Real Estate Broker
The real estate industry is dynamic, and your real estate broker license is your gateway to a thriving career and great opportunities in this sector. Unfortunately, this career can be challenging, as formal complaints or statements of issues often threaten your professional license. At San Francisco License Attorney, we understand the statutes, rules, and steps involved in license defense, making us the most suitable to offer guidance and legal defense in these challenging times when your career and livelihood are threatened.
California Real Estate Department Mission
Previously called the Bureau of Real Estate (BRE), the California Department of Real Estate (DRE) was established in 1917 to safeguard the public from real estate financial fraud or harm. The agency achieves its mission by regulating the industry to ensure experts maintain the requisite high and ethical standards, licensing agents and brokers, and enforcing regulations by imposing disciplinary action.
DRE issues and renews licenses for real estate experts, including brokers and real estate agents. Besides, it lays down the conditions applicants must satisfy and maintain to obtain and keep a license.
Another primary role of the agency is consumer protection. It protects individuals transacting with the industry by investigating complaints against licensees and taking the requisite disciplinary measures when the accused are found guilty of the allegations.
Another role of DRE is enforcement. It initiates investigation and disciplinary measures on licensees who fall short of the industry standards.
Lastly, DRE ensures transparency and ethical behavior in real estate transactions by formulating and enforcing industry rules.
Responsibilities of Real Estate Agents and Brokers
DRE licenses both real estate agents and brokers. These professionals play crucial roles in the industry.
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Responsibilities of Real Estate Agents
If you hold an agent’s license from DRE, your primary responsibility is to link purchasers and sellers. You conduct market research, negotiate, and ensure real estate transactions are completed lawfully.
Understanding the people, market, and industry is not your only responsibility. Sometimes, you will be forced to deal with uncertain and tense circumstances. You are expected to handle them calmly because how you treat a client today determines if they will return or refer another customer.
Apart from interacting with purchasers and sellers, property appraisers, inspectors, and escrow officers will pay you visits. All these experts are crucial in the successful completion of a lawful transaction. Besides understanding your roles, you should know the duties of various professionals involved in a transaction.
Also, you must comply with all real estate regulations, ensure full disclosure, conduct timely transactions, and protect your customers' interests.
As a real estate agent, you provide valuable services and strive to meet the needs of your clients. Unfortunately, a tiny mistake can lead to an exaggerated accusation threatening your license. So, you require the services of a license defense attorney to protect your permit from wrongful suspension or revocation.
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Real Estate Brokers
Brokers assist individuals with lawful transfers of properties, negotiate lease or sale terms, link buyers and sellers, ensure adherence to contractual terms, and organize financing.
As a broker, you can even act as a sales manager, where your team members work under your patronage or with the backing of your professional license.
Again, you should understand the state’s real estate statutes. Besides, you must be updated on local, state, or national real estate economies and be diligent in evaluating the work of escrow officers, property appraisers, and inspectors.
With these responsibilities, you are susceptible to many lawsuits and even criminal charges that could jeopardize your DRE-issued license, hence the need for a licensure attorney to guide and defend you in your hour of need.
Common Violations that Lead to Disciplinary Proceedings and Measures
Licensees must maintain high standards of professionalism, ethical conduct, and competence. When, as a licensee, you fail to meet these standards, you risk harsh disciplinary action, including permit revocation. A revocation or termination is a severe penalty because if your reinstatement application is unsuccessful, you will be permanently barred from practicing.
The common violations that could attract disciplinary measures are:
- Engaging in fraud, such as misrepresenting property details, providing false information, or falsifying documents
- Misappropriating or mishandling property entrusted to you by clients
- Contravening your fiduciary duties like maintaining confidentiality, working in the client’s best interest, and divulging material information.
- Particular criminal convictions with a substantial relationship to your profession, like fraud and crimes of moral turpitude
- Professional misconduct like dishonesty, discrimination, and harassment
- Providing incorrect details to clients or any other form of negligence while performing professional duties
- Withholding material information regarding a property to a client, like defects that can potentially harm a client or cause financial losses
Evidence Collection and Records
When your license is threatened by DRE, the solidity of your arguments depends on the proof you can gather and supporting documents. DRE takes claims that can be substantiated seriously, so you must have accurate and precise records to show you did not engage in the alleged violation. The evidence you require includes:
- Communication records like emails, text, and written mail on the property transaction to show you were transparent, professional, and conducted yourself ethically.
- Maintain copies of listing contracts, purchase agreements, and property declarations signed by customers.
- Keeping correct financial transaction records like receipts, bank statements, and invoices to demonstrate how you handled money or commissions.
- Keep a log of communications with customers, like telephone calls and meeting notes
- Properly organize transaction paperwork from opening offers and closing statements
- Preserve any correspondence with other professionals in the transaction to support your actions or decisions.
- Maintain proper records of client disclosures regarding property conditions, material facts, and possible problems.
- Take and preserve pictures of property issues, repairs, and transaction disagreements.
- Maintain copies of your valid license, certification, and relevant industry affiliation
- Keep records of your advertising materials, like brochures and property listings, and ensure each represents accurate information on the property.
You should maintain hard copies of this evidence. Also, for evidence preservation purposes, you must maintain soft copies or duplicates of the proof using cloud storage to make it easy to retrieve if the hard copies are damaged. Defending your license with clear and proper evidence of your transactions or client engagements will be easy.
The Hearing and Administrative Process
DRE takes complaints or accusations from third parties against brokers. The licensing can also commence an investigation when the state reports an ongoing criminal proceeding or conviction with a substantial relationship to your license, adversely impacting your performance of broker responsibilities.
DRE dismisses many unmerited or unsubstantiated cases and only investigates severe cases. DRE investigators will likely contact you with questions about the accusations and your response. Also, they could send an investigation or audit notice. They do this to gather more information necessary to file formal accusations. Nevertheless, if the investigators believe contacting you could compromise their capacity to collect proof, they will conduct a sting operation.
When investigators contact you through a call or notice, you should not respond without first speaking to your attorney. You must cooperate with the investigators but should not do this at the expense of your assertions or defense. So, before responding to DRE, consult your attorney for guidance to avoid divulging incriminating details.
Depending on the severity of the allegations, the board could temporarily suspend the license pending investigations. The suspension will negatively impact your career, so have your attorney compel the court to lift it to allow you to practice until you are found to have engaged in a violation through an administrative proceeding.
If, after investigations, DRE is convinced they have a solid case against you, they will forward a formal accusation notice or statement stating your accusation and the grounds for the decision.
You will be given time to write and reply to the accusations. Hiring an attorney before or at this stage is recommended to ensure you file an answer on time and provide precise responses to each accusation the board raises. The board offers a designated timeline for the response. Failure to respond within the timeline results in a default decision and automatic license revocation; hence, there is a need for an attorney to ensure you meet these strict timelines.
Before the administrative proceeding, you and DRE will hold a settlement discussion to try to resolve the case through a negotiated settlement or case dismissal. However, when the opposing parties fail to arrive at a settlement, the case will proceed to a pre-hearing conference to examine procedural issues on the case, exchange details, and refine the issues.
Once you refine the issues of the hearing, the next step is to exchange evidence with the opposing side in the discovery stage. At this stage, parties exchange evidence.
You can introduce expert witnesses to testify in your favor or clarify complex matters and technical issues when necessary.
When the two parties cannot resolve the matter through a settlement hearing, DRE forwards the file to the Attorney General (AG), who schedules an administrative proceeding. The proceeding is like a court hearing, although it is presided over by an Administrative Law Judge (ALJ). Parties submit their arguments and evidence like in standard court hearings. They make opening statements, cross-examining witnesses, and closing remarks.
Once the hearing ends, the ALJ takes time to deliberate on the matter before making recommendations to DRE. The board then decides if it should adopt, modify, or reject the ALJ’s suggestions.
DRE’s verdict is not final. If unsatisfied, you can request a re-examination or legal action against the licensing board.
You must have an experienced attorney on your side throughout this procedure. Apart from providing legal guidance, an attorney will safeguard your rights, negotiate a favorable settlement, or defend you in the administrative proceeding for a fair verdict.
Possible Penalties
DRE can impose several penalties when there is compelling evidence of violating ethical standards and professional conduct. These disciplinary measures include:
- Levy fines whose amount depends on the accusation type and its impact
- A license withdrawal or suspension that momentarily bars for a given duration because of a serious violation or repeat offense
- License probation lets you continue practicing under strict terms like mandatory training and reporting.
- License termination or revocation results in total loss of license and is reserved for severe violations that harm the public, like fraud or fund misappropriation.
- Recovery fund payment if it is discovered your violation led to financial losses
- Mandatory continuing education programs as a condition for license reinstatement or continued practice
- Cease or desist injunctions that bar you from specific activities deemed violating real estate regulations.
- Administrative citation, which imposes fines without an administrative hearing
- A public or private reprimand is a written statement disapproving of your conduct. Whether private or public, reprimand severely damages your reputation.
- Requirement to submit regular reports or supervision to ensure compliance with DRE regulations
Effects of a Criminal Hearing or Guilty Verdict on your License
The Business and Professions Code 10186.2 obligates you to report any misdemeanor or felony charge to DRE. You should also report convictions and other disciplinary measures taken against you by other licensing authorities, state or federal. These incidents must be reported within 90 days of occurrence.
Reporting does not automatically mean the board will initiate a disciplinary proceeding against you. You can only face disciplinary action if the count or guilty verdict substantially relates to your license or qualifications as a broker. However, you must be careful and have legal representation because DRE takes a broader perspective on the definition of substantial relationship, meaning that a crime you assume has no substantial relationship could trigger disciplinary measures.
A criminal conviction also leads to legal penalties on top of the adverse impact on your professional license. Therefore, whenever you face a criminal charge as a DRE licensee, you must fight the allegations for a dismissal or not guilty verdict to prevent it from affecting your license.
Find a Competent Real Estate Broker License Defense Attorney Near Me
If you have been in the real estate industry for some time as a broker or agent, you have made a reputation for yourself, and business opportunities are coming your way. You want to preserve your career and grow your name in the industry, but a complaint filed against you with DRE can ruin your hard work and sacrifice. At San Francisco License Attorney, we understand the industry's challenges real estate agents and brokers face. Therefore, we will assist you through the defense process to file a defense notice, win a dismissal, negotiate a favorable settlement, overcome license application denial, win the administrative proceeding, or appeal an unfair verdict. Call us at 415-919-6594 to discuss your options.
