Most professionals rely on their licenses to work and earn a living, including real estate brokers and agents. The California Department of Real Estate has set strict rules that you must adhere to while working as a real estate broker. It does this to protect the welfare of real estate clients. An investigation will be launched against you if you engage in an act that breaks these regulations. As a result, you can face severe consequences. The Department will, however, allow you to defend yourself before imposing a punishment. The penalty can include warning letters, license revocation, or suspension. You should act fast if a case is filed against you that endangers your capacity to make money in real estate. At the Fresno License Attorney, we will provide the expert legal representation you require to challenge the accusations against you and protect your license.
Obligations Of Real Estate Brokers
Real estate brokers are qualified experts who have completed additional training and met licensing requirements to work at a higher level than real estate agents. A broker represents clients directly in real estate transactions and can also appoint agents. It will cost you time and resources to become a real estate broker and secure the necessary licensing to run a brokerage. This process takes the following steps:
Meeting The Necessary Requirements
You must meet certain basic requirements before securing a real estate license in California. Some of the requirements include character, age, and residence. Additionally, you must reveal your criminal record and prove that you are a resident of California. Your license application could be rejected if you fail to disclose your past conviction or other aspects of your criminal record.
Complete Pre-Licensing Education
Before pursuing a broker license, you must learn the basics of the real estate industry. The purpose of this is to gain knowledge that can help you understand different aspects of the industry.
Pass The Real Estate Agent Licensing Exam
You can only become a broker if you have a realtor license. You must sit and pass a state-regulated exam after completing your coursework. This exam is meant to test your industry knowledge.
Gain Real Estate Experience
You will only be issued a real estate broker license if you have worked as a real estate agent for some years. This gives you practical knowledge and experience in the real estate industry.
Sit For Broker Licensing Exam
You must sit for a broker exam upon meeting the training and experience requirements. The topics to be covered include ethical considerations and brokerage management in real estate transactions. You will be eligible to apply for your broker license and pay the necessary fees if you pass the exam.
The following are some of the duties of a real estate broker:
- Hiring and supervising real estate agents
- Coordinate the real estate contract’s lenders, inspectors, and other parties involved
- Prepare and review real estate contracts
- Negotiate real estate deals for clients
- Advice on property value and market conditions
- Show properties to prospective clients
- List and market properties available in the market
Some Of The Offenses A Real Estate Broker Can Commit
You must observe certain regulations when you secure a broker license. This will help you maintain ethics in the industry. The purpose of these laws is to ensure the safety and well-being of property clients. The investigation and penalties by the real estate department can follow any of the following offenses:
Criminal Conviction
A criminal conviction can result in a jail term, fines, and a negative impact on your license. You are required to disclose your conviction to the Department of Real Estate. However, even if you fail to do so, the department will be notified. This can send you to jail and result in you losing your right to practice as a real estate broker.
Fraud In Real Estate Transactions
Fraud is the act of obtaining undeserved financial benefits. You can be guilty of fraud if you engage in fraudulent transactions or allow the agents in your brokerage to engage in fraudulent activities that cause loss for a client.
Exceeding The Scope Of Your License
There is a limit to what you can do in a real estate transaction. You are required to provide your services within the scope of your license. The Department of Real Estate can impose a citation if you perform legal duties not allowed with your license.
Payment Of Commissions Illegally
You are expected to divide commissions from a real estate transaction among the real estate agents and other parties involved. The department can impose a citation if you illegally pay commissions to unlicensed agents.
Trust Fund Violations
If you hold money for a client for a real estate transaction, it is illegal to combine the money with your personal or business funds. You will be accused of committing a trust fund offense if you engage in such an activity. Additionally, most brokers commit trust fund offenses by failing to keep proper real estate records. This offense could result in disciplinary measures and a criminal conviction.
Misrepresentation
You must be transparent with clients involved in real estate transactions. The department expects you to provide factual and accurate information about the purchase. You can be guilty of misrepresentation if you misrepresent material facts during a transaction requiring a real estate broker license. The following are the common misrepresentations:
- Incorrectly portraying materials or facts in the transaction, and
- Failure to reveal facts that a principal should know regarding a property
Unlicensed Activity
According to the Department of Real Estate, you must renew your license after some time. You are also required to ensure that all the agents who work under you have the necessary licensing. It is a crime for you to hire or pay unlicensed real estate agents to engage in activities requiring licensing. This offense could attract a fine and disciplinary measures, such as license suspension.
Failure To supervise
You have a right to work independently when you secure a real estate broker license. This involves representing clients and assisting them find the right property. You are also allowed to hire real estate agents to work for you or provide services to clients.
Ensure your agents have licenses and are properly trained when representing clients in real estate transactions. Additionally, ensure your brokerage or organization comply with the regulations set by the Department of Real Estate.
If you own a brokerage or corporation, ensure all activities carried out comply with the set requirements. You will be held responsible if misconduct occurs in the corporation you own or is done by an agent working under you.
Breaching Client Confidentiality
Most clients reveal many details about their financial standing to real estate brokers. A client can also present to you sensitive documents required to complete the real estate transaction. You are expected to protect your client’s personal information to prevent it from falling into unauthorized hands. The Department of Real Estate can revoke or suspend your license if you disclose client information provided to you during a transaction.
Penalties A Real Estate Broker Can Face
You can face various disciplinary measures if you are found to have committed the crime cited in your allegations. The type of punishment you will face will depend on the severity of the crime committed and the effect your crime had on the client or other parties. Some of the penalties you can face include:
Civil And Criminal Penalties
The district attorney will file criminal charges against you if your crime involves a criminal or civil crime. Common offenses involving criminal acts are real estate fraud and trust fund offenses. If you commit any of these crimes, you will face criminal charges and will be convicted. You can face a jail term that does not exceed three years in a state prison if you are convicted of real estate fraud. The judge can also order you to pay restitution to the victims of your fraudulent activities.
Probation
You will be allowed to continue providing your services in the real estate industry if your broker’s license is put on probation. However, the department will have some stipulations on the scope of your services and where you can work. This could significantly affect your opportunities.
License Revocation
Your license could be revoked if you commit a severe crime. You will not be allowed to practice real estate. Unlike a suspension, a revocation is a permanent decision. Additionally, your license will be revoked if you have been cited for several crimes or committed a crime while your license was on probation.
License Suspension
Your broker license will be suspended if you commit a fairly severe offense. If this happens, you will not be allowed to provide your services or make property transactions for a designated period. You will retain your broker license, but you will only be allowed to use it when the suspension is lifted. The department can impose certain conditions that you must follow if you are suspended. However, you have the right to seek reinstatement after the suspension period ends and you have complied with all conditions.
Public Reprimand
You may face a public reprimand letter if you commit a minor crime. This punishment will not restrict or impair your practice, but it will remain online, and anyone who performs a background check on you can access it. This can taint your reputation and career.
Administrative Fines
You could face fines ranging from hundred to tens of thousands of dollars depending on the severity of your crime.
Fighting For Your Broker License
Disciplinary measures are often public records, and prospective or current clients can access them. This will have a negative impact on your reputation and profession. The department will move fast to investigate you once it receives a written complaint or notice regarding your misconduct. Sometimes, the department can conduct its investigation undercover, while at other times it can serve you with a notice of the inquiry by mail. You can reach out to the department upon receiving this notification, and give your side of the story.
Sometimes, the information you provide to the department can be used at your revocation hearing or license suspension. It is better to hire a skilled, licensed defense attorney immediately when you receive the notice. An attorney will help you gather evidence of the claims and develop a strong defense to present at your disciplinary proceeding. Your charges will be dropped if, through the investigations, the department establishes that the claims are unmerited. A hearing will be scheduled if there are grounds for the accusations. Your license defense attorney will assist you in preparing the documents and information for the proceedings.
Real Estate License Application Denials
You must comply with the following conditions before you are considered eligible for a real estate broker license:
- Present the requisite application for the real estate license, which include payment of the application fees, fingerprinting, and a comprehensive background check
- Apply and pass the California Salesperson License Exam
- Hire a licensed California real estate professional who will supervise you for a certain period
- Complete 135 hours of required pre-licensing education, and
- Must be at least 18 years or older
The process of applying for a real estate broker license can be overwhelming and take several months. Unfortunately, completing the application successfully does not guarantee you a license. You can be denied the license for many reasons. Common reasons include failing to disclose a conviction, being previously subjected to disciplinary measures in another jurisdiction, and acting as a realtor without a license.
The law allows you to petition the department to overturn its denial of your license application. The department will initiate the hearing through a statement of issues after you have filed your petition. You will be served with the statement of issues, and you will have 15 days to respond. The law does not allow you to appeal if you fail to do so within the designated period. An attorney can guide you through a license application or appeal process.
Find An Experienced Professional License Defense Attorney Near Me
Becoming a real estate broker requires hard work and commitment. It would be detrimental to lose your real estate broker’s professional license after putting in so much work. With the help of an experienced attorney, you can challenge the allegations against you and put up a defense to safeguard your professional license. If you require reliable legal counsel and representation, contact the Fresno License Attorney. Call us at 559-388-5402 to speak to one of our attorneys.
