If you are a real estate broker and have received a formal complaint or statement of issues, it could negatively impact your professional image and license. For this reason, you should seek a knowledgeable real estate license defense lawyer as soon as possible to receive professional legal guidance on what actions to take. At the Law Office of Sara L. Caplan, we have vast experience assisting real estate brokers in protecting their professional licenses.
We have legally represented many clients facing various claims before the California Department of Real Estate. Our team has also assisted clients who have been unsuccessful in applying for their real estate broker licenses while holding all of the necessary qualifications. Contact our Los Angeles law firm today for more information about our services.
Understanding Real Estate Brokers and Agents
The California Department of Real Estate (DRE) issues licenses and regulates real estate brokers and agents. Real estate brokers and agents play an important role in helping the general public acquire decent and proper homes.
Real Estate Brokers
Normally, real estate brokers use their money to purchase land to accrue interest and advertise it to prospective buyers. Although land is scarce, real estate agents allow the general public to access and buy it easily.
A real estate broker helps individuals legally transfer their real estate properties and negotiate lease and sale agreements. They also serve as intermediaries between buyers and sellers. Real estate brokers should guarantee that individuals or parties comply with the contractual conditions during transactions. In some cases, brokers could even handle some of the financing for the deal.
Some real estate brokers can supervise sales teams. Members of such groups could pose as brokers, but in reality, they're only advertising for the actual real estate broker. These members could violate different California real estate regulations, but the DRE can hold the licensed broker accountable.
A real estate broker should know all of California's real estate regulations. They should also stay up to date on the state of affairs of the local and federal economies to promote real estate holdings at affordable prices. Before closing a real estate deal, they need to assess its value and whether other experts involved in the transaction did a good job.
Brokers are subject to various allegations and possible legal actions due to their profession. Individuals can submit formal complaints or claims against them to the DRE.
Real Estate Agents
An agent connects buyers and sellers of a real estate property. The most common responsibilities of a real estate agent are market research and price negotiations. A real estate agent should confirm that transactions were executed legally and without fraud.
Real estate agents should be well-versed in real estate markets, people, and properties to excel in their work. Also, you should always be transparent and tactful with prospective investors. As a professional, your clients will trust you to guide them through many stressful and unpredictable situations. You should also understand that your clients could refer you, and your main objective is to provide them with a quality service that will allow you to thrive.
Aside from constantly communicating with buyers and sellers, agents have to deal with escrow officers, inspectors, appraisers, and other professionals involved in the transactions. The agents should also comprehensively understand each professional's tasks to avoid disrupting the flow of transactions.
Real estate agents should follow California real estate laws and regulations throughout the transaction. They should also act in their client's best interests and provide correct and timely disclosure to each party.
The California Department of Real Estate (DRE)
The main goal of the California Department of Real Estate (DRE) is to safeguard citizens from fraud or financial harm in all real estate-related situations. To achieve its principal function, the board only grants real estate broker and agent licenses to competent individuals. It also implements real estate legislation to uphold industry standards, which it enforces through different disciplinary measures.
Real estate brokers and agents can face formal disciplinary action for the following violations:
- Operating without a valid professional license
- Being probed for a real estate offense by a licensing department from another jurisdiction or a California-based organization
- Exceeding the required level of your license or expertise
- Engaging in criminal activity after obtaining your license or concealing any prior convictions, whether misdemeanor or felony, during the licensing application process
- Unprofessional conduct
- Failure to oversee assistants working under you
- Providing clients with false information or misleading reports regarding important facts that could affect their ability to make a sound decision
- Failing to maintain accurate records of the trust proceeds
The list comprises some of the most commonly reported complaints against California real estate professionals. Realtors could also be subject to more allegations. The California DRE imposes the following disciplinary actions on real estate brokers and agents:
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Public or Private Letters of Reprimand
These could ruin your image and prevent you from acquiring new clients or being recruited.
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Refrain and Cease Orders
It's only a written order telling you to cease repeating the accusation, and it's the least severe disciplinary action available.
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Administrative Fines
Fines can vary depending on the nature and severity of the complaint.
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License Suspension or Revocation
If your professional license is under suspension, you will not practice for a specified period. However, if the DRE revokes the license, you will be unable to practice indefinitely.
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License probation coupled with a revocation stay
You could be required to serve a probationary period during which you should comply with certain stringent conditions for your professional license to be canceled.
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Civil or Criminal Penalties
If the complaints include a civil or crime, the DRE could file charges in court against you in addition to administrative disciplinary measures.
The California DRE's Disciplinary Process
Members of the general public often submit complaints to the California DRE regarding certified licensees. The Department could also launch an investigation if it learns that you have any prior convictions for crimes or complaints.
Usually, the DRE considers most of these accusations as "unmerited." However, the DRE could reject some of the complaints not because they lack merit but because there's insufficient proof against the real estate licensees. Sometimes, the DRE can launch a thorough and lengthy investigation process.
The California DRE can inform you that the agency has initiated an inquiry against you by issuing you an 'investigation notice' via postal mail. In some situations, the agency will proceed discreetly, and you could be unaware that they are watching your activity, especially if they suspect you of tampering with evidence.
You can also receive an audit notification from DRE regarding the citation or company procedures. If you or a loved one is under investigation for a specific claim, you should immediately contact a competent real estate license defense lawyer.
If a DRE investigator contacts you, contact your professional license defense attorney before engaging them. This way, you will not unintentionally incriminate yourself or limit the arguments you can use. You must continue cooperating with the DRE to prevent additional administrative penalties during the inquiry. However, you can stay silent and request that a legal representative speak.
The California DRE could, at times, impose an interim license suspension. The primary goal of a temporary ban is to prevent you from engaging in real estate practice, allowing investigators to gather sufficient proof. You should challenge this temporary suspension because the investigation could take several months or years, putting you out of work for an extended period.
When the DRE determines you have questions to answer, they will present you with a formal allegation, which includes a statement of concerns. The statement contains a full breakdown of the complaints brought against you. You could provide a defense notification in response to the allegations.
Your professional license defense lawyer can assist you in obtaining a negotiated deal or discharge even before your administrative hearing. In such cases, a formal hearing could be unnecessary. Your professional license defense lawyer will thoroughly prepare for the official hearing to defend you effectively. They will submit mitigating and exculpatory evidence that can assist you in resolving your case while discrediting the prosecution's allegations.
When faced with overwhelming evidence, your lawyer will work to have the Department impose the least possible penalties so that you can keep your real estate license and resume practicing real estate.
How Criminal Charges and Convictions Can Cause You to Lose Your Real Estate License
According to the Business and Professions Code (BPC) 10186.2, a real estate broker charged with a felony or misdemeanor has to inform the California DRE of the allegations. Additionally, you must notify the department of all sentences and any disciplinary actions imposed by other governmental and non-governmental agencies. You should submit these notices in writing and send them within 30 days after the incident.
The California DRE could discipline you for any charge or conviction significantly relevant to your credentials or responsibilities as a real estate professional. Typically, the DRE takes a 'broad view' of what constitutes substantial relations.
Aside from the possibility of facing criminal charges, being accused of a felony or misdemeanor raises the risk of losing your professional license. Therefore, speaking with a real estate professional license defense attorney is in your best interest if you are facing criminal charges or have a conviction under your name.
Application Denials For Real Estate Licenses
To be qualified for a professional real estate license in California, you must meet the following conditions:
- Applicants should be 18 years of age or older
- Should finish the mandatory pre-licensing education program of 135 hours
- Hire a licensed real estate broker to supervise you for a set period
- Enroll and pass the salesperson license test
Submit the real estate license application, which involves fingerprinting, comprehensive background checks, fingerprinting, and payment of application fees.
The license application process can be hectic and time-consuming, taking several months. There is no assurance that the DRE will grant you a license to operate even if you apply successfully. The Department may deny your license for several reasons.
The most common causes include concealing the conviction, having a criminal record, operating as a real estate agent without a license, and having previously faced disciplinary action from another jurisdiction or federal body.
If the California DRE rejects your application, you can file a letter of appeal. The DRE would start the appeal process with a statement of claims once you initiate your appeal. The Department will send you a statement outlining the issues, and you have fifteen days to respond. You must respond within 15 days to be able to file an appeal against the denial of your license application.
The administrative hearing could be scheduled solely to decide whether the Department of Real Estate has enough evidence to reject your license application. You should seek the assistance of a knowledgeable license attorney before beginning the appeals process if your license application has been denied.
A legal professional understands what information to provide to the DRE to back up your license application and the possible results of the appeal. They will promptly settle the matter so you can resume practicing as a real estate broker.
What Kinds of Crimes Can Result in the Revocation of My Real Estate Professional License?
Real estate brokers and agents are subject to specific accepted practice standards, which can result in license suspension or revocation. However, most violations that could jeopardize your professional license may fall into the following categories:
- Financial misconduct. This includes improper money handling, sloppy bookkeeping, or improper commission payment/sharing
- Fraudulent activities. Any dishonest dealings with clients, coworkers, mortgage agents, or other organizations could result in the loss of your license. Some examples include false advertising, misrepresenting your credentials, or falsifying documents like mortgage fraud
- Failure to comply with applicable laws. Some examples of such violations include not keeping up with the requirements for continuing education, practicing real estate with an invalid license, working outside the limits of your professional license, violating client confidentiality laws, and the Fair Housing Act
Find a Los Angeles Real Estate License Defense Law Firm Near Me
At the Law Office of Sara L. Caplan in Los Angeles, we have all the resources necessary to support you in protecting your professional real estate license. We can help you build a strong defense and negotiate the best possible outcome so that you can continue practicing. To schedule a free consultation, contact us at 310-550-5877 today.