Joseph P. Hougnon, Attorney at Law

Real Estate Brokers and Agents License Defense Attorney in Sacramento

Despite all of the upturns and downturns in the economy, California has always had a volatile and lucrative real estate market. After all, this is California. For many people, living and working in the Golden State is a key component of living the dream.

This dream is reflected in the number of people employed as real estate professionals in the state. As of April of 2017, there were over 97,000 active real estate brokers and nearly 200,000 active real estate agents in California. The economic activity of these brokers and agents is readily apparent. In 2016, nearly 500,000 homes were sold in the state. The median price of a home in California is $497,500. This means that real estate professionals in the State of California generated almost $250 billion is sales in the residential real estate market alone. No matter how you cut it, that’s a lot of closed deals.

All real estate brokers and agents in California are regulated by the California Bureau of Real Estate or BRE. Formerly known as the California Department of Real Estate (DRE), the DRE was merged into the Department of Consumer Affairs in 2013 and became the BRE.

The mission of the BRE is to safeguard and promote the public interests in real estate matters through licensure, regulation, education and enforcement fine. This means that the BRE not only has the power to grant licenses to California real estate brokers and agents, it also has the power to fine, suspend, and revoke the licenses it grants.

As a real estate professional, you’ve worked hard to gain your license and become successful in a very competitive field. You are aware that there are a multitude of laws and regulations that you are required to follow, including the California Real Estate and Subdivided Lands Law, the Regulations of the California Real Estate Commissioner and, depending on your area of expertise, literally dozens of other sections of the California Civil and Revenue and Taxation Codes. A violation of any one of these laws and regulations is enough to trigger a BRE investigation.

It’s obvious that having your license impacted by disciplinary measures could have disastrous ramifications. This is why it is extremely important to take all communications from the BRE regarding investigations, citations or accusations very seriously. As a licensed real estate broker or agent in the State of California, you have the right to defend yourself against all accusations made against you, but only if you exercise that right in a timely and procedurally correct manner.

Investigations and Accusations Against Brokers and Agents

In general, there are two main ways to trigger a BRE investigation and possible accusation. One is through a public complaint about a real estate broker or an agent’s performance or conduct. The other is a random investigation or audit conducted by the BRE.

When a complaint is received, it is assigned to a BRE investigator. The investigator will then contact the broker or agent in question, usually by phone, and ask some questions or set up an interview. The investigator may also request that the broker or agent produce specific documents related to the complaint.

At all times, it is important to be cordial and cooperative with the BRE investigator. You gain nothing by being hostile or obstructionist. At the same time, you don’t want to be so helpful that you hurt your position by agreeing to meet before you are fully prepared. It is at this point that you should consider consulting with an experienced California real estate license defense attorney.

At this stage of an investigation, before a formal accusation has been issued, the BRE has no obligation to let a broker or agent know who filed a complaint against them. However, most brokers or agents involved in this stage of the BRE investigation process will have a fairly good idea of which disgruntled client may have complained about their performance.

All brokers and agents should be aware that everything they say to the BRE investigator is on the record. Therefore, when dealing with any BRE representative, always be cautious while remaining cooperative. Remember, an investigation is an adversarial process. If the BRE decides that a complaint is valid, they will move forward and attempt to impose any appropriate discipline, including suspension and revocation of a broker’s or agent’s license.

Once an investigation is concluded, all the information obtained during the investigation is turned over to an attorney at the BRE. The BRE attorney will review the investigator’s findings and decide whether there is sufficient information to support the statements made in the complaint. If it is determined that there is sufficient support, a formal accusation will be issued against the broker or agent.

A broker or agent who receives a formal accusation should contact an attorney experienced in real estate license defense. The laws that govern the procedures for adjudicating a BRE accusation are both complex and exact. For example, an accused broker or agent must file a Notice of Defense with the BRE within 15 days of the date that the formal accusation was mailed. A failure to do so will usually preclude the broker or agent from contesting the accusation.

Likewise, once an accusation has been presented, all informal communications with the BRE must cease. This is not the time to think that you can contact the BRE, discuss the matter and bring it to a conclusion. More than one broker or agent has learned the hard way that supposedly informal conversations with representatives of the BRE can and will be used against them at the administrative hearing dealing with the specifics of the Accusation.

At this point, an attorney for a broker or agent can either attempt to negotiate a settlement with the BRE regarding the allegations made in the Accusation or, failing that, can proceed to hearing. Any settlement is, of course, a compromise. The broker or agent foregoes their right to a hearing in exchange for an expedited resolution of the situation. The BRE, in return, provides some measure of leniency in terms of the discipline imposed.

A matter that proceeds to hearing before an administrative law judge will result in a proposed decision. That decision can either be accepted by the BRE, or the Bureau can reject the decision, in whole or in part, and substitute one of its own. A broker or agent has the right to appeal the decision of the BRE to the state court system, but a court will only look at the hearing record for errors in the application of the relevant law. It will not revisit the facts of the case or examine new evidence.

As you can see, the BRE disciplinary process is complex. As a real estate agent or broker, the entire process can seem daunting and even impossible. This is why it’s important to have an experienced real estate license defense attorney on your side, fighting to protect your livelihood. Feel free to contact our office today for a free and confidential consultation.

Joe Hougnon, Esq.

Answers to all your questions are only a phone call away. Call Now at (916) 730-5251.