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California Real Estate License Defense: What to Do If You Face Disciplinary Action

For real estate professionals in California, maintaining a valid license is essential to continuing their career. However, facing disciplinary action from the California Department of Real Estate (DRE) can put your license and livelihood at risk. If you receive a complaint or notice of investigation from the DRE, knowing how to respond effectively can make all the difference in protecting your license.

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Understanding Disciplinary Actions by the California DRE

The DRE is responsible for licensing and regulating real estate professionals in California. When the DRE receives a complaint or initiates an investigation, they evaluate whether a licensee has violated real estate laws, engaged in unethical conduct, or committed any other professional misconduct. These investigations can lead to citations or license revocation actions. 

Common reasons for disciplinary action include:

  • Fraud or Misrepresentation: Giving deceptive or misleading information during transactions.
  • Neglecting to Reveal Essential Information: Failing to inform clients about important property details.
  • Trust Account Violations: Improper handling of client funds or inadequate maintenance of escrow accounts.
  • Criminal Convictions: Specific criminal acts, particularly those involving fraud or financial misdeeds, may result in disciplinary action.
  • Unlicensed Activity: Supporting unauthorized persons in performing real estate transactions.
  • Breach of Advertising Regulations: Deceptive or inaccurate ads regarding properties or services.
  • Violation of Fiduciary Duty: Conducting oneself in a manner that contradicts the best interests of clients.

Steps to Take If You Face a DRE Investigation

Do Not Ignore the Complaint

If you get a notice from the DRE about a complaint or investigation, do not ignore it. Overlooking this issue may lead to an unfavorable default decision, which could cause your license to be suspended or revoked. Instead, treat the matter seriously and respond without delay.

Consult an Experienced Real Estate License Defense Attorney

Consider seeking legal representation from a skilled California real estate license defense attorney as soon as possible. These legal professionals can help you understand the allegations, gather evidence, and craft a strong defense strategy.

Gather Supporting Documentation

Gather all pertinent records that support your case, including transaction files, emails, contracts, and client communications. Well-maintained documentation can clarify misunderstandings and prove that you acted according to appropriate regulations.

Be Cautious When Communicating with the DRE

Anything you communicate to DRE investigators may be used against you. Before making any statements or providing written responses, consult your attorney to avoid unintentionally jeopardizing your case. These legal professionals can manage your communication, ensuring your answers are thoughtfully prepared to safeguard your interests.

Responding to an Citation or Accusation

At the conclusion of the DRE investigation, the agency may elect to assess a monetary citation or file a legal proceeding called an Accusation, which is akin to a Complaint in civil court. An Accusation typically seeks the revocation of the individual’s salesperson or broker license, and requires a swift response. A licensee must respond to an Accusation within fifteen (15) days by requesting an administrative hearing. It is critical to contact an experienced licensing attorney upon receipt of such an action. 

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Prepare for an Administrative Hearing

If the case proceeds to an administrative hearing, you can present your defense before an administrative law judge. Working with an experienced lawyer allows for effective legal representation that can gather evidence, question witnesses, and present your case persuasively. 

Possible Outcomes of a DRE Investigation

The outcome of a disciplinary case can vary based on the specific circumstances. However, the potential consequences can include: 

  • Case Dismissal: If there is insufficient evidence, the DRE may close the case without further action. 
  • Citation: In some cases, the agency will reduce the penalty to a monetary citation by way of a settlement agreement.
  • Restricted License: The DRE may place a license on “restricted” status, which is akin to a probationary period and will include certain terms and conditions.
  • License Suspension or Revocation: In more serious cases, the DRE may suspend or permanently revoke a license.

Protect Your Real Estate License with Skilled Legal Representation

Facing disciplinary action from the California DRE can be daunting, but you do not have to navigate this situation alone. The knowledgeable attorneys at Gould, Hahn, & Reinhardt are well-versed in the nuances of real estate license defense and are committed to assisting professionals in protecting their careers.

If you are being investigated or have received a disciplinary notice, contact us today to discuss your situation and examine your legal options.