California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2 - Corporate Securities
Article 4 - Standards for the Exercise of the Commissioner's Authority
Subarticle 10 - Real Estate Programs
Fees-Compensation-Expenses
Section 260.140.113.3 - Compensation for Acquisition Services
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
Payment of an acquisition fee shall be reasonable and shall be payable only for services actually rendered and to be rendered directly or indirectly and subject to the following conditions:
(a) The total of all such compensation paid to everyone involved in the transaction by the program and/or any other person shall be deemed to be presumptively reasonable if it does not exceed the lesser of such compensation customarily charged in arms' length transactions by others rendering similar services as an ongoing public activity in the same geographical location and for comparable property or an amount equal to 18% of the gross proceeds of the offering. The acquisition fee to be paid to the sponsor shall be reduced to the extent that other real estate commissions, acquisition fees, finder's fees, or other similar fees or commissions are paid by any person in connection with the transaction. For purposes of this Section, gross proceeds of the offering shall include mandatory deferred payments only as such amounts are paid to the program.
(b) The limitation imposed in paragraph (a) of this Rule shall be applied separately to each acquisition, with the 18% maximum percentage computed on that portion of the proceeds (adjusted to include a pro rata amount of any organization and offering expenses) applicable to the property which is the subject of the transaction.
Within 30 days after completion of the last acquisition, the sponsor shall forward to the Commissioner a schedule, verified under penalty of perjury, reflecting:
(c) The sponsor shall set forth on the face of the prospectus the amount of all acquisition fees which may be paid. This amount shall be expressed in both absolute dollars and as a percentage of the gross proceeds of the offering and may, in addition, be expressed as a percentage of the purchase price of the property.
(d) The purchase price of the program's properties shall not exceed the appraised value of the properties.
1.
Amendment of subsection (c) filed 3-12-74; effective thirtieth day thereafter
(Register 74, No. 11).
2. Amendment filed 1-27-84; effective
thirtieth day thereafter (Register 84, No. 4).
3. Amendment filed
5-18-92; operative 6-17-92 (Register 92, No. 22).
4. Change without
regulatory effect amending subsection (b) filed 9-25-2002 pursuant to section
100, title 1, California Code of
Regulations (Register 2002, No. 39).
Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.
