Real estate brokers and agents rely on their licenses to work and earn a living. However, the California Department of Real Estate has strict regulations that license holders must follow to protect the well-being of real estate customers. If you engage in an act that violates these rules, an investigation will be launched against you and can result in severe disciplinary action.

Before disciplinary action is imposed against your license, the Department of Real Estate will allow you to defend yourself. The disciplinary action might include license suspension or revocation and warning letters. You shouldn't take your case lightly if a complaint against you endangers your capacity to make money in real estate.

At Kern County License Attorney, we will offer the expert legal insight you need to fight the allegations against you and protect your real estate broker license in Kern County, CA.

The Role of Real Estate Brokers in California

Real estate brokers are qualified professionals who complete extra training and licensing requirements to function at a higher level than real estate agents. In real estate transactions, a broker can represent clients directly or appoint agents to work under them.

The process of becoming a real estate broker and receiving the necessary licensing to run a brokerage takes a lot of effort and has the following steps:

Meet the Minimum Requirements

Before receiving a real estate license in California, you must meet the following basic requirements: age, residence, and character. You must be eighteen before trying to be a broker in the state. Additionally, you must reside in California and disclose your criminal record.

Failure to disclose past convictions or different aspects of your criminal record can lead to the denial of your license application.

Complete Pre-licensing Education

In California, you must learn the basics of the real estate industry before you seek a broker license. This allows you to gain knowledge and be introduced to different aspects of the industry.

Pass the Real Estate Agent Licensing Exam

You must be a licensed realtor before becoming a broker. After completing the coursework, you will take a state-regulated examination to test your industry knowledge.

Gain Real Estate Experience

You must work as a real estate agent for a few years before becoming a real estate broker in California. This gives you experience and practical knowledge in the real estate industry.

Take the Broker Licensing Exam

When you meet the training and experience requirements, you must take a broker exam. This exam will cover advanced topics like brokerage management and ethical considerations in real estate deals. When you pass the broker exam, you will apply for your broker license and pay the necessary fees.

The roles of a licensed real estate broker include:

  • List and market properties available in the market

  • Show properties to potential clients

  • Give insights into market conditions and property value

  • Negotiate real estate deals for clients

  • Prepare and review real estate contracts

  • Coordinate the real estate contract's inspectors, lenders, and other parties involved

  • Hire and supervise real estate agents

Common Violations for Real Estate Brokers in California

When you receive your broker license from the California Department of Real Estate, you must follow specific regulations to maintain the industry's ethics. These rules aim to ensure the safety and well-being of property customers. The purpose of these regulations is to protect real estate clients' health and safety. Disciplinary action and an investigation by the real estate department may follow any of the following violations:

Breaching Client Confidentiality

As a real estate broker, your client will disclose much information about their financial standing. They may also submit sensitive documents needed to complete the real estate transaction. You must always protect the personal information you disclose to prevent it from reaching unauthorized hands.

If you disclose client information provided to you during a real estate transaction, you risk losing your broker license.

Failure to Supervise

When you receive your real estate broker license, you can work independently by representing clients and helping them find suitable property. Alternatively, you could hire real estate agents to work under you and offer their services to clients.

When representing clients in California real estate transactions, you must ensure that your agents are properly licensed and trained. Furthermore, you must ensure that all operations carried out by your organization or brokerage follow the real estate department's regulations.

Additionally, if you own a corporation or brokerage, you must ensure that all activities performed in the corporation align with the requirements of the real estate department. If misconduct occurs in the corporation you own or is done by an agent under your supervision, you could face disciplinary action.

Unlicensed Activity

You must always renew your real estate broker license, as the California Department of Real Estate requires. Additionally, you must ensure that all the agents who work under you have the required real estate licensing. It is a violation to pay or employ an unlicensed real estate agent to perform activities that require licensing. Such acts could result in fines and disciplinary action, like the suspension of your broker license.

Misrepresentation

Real estate brokers are responsible for transparency towards clients involved in real estate transactions. This means that you must provide correct and factual information about the purchase. You could be cited for a misrepresentation violation if you misrepresent material facts during a transaction requiring a real estate broker license.

Common forms of misrepresentation in real estate include the failure to disclose facts that a principal should know about a property and incorrectly portraying materials or facts in the transaction.

Trust fund violations

When you hold money for a client for a real estate transaction, you cannot combine the money with your personal or business funds. If you engage in such an act, you can be reported for a trust fund violation. Another way brokers commit trust fund violations is when they need to have appropriate real estate accounting knowledge and keep proper records. Such actions will result in disciplinary action and criminal conviction.

Unlawful Payment of Commissions

As a real estate broker, you may be responsible for dividing commissions from a real estate transaction among the real estate agents and other parties involved in the real estate transaction. Unlawful payment of commissions to unlicensed agents could result in a citation for a real estate violation.

Exceeding the Scope of the License

There is a limit to what a real estate broker can do in a real estate transaction. Therefore, you must always perform duties within your license's scope. Performing legal duties not allowed with your license could result in a citation for a real estate violation and disciplinary action.

Fraud in Real Estate Transactions

Fraud involves acts that cause undeserving financial benefits. If you engage in fraudulent transactions or allow the agents in your brokerage to perform fraudulent acts that cause loss for a client, you can be cited for real estate fraud.

Criminal Conviction

As a licensed real estate broker, a criminal conviction will result in incarceration and fines and can affect your license. You have the responsibility to disclose your conviction to the DRE. However, the department will be notified even if you do not disclose. You will not only land in jail for your conviction, but you can also lose your right to practice as a real estate broker.

Common Disciplinary Action Against Real Estate Brokers

If you are found to have committed the violations cited in your allegations, the Department of Real Estate can impose various disciplinary actions. The nature of the disciplinary action will vary depending on the severity of the violation you committed and the impact that your violation had on the real estate clients or other parties. Joint disciplinary action includes:

Administrative Fines

Depending on the severity of your real estate violation, the DRE can impose fines ranging from a few hundred to tens of thousands of dollars.

Public Reprimand

The Department of Real Estate can issue a public reprimand letter against you when you are found to have committed a minor violation. Although a public reprimand will not impair or restrict your license, it will remain online and can be accessed by individuals who perform a background check on you. This could ruin your reputation and

License Suspension

The DRE could suspend your broker license when you commit fairly severe violations. You cannot continue to make property transactions or offer your services to clients for a specific period of time. While you will still hold your license, you cannot use it until the suspension period elapses.

When your license is suspended, DRE imposes conditions you must follow. You can reinstate your license after the suspension period has elapsed and you have met all the imposed conditions.

License Revocation

The DRE can revoke your real estate broker license if you commit a severe violation. This means that you will no longer be authorized to practice real estate. Unlike a suspension, where the limit to practice is for a given period, revocation is a permanent decision.

Another reason your broker license could be revoked is when you have been cited for multiple violations or committed the violation while your license was on probation.

Probation

If your real estate broker license is placed on probation, you can continue to offer your services to clients in the real estate industry. However, the DRE will have some stipulations on where you can work and the scope of services you can offer. This could limit your opportunities.

Civil and Criminal Penalties

If your DRE violation involves a criminal or civil offense, the district attorney will file criminal charges against you. Common violations involving criminal acts are trust fund violations and real estate fraud. In this case, you will face criminal charges and can be convicted. A conviction for real estate fraud can see you spend up to three years in prison.

In addition to incarceration, the court may order you to pay restitution to the victims of your fraudulent acts.

Defending your License from the Department of Real Estate

In California, real estate disciplinary actions by the real estate department are public records, and potential or current clients can access them. This will ruin your career and your reputation in the industry.

When the DRE receives a notice or written complaint about your misconduct, they will launch an investigation. Sometimes, the investigation will be undercover, while other times, you will receive a notice of the inquiry by mail. When you receive this notification, you may contact the board and give your side of the story or attempt to defend yourself.

Unfortunately, the information you present to the board can be used in your license suspension or revocation hearing. Therefore, contacting a skilled licensed defense attorney as soon as you receive the notice would be best.

Your attorney will help you collect evidence of the allegations and build a solid defense to present at your disciplinary hearing. If, through the investigations, the DRE finds that the allegations against you are unmerited, the case can be dismissed. If there are grounds for the claims, a hearing will be held. Your attorney will help you prepare the documents and information for the hearing.

Find a Competent License Defense Attorney Near Me

Real estate brokers are licensed to work independently and can have some licensed agents working under them. You may be facing an investigation and potential disciplinary action by the Department of Real Estate for violating their code of conduct. This includes criminal conviction, real estate fraud, transacting without a license, and gross negligence in transactions.

When the allegations are brought against you, you must undergo due process to defend your license from disciplinary actions like revocation and suspension. You will benefit from our legal expertise at Kern County License Attorney if you risk losing your real estate broker license through revocation or suspension by the California Department of Real Estate in Kern County, CA.

Our skilled attorneys defend professionals from misconduct allegations when their professional license to practice in their field is threatened. Contact us at 805-702-8560 to discuss your case details.