For those living in California, knowing what real estate licensees should know about the Department of Real Estate can help them better protect their careers from compliance issues and disciplinary actions. The California Department of Real Estate (DRE) is the state regulatory agency responsible for overseeing real estate brokers and salespersons across California.
Whether you’re preparing for the state licensing exam or facing an investigation, it’s critical to understand DRE’s jurisdiction and powers.
What Is The California Department of Real Estate?
The California Department of Real Estate licenses and regulates real estate professionals in California. California’s Department of Real Estate’s mission is consumer protection, which it accomplishes by promoting professionalism and compliance in the real estate industry. The agency is typically responsible for:
- Licensing
- Regulation
- Enforcement
- Audits
- Educations
- Examinations
The Department of Real Estate regulates hundreds of thousands of licensees across California. With more than 424,000 active real estate licenses and over 120,000 brokers and 303,000 salespeople, California has among the largest numbers of licensed real estate professionals in the nation.
The DRE’s Authority Under California Law
The DRE operates under the authority of the California Business and Professions Code and the California Real Estate Law. The Business and Professions Code sets forth licensing qualifications and requirements, while the Real Estate Law grants the DRE authority to administer and enforce real estate law.
California Business and Professions Code Sections 10176 and 10177 specifically deal with disciplining licensees for improper conduct. Section 10176 identifies activities that could lead to license suspension or revocation. Section 10177 identifies acts that constitute grounds for discipline by the California DRE.
Real estate licensees should be familiar with the above real estate license laws because they are commonly at issue in many disciplinary cases. Essentially, both describe activities that are dishonest or fraudulent in nature.
Conduct That Can Lead to DRE Discipline
While there are many violations that can result in discipline by the California Department of Real Estate, some issues arise more frequently than others. Understanding how and why these issues occur can help you avoid them in the future. Common disciplinary issues include:
- Omitting material information
- Trust fund violations
- False advertising
- Fiduciary duty violations
- Misrepresentation
- Criminal convictions
- Acting without a license
- Failure to supervise
Real estate agents who have been practicing for years can still be investigated by DRE. Oftentimes, these investigations are due to missing paperwork or miscommunication. It’s important to stay organized and maintain a paper trail at all times for this very reason.
What Occurs During a DRE Investigation?
After the DRE is made aware of a complaint, they typically conduct their investigation by obtaining information from various sources. The investigative process generally entails scrutinizing transaction-specific paperwork, agreements, communications, financial accounts, and disclosures, plus any other items connected to the claims.
Witnesses, clients, brokers, and real estate licensees may be interviewed as part of the investigation in California. The DRE may also ask the licensee to provide a written explanation along with any supporting documentation, depending on the nature of the allegations. Many times, these investigations result in no discipline. If the investigators find that a violation may have been committed, they issue an administrative enforcement action.
Still, it’s always wise to treat these kinds of questions with gravity and make sure your records are in order throughout every encounter.
Hire a Real Estate License Defense Lawyer
Real estate professionals spend years cultivating their business. When they receive a complaint or are served with an investigation or disciplinary action, many choose to hire a real estate license defense lawyer. A real estate license defense attorney can go over the specifics of your situation, help you understand California’s regulatory system, and build strong real estate license defense strategies.
By knowing what to expect from the DRE, staying up to date on real estate license law, and taking proactive steps to remain compliant, you can better protect your real estate license.
FAQs
Can the DRE Investigate Anonymous Complaints?
Yes, the DRE can take anonymous information into consideration. If the information pertains to a possible violation of real estate law or regulations, then they may most likely investigate. However, it is often hard to investigate an anonymous complaint. There may be little to no documentation and an unwillingness on the part of witnesses to come forward. The DRE can assess the validity of the information they receive.
Can a Real Estate Licensee Be Disciplined Because of Conduct Outside of Work?
Yes, depending on the circumstances, a real estate licensee may be disciplined because of conduct outside of work. While certain acts or conduct that occur outside of real estate transactions may not directly affect a license holder’s ability to perform their real estate duties, they may still impact their qualifications to hold a license.
For example, criminal convictions, fraudulent acts, and other deeds that demonstrate dishonesty can be the subject of regulatory scrutiny.
Can Consumer Complaints Be Resolved Before a Formal Investigation Occurs?
Consumer complaints may be able to be resolved before a formal investigation occurs, depending on the circumstances. Depending on the situation, issues may be resolved/clear up through dialogue before becoming a larger conflict. Addressing client concerns swiftly, maintaining meticulous records, and proactively resolving potential problems can indeed lessen the likelihood of a complaint escalating into a formal regulatory concern.
Can Transaction Disputes Automatically Result in Disciplinary Action?
No, the existence of a transaction dispute does not necessarily lead to finding a license violation. Buyers, sellers, or agents often find themselves at odds over contract terms, negotiation points, inspection findings, or disclosure details in real estate deals. Typically, the DRE looks to see if the facts of the situation support a violation of the law or regulations, not merely if there was a dispute between parties.
Your Local Legal Resource
Century Law Group LLP defends California real estate brokers against Department of Real Estate investigations, disciplinary actions, and other license-related issues. Our team recognizes the immense importance of your situation when confronted with a DRE contact.
Our attorneys provide strategic counsel based on your specific needs. With a reputation for quality legal services and a drive for efficient, successful advocacy, Century Law Group LLP stands firm in protecting your license, career, and reputation. Contact us today to find out how we can help you.
