Real estate involves tough decisions when individuals are purchasing and selling properties. Regrettably, some clients can be unhappy about transactions and file complaints against you. What might seem like an insignificant action or conduct can be misinterpreted, leading to the Department of Real Estate (DRE) questioning your competence to practice as a profession and imposing disciplinary measures. You will need experienced legal assistance as you proceed through the disciplinary process. Santa Cruz License Attorney can stand with you throughout the process and help determine the best legal strategy depending on your accusations and case facts.
Who are Real Estate Agents and Brokers? How to Obtain Professional Licenses
A real estate broker helps other citizens legally transfer property, negotiates leases/sales terms, arranges for financing, acts as a middleman between sellers and buyers, and ensures that every involved party adheres to contractual conditions. Some of the requirements for real estate brokers include the following:
- You should be more than eighteen years of age
- Have completed 360 hours of real estate coursework
- Have a four-year college degree with a minor or major in real estate or have worked for more than two (2) years as an agent for five years.
- Have passed background checks
Real estate agents are the connection between sellers and buyers, and their duties include market research, engaging in transactions, and negotiating. They also work with title officers, appraisers, and inspectors involved in transactions. As an agent, you must work under the supervision of a certified broker. To qualify, you must meet the following qualifications:
- Be above 18
- Have completed 135 hours of education
- Have passed background checks
- Have passed final exams
Becoming licensed requires money and time. An agent will pay approximately $515, while a broker will spend about $880.
After taking and passing your examination, you should apply to the licensing agency to acquire a professional license.
Understanding Who Regulates California Real Estate Agents
The California Department of Real Estate regulates over 450,000 real estate agents, including:
- Realtors
- Property brokers
- Agents
- Real estate marketing personnel
The DRE aims to safeguard the general public involved in real estate-related transactions. The board’s commissioner supervises professional licensees in compliance with California real estate regulations and laws.
Criminal convictions, including misdemeanors and felony convictions, can lead to disciplinary actions, including suspension or revocation of your license.
The board expects honesty. If it asks about your previous arrests and convictions, you should reveal the information instead of risking it finding the record through its background checks. The board will discipline you solely based on the fact that you attempted to conceal your criminal record.
Criminal Convictions that Trigger Disciplinary Action By the Department of Real Estate
Some of the convictions considered substantially related affect the following:
- Your qualifications
- The functioning of your real estate professional license
Substantially related criminal convictions could trigger DRE disciplinary measures against you.
The legal term conviction encompasses a guilty plea and guilty decision after the court enters judgment. The term also incorporates pleas of no contest or nolo contendere upon the entry of judgment.
As a licensee, the Department of Justice has your fingerprints on file. Upon your arrest, arraignment, and conviction for an offense, the DOJ will inform the licensing agency electronically. The California Department of Real Estate will then begin the screening procedure to establish whether:
- the offense is substantially related to your role as an agent or broker and
- if yes, whether it warrants further investigation
You must inform the board of any criminal complaints, indictments, or disciplinary actions against you. Failure to notify the department becomes another reason for disciplinary action.
What Substantially Related Means
Substantially related convictions cast doubt on the licensees’ ability to abide by and uphold their qualifications, functions, and duties as real estate agents or brokers.
The licensing agency reviews each conviction based on the facts and circumstances surrounding the case.
The board considers the cases involving the following substantially related:
- Controlled substances and alcohol abuse offenses
- Fraud
- Forgery
- Tax evasion
- Bribery
- Embezzlement
- Sex crimes
Previously, the licensing authority used to start disciplinary measures against licensees sentenced for crimes involving moral turpitude. Nevertheless, that has changed, and the legal test is whether crimes are substantially related to real estate licensees’ roles.
Does the DRE Take any Rehabilitation Following a Conviction into Consideration?
When determining the disciplinary action, the DRE will consider the licensee's rehabilitation from their criminal behavior.
The appropriate proof of rehabilitation can include the following:
- Paying restitution to your victim(s)
- The period that has elapsed since your conviction
- Expungement of your convictions
- Change of attitude
- Educational courses completed
- Rectifying questionable business conduct
- Community volunteering
- Discharge of your debts
- Change in business and social relationships
- Stable family life
- Expungement of any sex offender registration
How to Challenge Disciplinary Action Against Your Real Estate Professional License and Certification
You can challenge disciplinary measures against you through a hearing or a negotiated settlement.
Before initiating disciplinary measures, the licensing board should bring a formal complaint against the licensee. The formal complaint outlines the criminal acts or omission of crucial information that justifies discipline. Common violations that attract disciplinary measures include the following:
- Operating with a professional license
- Exceeding your expertise or license’s bounds
- Failing to supervise people under you
- Misrepresentation of clients’ critical factors involved in making decisions
- Engaging in real estate fraud
- Engaging in unprofessional behavior
- Being under investigation by another licensing agency, either in California or another state
- Failing to maintain good trust records
Allegations can trigger a board investigation. However, only serious allegations initiate investigations; the board dismisses unmerited complaints and those without adequate evidence.
Sometimes, the board uses a sting operation if contacting you could compromise the ability to gather enough evidence. Alternatively, you could receive a Notice of an audit of your practice or a Notice of Investigation.
After receiving notification of your accusation, you and your legal counsel could work on reaching a settlement with your licensing board to reduce the degree of disciplinary action against you.
If you fail to reach a negotiated settlement, you can defend yourself in real estate administrative proceedings presided over by an administrative law judge. In most cases, your attorney can assist you in resolving the disciplinary matter without the administrative hearing.
The Real Estate Hearing Process and Disciplinary Actions Taken
Administrative proceedings are scheduled at the OAH (Office of Administrative Hearings).
During the hearings, the DRE must substantiate the allegations or complaints with accurate and convincing proof.
If the board succeeds, the administrative law judge will suggest that the department impose disciplinary measures. The DRE could adopt this suggestion, reject it, or modify it.
The disciplinary actions that the board can impose include the following:
- Private or public letter of reprimand
- Issuing desist and refrain orders that require you to stop your alleged conduct
- Administrative fines, whose amount depends on the severity and nature of the crime
- Practice license revocation or suspension — A revocation stops you from practicing indefinitely, while a suspension lasts for a designated duration.
- Criminal or civil penalties
- Stay of revocation with license probation
You can appeal the Department of Real Estate verdict by petitioning the court.
If your licensing board revokes or suspends your professional license or you choose to surrender it, you can file a reinstatement petition a year following the disciplinary measures. Before reinstating your license, the licensing agency must determine that the move is in the general public interest.
What Does a Public Reprimand Mean to Your Professional License?
Your licensing board will issue a public reprimand if the complaint filed against you is minor. It is an alternative to other harsher disciplinary options, like license revocation, suspicion, or probation. It does not lead to limitations on your license and will not prevent you from practicing. Depending on your case circumstances, DRE could require you to complete coursework or pay fines as a penalty.
While the ALJ can recommend a harsher disciplinary measure during your administrative hearing, your defense attorney can aggressively convince the board to issue the public reprimand.
Do not think that a public reprimand is better than other disciplinary actions; it is public and can stay online for years. It could affect your practice, leading to client loss and future employment opportunities. Most autonomous people and companies from licensing agencies might view you differently if you have any degree of discipline on your record. Therefore, it is wise to consult an attorney if you are facing disciplinary action, mainly if you have been accused wrongly. Your attorney can ensure the board upholds your rights.
Is It Possible to Become Licensed with Criminal Records?
Factors influencing whether you can acquire a professional license include your alleged offense, aggravating factors, and when you were convicted.
The Department of Real Estate cannot refuse a license if an applicant has not been convicted of any crime within seven (7) years before your professional license application date. Nevertheless, if you have a conviction substantially related to the role as a broker or agent, then the DRE could decline your license application.
Keep in mind that the DRE could disapprove your license request if you have a conviction for the following crimes, irrespective of when your conviction took place:
- A California felony financial associated with real estate brokerage
- A conviction with mandatory sex offender registration for Tier III or Tier II sex crimes
- A serious California felony per Penal Code 1192.7, including rape, murder, kidnapping, forced sodomy, mayhem, and assault using a lethal weapon
Suppose the board refuses your license application because of your criminal history but fails to bring a Statement of Issues. In that case, you have sixty days to ask for an administrative hearing and request that the board reconsider your license application.
Types of Mandatory Disclosures That You Should Make to Your Licensing Agency
When applying for your license, you have to answer some questions, which include the following:
- Whether you have ever been mandated to fulfill sex offender registration obligations in any state
- Have you previously had your license application denied, or has the board ever suspended, restricted, or revoked your license, whether in Golden State or elsewhere?
- Do you have any pending disciplinary measures against your current professional license?
- Has any administrative board or professional agency in Golden State or another state ever instructed you to cease, refrain, or desist from acting or breaking the law, regulation, or citation due to breaking the professional standard of care or unprofessional wrongdoing?
Additionally, the Department of Real Estate will conduct a background search. Depending on the outcome, you could be asked to submit more details. Only underage minor convictions and sealed cases escape the board’s scrutiny through California Penal Code Section 1203.45 PC.
Suppose you presently possess a California DRE license. In this case, you should notify the department within thirty (30) days following a criminal complaint, indictment, or criminal felony conviction or if you are facing disciplinary measures from another professional licensing agency in Golden State or at the federal level.
Find a Tenacious Real Estate Professional License Defense Attorney Near Me
Being a licensed real estate agent or broker requires compliance with a set of responsibilities and standards of your practice as outlined by state laws and rules. Failure to act according to the standards is deemed professional misconduct and can lead to disciplinary measures, like revocation, suspension, probation, and public reprimand. You should take any complaint filed against you - even if the board deems it meritless- seriously. The sooner you seek legal representation, the sooner your lawyer can start preparing your defense, increasing your chances of safeguarding your livelihood and professional reputation. The legal team at Santa Cruz License Attorney understands the importance of handling cases with the utmost tact, caution, and discretion and knows what legal strategies work best with the board and which do not. We can review the complaint against you and recommend defense strategies, craft convincing responses to your complaint, negotiate with the DRE, and represent you in your administrative hearing before the licensing agency. Please contact us at 831-732-4390 to arrange your no-obligation, confidential initial consultation.
