Selling Businesses in California Requires a Real Estate License

Q: I am a Canadian presently in San Diego and am looking into getting involved in the buying and selling of businesses in this area. In Canada, as far as I know, we have no requirements for certification of business brokers. But a friend of mine in Minneapolis had to get his commercial real estate license to do this kind of work. I’m hoping you may be able to shed some light on this subject.

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A: You must be licensed by the Department of Real Estate before you can become a business broker. There is no special certification with the license, so either a commercial or residential salesperson’s license will qualify you in the eyes of the state to represent a business transaction in California.

This is not true in all states. For example, Illinois does not have a real estate license requirement for business brokers. But the trend clearly is to license business brokers or intermediaries. In some states, they are licensed under the department of corporations, but in California and most other states the license is obtained through the Department of Real Estate.

A prerequisite to taking the state real estate examination is taking a three-unit course called Principles of Real Estate. The course is offered at most community colleges. Once you complete it, you can apply to the Department of Real Estate in Sacramento to sit for the state examination. It is given every few weeks for a fee. Many people also take a weekend course designed to prepare them for the test.

--John Bates, President, National

Business Brokers, Lake Forest

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Q: How can I resolve a business conflict without having to file a lawsuit or winding up getting sued myself?

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A: A trained mediator can benefit any business or personal situation where a conflict is out of control and a person fears that they are going to end up in litigation. The trained mediator acts as a neutral party, with the goal of facilitating open communication between the people having the conflict.

Combatants often find out in mediation that there are underlying issues that give rise to certain feelings that are expressed verbally as a disagreement. With the help of a mediator, the parties realize what is motivating them to disagree and find more creative ways to resolve their differences.

The mediation process is less costly, time-consuming and devastating than litigation. But the greatest advantage is that the parties reach their own agreement with the help of the mediator. Taking part in a mediation does not mean you lose your right to seek legal redress in the court system should you be unable to reach agreement. All conversations and settlement discussions are confidential and may not be used as evidence should a court process follow.

Mediation services are provided for a fee through private mediators such as myself. The Los Angeles County Bar Assn. has a dispute resolution service that provides low-cost, limited-time-frame mediation through the use of volunteer attorneys. Before you choose a mediator, you should interview him or her and make sure you are able to relate to each other. Also, make sure the mediator is experienced and familiar with the legal issues that will arise during your mediation sessions. Before you go into mediation, you should decide what you want to get out of the process.

When you hire a mediator, he or she will contact the other person involved in the dispute and inform them that you would like to set up a discussion that hopefully will bring about a resolution to the conflict without litigation.

--Linda Bulmash

Attorney and co-founder

of Agreement Advocates

International, Encino

Send questions to Karen E. Klein, c/o the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016.