A successful real estate career demands devotion to ethical principles, knowledge, and hard work. But even the most careful broker could run into unanticipated difficulties. The California Department of Real Estate (DRE) could face dire repercussions from a baseless complaint. Although managing an official complaint procedure might be difficult, the DRE is essential to protecting customers. Minor conflicts or unjustified charges can be devastating for your reputation and licensing.

Remember, you are not immune to false claims. Unhappy customers, miscommunications, or even rivalries could lead to a complaint. Seek legal advice from an experienced professional license defense lawyer in these circumstances.

The experienced attorneys at San Diego License Attorney have the skills and background to negotiate the court system and defend your rights successfully. Our involvement could mean the difference between successfully resolving the problem and potentially disastrous ramifications for their careers.

Distinguishing a Real Estate Broker From a Real Estate Agent

For those new to the real estate market, it can be difficult to distinguish between brokers and agents. While both have crucial transaction facilitation functions, their licensing and oversight systems differ. While brokers have more advanced licenses that enable them to work freely and oversee teams of agents, agents are governed by salesperson licenses and work under the supervision of brokers.

Compared to agents, brokers are responsible for more. Certain brokers in California exhibit a greater understanding of the industry by actively participating in real estate deals. They negotiate agreements between buyers and sellers to expedite transactions and guarantee legal compliance throughout property transfers. Brokers can also help clients with finance.

Brokers also manage agent teams. The more agents on the team, the more the broker demonstrates a skill set that improves his/her reputation in the industry. To provide knowledgeable client counsel, brokers must be well-versed in California real estate regulations and updated on regional, state, and federal economic developments. Brokers also supervise the work of appraisers, loan officers, and other experts. This helps guarantee a flawless real estate experience.

Common Issues that Result in Allegations Filed With The California Department of Real Estate

The California Department of Real Estate receives several complaints. In most cases, the following are some of the issues the board could act on:

  1. Loan Modification and Foreclosure Violations

As a real estate broker, you should adhere to regulations when managing loan modifications or preventing foreclosure. The Department of Real Estate could launch investigations in the event of non-compliance. Typical missteps include:

  • Not having a current license
  • Taking upfront payments
  • Lying about credentials
  • Giving out misleading promises and
  • Using deceptive advertising

In addition to putting homes in danger, these acts erode confidence in the industry's integrity.

  1. Short Sale Transactions

A short sale occurs when a homeowner experiences financial troubles and sells their property for less than what they owe on the mortgage. Lenders authorize these deals to prevent foreclosure and reduce losses.

During short sales, real estate brokers are entrusted with a fiduciary duty to buyers and sellers. Any violation of this obligation could lead to disciplinary action. These include:

  • Withholding critical information or
  • Pursuing personal gain

  1. Unlicensed Prepaid Rental Listing Service Activities

Unlicensed persons risk harming landlords and tenants through deceptive advertising, erroneous listings, or improper financial management. In contrast, licensed professionals follow a code of ethics and undergo training to reduce these dangers.

Another issue is fair competition. Unlicensed services upset the level playing field created for licensed professionals who follow the rules. In addition, the state loses money from unpaid license payments, making it harder to supervise the sector properly.

The DRE has a public database of people and organizations penalized for providing unlicensed prepaid rental listing services. This record acts as an unmistakable disincentive to noncompliance.

  1. Subdivision Violations

California has tight laws regarding land development. The Department of Real Estate (DRE) keeps a "Subdivision Violations" section. It lists individuals and entities who have not complied with the Subdivided Lands Act, which protects buyers of partitioned land from deceptive or fraudulent acts.

The Subdivided Lands Act establishes precise rules for the land division to avoid fraud and guarantee that prospective buyers have correct information about the land they are contemplating buying. As a real estate broker, you should be aware that the DRE maintains a public record of infringers, which could include information about individual infractions. This openness encourages compliance and gives prospective buyers the information they need to make wise choices about purchasing subdivided land.

How the California Department of Real Estate Handles Complaints

The board investigates real estate licensing law infractions and evaluates brokers and agents accused of deceiving or scamming customers. If an inquiry reveals information that backs up a complaint, the board will schedule a formal hearing to determine whether you broke the law. Verified violations could have dire consequences.

Additionally, the DRE investigates complaints against subdividers who could have broken subdivision laws. In these situations, verifiable offenses can stop sales until problems are fixed, guaranteeing compliance and safeguarding prospective customers.

In addition to sanctions, the board offers a complaint resolution program for consumers with minor problems with real estate license holders. This program can settle disputes without requiring a formal investigation by encouraging mediation. This simplified method reduces interruptions and offers speedier results, which is advantageous to licensees and customers.

The board does not have the authority of a court of law despite its investigative authority and enforcement of regulations. Its incapacity to settle financial conflicts is a significant drawback. Refunds and damage awards are examples of financial remedies that the board cannot directly order. These matters are outside their jurisdiction. If necessary, the legal system must decide on suitable compensation. The board is also unable to terminate contracts. Legal action and a court verdict are required to resolve contractual conflicts, which frequently involve complex legal interpretations.

Disciplinary Actions The California Department of Real Estate Can Take

The California Department of Real Estate can impose a range of disciplinary actions to enforce professional standards. The severity of the penalty hinges on the specific violation. They include the following:

  1. Issuing a Reprimand

Reprimands are formal censures issued by the board. They aim to rectify licensee behavior and enforce professional standards. As a corrective action, reprimands stress the seriousness of the offense and the need for improvement while outlining the harmful conduct or behavior in detail. This formal notification reminds you of your professional obligations and underscores the potential consequences of non-compliance.

Even when reprimands do not entail more severe sanctions like fines or bans, they have significant consequences. They function as a warning. However, if they appear on the DRE website, they could negatively affect your reputation and make it more difficult for you to secure new clients or jobs. This gives license holders a powerful incentive to maintain professionalism and carefully follow set guidelines.

  1. Imposing Fines

The board levies fines as part of their disciplinary actions for your misconduct. The two primary goals of these fines are enforcement and deterrence. The particular violation determines how severe the fine will be. While minor violations could only result in small fines, more significant offenses could cause substantial penalties that amount to thousands of dollars.

The fine amount depends on several factors:

  • The severity of the violation — It is important to consider the gravity of your misconduct and the possible harm it caused or would have caused.
  • Prior disciplinary actions — If you have a history of misbehavior, you should expect a more severe punishment, which could include a higher fine.

On the other hand, when deciding on the proper fine, the board could consider mitigating factors like your remorse or corrective actions.

  1. License Action

The board could also target your license. These measures directly target your ability to practice, with the severity depending on the nature and seriousness of your violation. The California Department of Real Estate could suspend your license for a predetermined time if you engage in serious misconduct. This suspension prevents you from practicing and pauses your professional activities. It could harm your reputation. Clients seeking your services will not find you, casting doubt on your ability to resume practice smoothly once the suspension ends.

The board can revoke your license for the most grave violations. This revocation also carries a heavy reputational penalty. It ends your professional career in the sector. It is a harsh penalty reserved for situations that show the unsuitability of holding a license.

On the other hand, probation provides a route to possible redemption. The DRE permits you to maintain your license under certain restrictions, like finishing educational requirements or under supervisory supervision, instead of outright canceling it. By choosing this option, you can show the board that you have improved and win back their trust, eventually opening the door to your return to practice.

  1. Cease and Desist Orders

As a licensee, a Cease and Desist Order (CDO) from the California Department of Real Estate (DRE) is weighty. This formal order demands that you immediately stop an unlawful or unethical activity. These activities include offensively dealing with clients or businesses or engaging in unethical or illegal business practices like false advertising. The CDO will mention the specific rule or law you are accused of violating.

The order also strongly warns that the board knows and disapproves of your activities. The consequences of disobeying a CDO are likely more severe, including penalties, license suspension, or revocation.

California Real Estate License Reporting Requirements

As a real estate licensee, you are required by Business and Professions Code Section 10186.2 to self-report to the California Department of Real Estate. This provision guarantees that the DRE knows of any possible concerns affecting your capacity to maintain a real estate license.

You should report criminal charges within 30 days after filing any misdemeanor or criminal charges against you. The board will then evaluate the potential impact on your professional standing. Additionally, you have thirty days to notify the board of any criminal convictions, no matter the severity of the conviction.

The reporting obligation extends beyond crimes. It includes disciplinary proceedings and outcomes from other licensing organizations. These include proceedings that other states, federal authorities, or Californian licensing organizations may have taken against you. The board uses the information from these reports to develop a detailed picture of your professional behavior.

The board can only impose discipline if the offense is "substantially related" to your professional activities, even though you must report any criminal accusations and convictions within 30 days. There are nuances to this requirement. The board has a broad definition of "substantial relation." Even offenses that seem unrelated could lead to disciplinary action if they raise concerns about your trustworthiness or ability to perform your professional duties.

Crimes substantially related to your profession include financial crimes, fraud, dishonesty, and some violent crimes.

As a real estate licensee, a three-year statute of limitations protects you from practice-related accusations. The California Department of Real Estate has limited time to take disciplinary action. Filing complaints more than three years after the claimed occurrence will likely result in their dismissal, seriously undermining the DRE's case.

Find a Professional License Defense Attorney Near Me

A real estate broker's career could suffer immensely from accusations of misconduct. In this field, trust is fundamental, and even unsubstantiated assertions can have a cascade of unfavorable effects. These include damaged reputations, lost business, and license suspension or revocation due to board investigations, which would drastically restrict your capacity to practice.

Thankfully, you have some viable options. An experienced professional real estate license defense attorney can handle the intricacies of license defense.

Look no further than the San Diego License Attorney if you need license defense services. We have the experience required to fully comprehend the nuances of your case and the laws that apply to your license. We will help you at every stage, from formulating a strong defense plan to representing you in court or before the board.

The sooner you engage us, the greater your chances of achieving a favorable outcome. We will aggressively defend your license, reputation, and future career prospects. Keep your career from being defined by accusations by calling us today at 858-665-2455 and letting us take on your case.