(f)
Disburses or uses entrusted money for purposes other than those specifically authorized by Section 714.
(g)
Uses coercive or oppressive methods for the purpose of obtaining business or of procuring a listing or participating in a transaction.
(h)
Quotes prices different from the gross listing prices without the consent of the seller.
(i)
Engages in any other conduct constituting fraud or dishonest dealings, either with respect to his or her principal or other persons.
(j)
Permits his or her name to be used for the purpose of assisting any person who is not a licensed broker or salesperson to evade this article.
(k)
Demonstrates negligence or incompetence in performing any act for which he or she is required to hold a license.
(
l
)
As a broker licensee, fails to exercise reasonable supervision over the activities of his or her salespersons, or, as the person designated by a corporate or partnership licensee, fails to exercise reasonable supervision and control over the activities of the corporation or partnership for which a yacht and ship broker’s license is required.
(m)
Fails to act in accordance with, or disregards, his or her fiduciary duty toward a principal.
(n)
Violates any provisions of Section 708, 712, 714, 715, 716, 730, or 731, or the rules and regulations of the department implementing this article.
Cal. Harbors and Navigation Code - HNC § 733. Section 733.
The department may deny an application or may suspend or revoke the license of a yacht broker or yacht salesperson who, within four years immediately preceding, has committed any of the following acts:
(a)
Has procured a license under this article for himself or herself or another by fraud, misrepresentation, or deceit.
(b)
Has been convicted of a felony or any crime involving moral turpitude.
(c)
Has withheld information from the department that he or she at any time has been convicted of a felony or any crime involving moral turpitude.
(d)
Knowingly authorizes, directs, connives, or aids in the publication, advertisement, distribution, or circulation of any material false statements or misrepresentation concerning his or her business or any transaction under this article.
(e)
Has acted or conducted himself or herself in a manner that would warrant the denial of his or her application for a broker’s or salesperson’s license pursuant to Section 720.
Cal. Harbors and Navigation Code - HNC § 733.5. Section 733.5.
(a)
The division shall require an applicant for a yacht and ship broker or salesperson license, as those terms are defined in Section 701, to undergo a fingerprint-based state and national criminal history background check.
(b)
The division shall submit to the Department of Justice fingerprint images and related information for individuals specified in subdivision (a) who are subject to a state and national criminal history background check, pursuant to subdivision (u) of Section 11105 of the Penal Code. The Department of Justice shall provide a state- and federal-level response pursuant to subdivision (p) of Section 11105 of the Penal Code.
Cal. Harbors and Navigation Code - HNC § 734. Section 734.
(a)
The department shall not deny, suspend, or revoke a license granted under this article without a hearing, except the department may suspend a license without a hearing for failure of a broker to maintain a bond as specified in subdivision (d) of Section 730, or for failure of a broker to make available to the department, for inspection, any records, as set forth in Section 735.1.
(b)
The department may upon its own motion, and shall upon the verified written complaint of any person which sets forth facts which could be grounds for the denial, suspension, or revocation of a license pursuant to this article, investigate the actions of any broker or salesman whether or not licensed.
(c)
The suspension, expiration, or revocation by operation of law of a license issued by the department, or its surrender, whether voluntary or not, does not deprive the department of its authority, during the period in which the license may be renewed, reinstated, or reissued, to institute or continue a disciplinary proceeding against the licensee upon any ground provided by law, to enter an order suspending or revoking the license, or to take any action against the licensee on any other ground provided by law.
(d)
A broker whose license has been suspended pursuant to subdivision (a) for failure to make records available to the department for inspection, may request that an expedited hearing be held within 30 days of the suspension before an administrative law judge to appeal the suspension. Upon a showing of good cause to reinstate the license, the broker’s license shall be reinstated. If no good cause is found, the broker’s license may be revoked.
(e)
(1)
Except as otherwise provided by law, in any order issued in resolution of a disciplinary proceeding under this article, the department may request the administrative law judge to direct a licensee found to have committed a violation or violations of this article to pay a sum not to exceed the reasonable costs of the investigation, prosecution, and enforcement of the case.
For purposes of this paragraph, “reasonable costs” shall include, but not be limited to, all of the following:
(A)
Attorney, paralegal, and investigator fees and costs, including salary, travel, and other expenses attributable to hours expended on the case by employees of the office of the Attorney General and the department.
(B)
Witness fees, travel, and other expenses paid to or in connection with witnesses to facilitate their attendance and testimony at the disciplinary proceeding or to facilitate their appearance at a deposition, by video or by other means.
(C)
Fees and costs attributable to expert review, including, but not limited to, laboratory analysis, physical examination, and psychological examination, whether by an independent expert or a staff member of the department.
(D)
Administrative expenses attributable to case preparation and presentation, including, but not limited to, exhibit preparation and document copying, postage, telephone calls, word processing, whether by an independent contractor or a staff member of the department, and costs for obtaining certified public documents.
(2)
In the case of a disciplined licensee that is a corporation or a partnership, the order may be made against the licensed corporate entity or licensed partnership.
(3)
A declaration under penalty of perjury of the actual costs, or a good faith estimate of costs if the actual costs are not available, signed by the director, and containing sufficient information by which the administrative law judge can determine the costs incurred in connection with the matter and the reasonableness of the costs, shall be prima facie evidence of reasonable costs of investigation, prosecution, and enforcement of the case.
(4)
The administrative law judge shall make a proposed finding of the amount of reasonable costs of investigation and prosecution of the case when requested pursuant to paragraph (1). The department may reduce or eliminate the award of any costs by the administrative law judge, and may request the administrative law judge to reconsider his or her decision if the proposed decision does not make a finding on costs as requested pursuant to paragraph (1).
(5)
Where an order for recovery of costs is made and timely payment is not made as directed, the department may enforce the order for repayment in any appropriate court. This right of enforcement shall be in addition to any other rights the department may have as to any licensee to pay costs.
(6)
In any action for recovery of costs, proof of the department’s decision shall be conclusive proof of the validity of the order of payment and the terms for payment.
(7)
The department shall not renew or reinstate the license of any licensee who does not pay all of the costs ordered under this section.
(8)
All costs recovered under this section shall be considered a reimbursement for costs incurred and shall be deposited in the Harbors and Watercraft Revolving Fund.
(9)
Nothing in this section shall preclude the department from including the recovery of the costs of investigation, prosecution, and enforcement of a case in any stipulated settlement.
Cal. Harbors and Navigation Code - HNC § 735. Section 735.
(a)
Every broker shall maintain a definite place of business in this state as his principal office and may establish other branch offices throughout the state. Every broker maintaining more than one place of business within this state shall procure an additional license for every branch office maintained by him. Every broker shall keep the department informed at all times of the address of his principal and branch offices and any changes of address.
(b)
Every broker’s license shall be prominently displayed in the broker’s principal office. The license for each branch office, if any, of such broker shall be prominently displayed in such branch office. Every salesman’s license shall be prominently displayed in the principal office or branch office of the broker in which the business of such salesman is transacted. When a broker or any branch office to which a license was issued, for any reason ceases to be licensed, or when there is a name or address change, such license shall be immediately returned to the department.
(c)
Every salesman’s license shall remain in the control of the broker by whom the salesman is employed until the license is canceled or until he leaves the employment of the broker. Immediately upon the salesman’s withdrawal from the employment of the broker, such broker shall return such salesman’s license to the department for cancellation and shall notify the department of the exact date of termination.
(d)
Upon the issuance of a license, a pocket card of such size, design, and content as may be determined by the department may be issued without charge to such licensee, which card shall be evidence that the licensee is duly licensed pursuant to this article. When any broker to whom a card is issued ceases for any reason to be licensed as a broker, the card issued to such broker shall be mailed or delivered by the broker to the department for cancellation. When any salesman to whom a card is issued ceases to be a salesman for any reason, the card issued to him shall be mailed or delivered to the department for cancellation.
Cal. Harbors and Navigation Code - HNC § 735.1. Section 735.1.
A licensed broker shall retain, for four years, copies of all listings, deposit receipts, canceled checks, trust records, and other documents executed or obtained by the broker in connection with a transaction for which a broker’s license is required. These records shall be made available to the department for inspection upon request. If the records have not been made available within 30 days of a request by the department, the department may subpoena the requested records. If the records have not been made available within 14 days from the requested day of production on the subpoena, and the director determines that the public may be at risk if the broker continues to be licensed, the department may suspend the broker’s license pursuant to Section 734.
Cal. Harbors and Navigation Code - HNC § 735.2. Section 735.2.
The department shall accept any electronic record or electronic or digital signature created, generated, sent, communicated, received, or stored by electronic means on or after January 1, 2000. A “digital signature” means a signature that complies with the regulations adopted by the Secretary of State relating to digital signatures.
Cal. Harbors and Navigation Code - HNC § 736. Section 736.
(a)
The division shall adopt regulations setting forth the fees to be charged and collected under this article. The fees shall be sufficient to reimburse the division for the reasonable costs of implementing this article.
(b)
A criminal records investigation fee shall be collected for both a salesperson’s and broker’s license in an amount determined by the Department of Justice, or by any
other state or federal custodian of criminal records from which the division has requested information concerning an applicant’s criminal record, not to exceed the amount needed to reimburse the division for conducting the criminal records investigation.
(c)
The following fees shall apply until such time that the
division adopts regulations pursuant to subdivision (a):
(1)
Two hundred dollars ($200) for each original broker’s license.
(2)
Seventy-five dollars ($75) per year for the renewal of an original broker’s license.
(3)
One hundred dollars ($100) for each original salesperson’s license.
(4)
Fifty dollars ($50) per year for the renewal of an original salesperson’s license.
(5)
Twenty-five dollars ($25) for a salesperson’s temporary license.
(6)
Twenty-five dollars ($25) for each license obtained by a broker
for a branch office and for each renewal thereof.
(7)
Ten dollars ($10) for each transfer of a salesperson’s license for each change of employment.
(8)
Ten dollars ($10) for each duplicate license.
(9)
Ten dollars ($10) for each substitution of a name in the license of a corporation or a partnership.
(10)
Ten dollars ($10) for the granting of each certificate of convenience under Section 727.
(11)
Twenty-five dollars ($25) for each examination.
Cal. Harbors and Navigation Code - HNC § 737. Section 737.
(a)
The proceedings and hearings under this article shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, including the right of judicial review as provided for in Section 11523 of the Government Code.
(b)
In addition to any other disciplinary action and in lieu of a separate action in civil court, the department, as part of a disciplinary hearing conducted by an administrative law judge, may impose a civil penalty as provided in Section 739.
Cal. Harbors and Navigation Code - HNC § 738. Section 738.
(a)
Each violation of a section or subdivision of a section of this article, excepting Section 709, is a misdemeanor punishable by a fine not exceeding one thousand dollars ($1,000), provided that a violation committed willfully and with knowledge of the provisions of the violated section or subdivision is punishable by a fine not exceeding one thousand dollars ($1,000), or by imprisonment in the county jail not exceeding one year, or by both that fine and imprisonment.
(b)
Each violation of Section 709 is a misdemeanor punishable by a fine not exceeding one thousand dollars ($1,000), or by imprisonment in the county jail not exceeding one year, or by both that fine and imprisonment.
Cal. Harbors and Navigation Code - HNC § 739. Section 739.
Any person who violates any provision of this article, or any regulation adopted pursuant to this article, is liable for a penalty in an amount not less than one hundred dollars ($100) and not to exceed one thousand five hundred dollars ($1,500) for each separate violation. The penalties provided in this section are in addition to the remedies or penalties available under all other laws of this state.
Every civil or administrative action brought under this article at the request of the director shall be brought by the Attorney General in the name of the people of the State of California, in any court of competent jurisdiction, or through the Office of Administrative Hearings pursuant to Section 737, except that, when the civil action is to be filed in a small claims court, the director may bring the action.
The amount of penalty that is assessed pursuant to this section on each count of violation shall be based upon the nature of the violation and the seriousness of the effect of the violation upon the implementation of the purposes and provisions of this article. Any sum that is recovered under this section shall be deposited in the State Treasury to the credit of the Harbors and Watercraft Revolving Fund.
Cal. Harbors and Navigation Code - HNC § 740. Section 740.
Any action taken in the enforcement of this article shall be commenced within three years of the department’s discovery of the facts constituting the grounds for that action.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026