Office Hours with Mary E. Work

As a service to the California Brokerage Community, Mary E. Work of Manning & Kass, Ellrod, Ramirez, Trester LLP is launching a monthly event named “Office Hours“.

maryworkofficehours

 

Click here to RSVP Now for this free conference call.

This month, Mary will be discussing the California Bureau of Real Estate’s (BRE) Broker Officer Survey Process.  She will be answering questions from the participants.

If you have regulatory questions that you believe are valuable to the community, please submit your question(s) in advance to Mary by registering for this event.

Register now for free.

Mary is a former Bureau of Real Estate Prosecutor and Real Estate Partner at the law firm of Manning & Kass, Ellrod, Ramirez, Trester LLP.

The High Cost of a DUI When You Hold a Professional License

The Automobile Club of Southern California reports that the costs associated with a DUI conviction have risen since the Auto Club last reviewed the issue in 2010.  The costs associated with a DUI conviction include fines to the state, county penalties, attorney fees and increased auto insurance rates.

What the report does not touch on in terms of cost are the negative consequences of a DUI when an individual holds a professional license issued by the State of California.  

For example, if a real estate agent has two or more convictions involving the consumption of alcohol or drugs when at least one of the convictions involves driving, the Bureau of Real Estate (BRE) may file an Accusation against the real estate agent.

Such Accusations from the BRE typically result in a revocation of the individual’s real estate license and a restricted license is issued in its place.   Information about the real agent’s revocation and restricted license is then posted on the BRE’s website under the individual’s license history.  This can take a real toll on one’s business and professional reputation.

Some professions face an action after a single DUI.  For example registered nurses can expect to find that the Board of Registered Nursing will investigate and often file an Accusation based on a single DUI conviction.  As with real estate professionals, the cost of the discipline that accompanies the action can result in job loss, a permanent blemish on one’s professional reputation and a public record that suggests the individual is an alcoholic—when this may not be the case.

California Bureau of Real Estate Gets Tougher on Enforcing Violations and Unlicensed Individuals

California Real Estate Commissioner Wayne Bell speaks to the California Bar Association's Real Estate Sales & Brokerage LOS ANGELES – The Bureau of Real Estate is focused on the “biggest and baddest” violators of the law, according to State of California Real Estate Commissioner Wayne Bell, who spoke at a program hosted by the California Bar Association’s Real Estate Sales & Brokerage Sub-Section of the Property Law Section.

+++At the program, entitled, The New Bureau of Real Estate and Its Enforcement, over 150 real estate licensees and real estate attorneys gathered on Monday to hear the new California Bureau of Real Estate (CalBRE) Commissioner speak about his current agenda.

INDIVIDUALS PRACTICING REAL ESTATE WITHOUT A LICENSE MAY RECEIVE CRIMINAL CHARGES

+++Commissioner Bell emphasized that his goal is to promote a fair, competent, and law-abiding real estate industry in California.  He explained that unlicensed activity will receive more attention.
Commissioner Bell wants to pursue criminal actions against unlicensed individuals that violate real estate laws.   In the future, he said, individuals accused of unlicensed activity may receive a “Notice to Appear” that requires an appearance in criminal court.   Commissioner Bell plans to accomplish these objectives by prioritizing the Bureau’s enforcement efforts.   He also wants to make the Bureau’s activities more transparent.

A NEW COMMISSIONER FOR A NEW BUREAU

+++In July, CalBRE became the successor to the former California Department of Real Estate (DRE).  Commissioner Bell, an attorney and licensed real estate broker, was appointed as Chief Officer of CalBRE by Jerry Brown earlier this year.

COMMISSIONER’S ROLE AT THE CALIFORNIA BUREAU OF REAL ESTATE

+++The Commissioner manages a staff of approximately 335 CalBRE employees. Together, they oversee more than 400,000 real estate agents and mortgage loan originators. The CalBRE enforces California’s Real Estate laws and regulations including the sale, lease, or financing of subdivided lands and the qualification of subdivision offerings.

CO-CHAIRS AND EXECUTIVE COMMITTEE MEMBERS

+++Monday’s program was chaired by Holly Thomas, General Counsel for RE/MAX® Estate Properties and Neil Kalin, Assistant General Counsel for the California Association of Realtors.
Executive Committee Members of the Property Law Section of the California State Bar were in attendance including, Rinat Klier-Erlich, Jose Mendoza, and Mary Work.

 

Fraud Prevention and the MLS: New Fannie Mae Rule Regarding Short Sales

As of August 1, 2013, all properties being considered for a standard short sale/HAFA II must be listed on an active status with the MLS for at least 5 consecutive days – including one weekend.

Further, the property must be listed with the MLS that covers the geographic area in which the property is located. A hard copy of the MLS listing must be maintained by the broker.

SEE Announcement SVC-2012-10, Standard Short Sale/HAFA II and Deed-in-Lieu of Foreclosure Requirements.

For further information about avoiding short sale fraud visit:

FreddieMac.com/singlefamily/preventfraud/toolkit.html

A Faster Road to Licensing for Military Spouses

Effective July 1, 2013, Business and Professions Code section 115.5 will require the Bureau of Real Estate (BRE) to expedite the license applications of those individuals already licensed in another jurisdiction as a real estate professional and who are married to, or in a legal union with, an active duty member of the Armed Forces and assigned to a duty station in California. Additional information regarding the expedited licensing process is currently available on the DRE website (www.dre.ca.gov).

Increased Accountability of Licensees Managing Real Estate Offices

California Governor Jerry Brown signed SB 510 into law on 10/9/11.  This legislation will allow brokers to designate branch managers as directly responsible for the licensee activities of those real estate salespersons under their supervision.  This will require filing paperwork with the Dept. of Real Estate (DRE) notifying the DRE of the designation.  Standby for further updates.

Why AB 278 (Hill) is a great piece of Legislation for the California Real Estate Community

Current law and regulations require the Department of Real Estate (DRE) to engage in formal disciplinary action against licensees for any infraction, even a minor one and even if the violation was promptly corrected.  Once accused, the licensee must defend themselves against the allegation or else risk losing their license.  This could end up costing a considerable amount of time and money.  Furthermore, regardless of the licensee’s decision to defend the accusation, a public notice of the violation will be posted on the DRE’s website.  This public notice will remain on the DRE’s website indefinitely as there currently is no process available to have the entry removed.

Many other administrative agencies in California have the ability to issue a citation and/or a fine for minor infractions instead of proceeding to trial.  Within those agencies, licensees facing disciplinary action for relatively minor offenses still retain the option of defending themselves in a hearing if they choose, or they can opt to just pay a fine, with the assurance that in many cases, there will be no public posting of the minor offense.

However, the only way for the DRE to have the authority required to impose a citation is for AB 278 to be implemented (for an explanation of AB 278, click here).  If enacted, this bill would authorize the Real Estate Commissioner to adopt a system for the issuance of citations to licensees who engage in minor violations of the Real Estate Law rather than going through the lengthy and costly trial process.  AB 278 would require citations to be in writing, to indicate the provisions of law violated by a licensee, and to inform a licensee that the licensee may request a hearing to contest the citation. The bill would authorize citations to include an order of abatement or an order to pay an administrative fine of up to $1,000. It would authorize the commissioner to take disciplinary action against a licensee who fails to pay a fine within 30 days of assessment of the fine, as specified. The bill would also authorize the commissioner to adopt regulations to establish a similar system for the issuance of administrative citations to unlicensed persons acting in the capacity of a licensee. Serious violations will continue to be subject to the formal action process.

All in all, the passage of AB 278 will benefit the real estate industry because a minor violation will no longer lead to a blemish to one’s license history.

The Meaning of a “Restricted” Real Estate License

To understand the effect a restricted real estate license will have on your real estate career, you must first understand the rights associated with an “un”restricted real estate license.

Unrestricted Licenses Are Your Property:

Your license to practice real estate, either as a real estate sales broker or agent, is considered to be a piece of property under the law.  As such, the license gets the same protection all property gets as guaranteed by the United States Constitution.  As you may remember from social studies class, the 5th amendment of the Constitution forbids the government from depriving you of “Life, Liberty or Property without Due Process of Law.”  What this means is that the state of California, through the Department of Real Estate (DRE), cannot take away or suspend your license to work in real estate without first notifying you of its intention to do so AND providing you with an opportunity to defend your right to the license.  Both the notice and the opportunity to be heard must occur before the DRE can take your real estate license away.

Cause:

However, this does not mean your right to your real estate license is absolute.   The DRE is still entitled to enforce certain regulations and standards relating to your status as a real estate licensee which may result in the issuance of a restricted real estate license.  Misrepresentations to the department, negligent acts or dishonest acts amid a real estate transaction are just a few examples.

Additional situations which might also result in the initiation of a disciplinary action leading to a restricted real estate license are:  conduct demonstrating  a lack of honesty and integrity, a felony or misdemeanor conviction that is deemed to be “substantially related” to the qualifications, functions, or duties of a real estate licensee.

Effect:

An agent with a restricted license can do all of the same tasks as a regularly licensed salesperson, but has lost the property right he or she formerly held to the license.  This means that the license could be suspended without a hearing leaving the licensee unable to work in real estate until after a formal trial occurs and there is a final decision in the matter.

For example, the DRE will suspend a restricted license prior to a hearing if:

  1. the restricted licensee is convicted of a crime substantially related to his or her fitness or capacity to act as a real estate licensee; or
  2. there is satisfactory evidence that the restricted licensee has violated provisions of the California Real Estate Law, the Subdivided Lands Law, Regulations of the Real Estate Commissioner, or conditions attaching to the restricted license.

Additionally, restricted licenses are sometimes subjected to certain conditions and limitations.  Typically a restricted licensee will need to:

  1. take and pass a continuing education course within nine (9) months; and
  2. in the event of an arrest, the licensee must notify the Department within 72 hours by sending a certified letter to the DRE.

Restriction Removal:

Lastly, the restriction is not automatically removed from your license; you must take affirmative steps to have the restriction lifted.  Furthermore, the petition process is not a speedy one.  It can take anywhere from 6 to 24 months for the DRE to review your petition to remove the restriction.  So realistically, the restriction, and thus your loss of property interest, can remain on your license for longer than you might think.

*Please note: This article refers to the current rules of California’s Department of Real Estate.  If you have been disciplined in another state, the real estate laws of that state will control.

4 Helpful Tips To Avoid DENIAL Of Your DRE License Application

Are you thinking about applying for a real estate salesperson license in California? If so, review these
tips below.

1. DON’T Omit Information

Failing to disclose pertinent information can cause substantial delays in the processing of your license application and may result in the denial of your application. Also keep in mind that Applicants should answer all questions truthfully and thoroughly. Any material misrepresentation in an application for a real estate license may be grounds for denial under Business and Professions Code §10177(a). READ ALL QUESTIONS CAREFULLY.

2. DON’T Leave Out Criminal Convictions, No Matter How Old.

An Applicant must disclose all information regarding past license discipline, convictions, pending criminal charges etc. Failure to inform the DRE of these offenses is a definite ground for denial.

In the event you have one or more offenses to report, please take extra care to disclose all actions and convictions regardless of how long ago they occurred, or whether or not a conviction has been expunged under Penal Code Section 1203.4, or a similar statute.

The bad news is that convictions for crimes “substantially related to the qualifications, functions, or duties or a real estate licensee,” the DRE Commissioner may deny the issuance of a license to an applicant even if it was disclosed. (Business and Professions Code §10177(b)). For this reason, it is important to try to get your conviction(s) expunged prior to submitting your application.

3. DO Disclose Juvenile Convictions.

As explained in Tip 2, the DRE expects Applicants to disclose ALL criminal violations. Even convictions that occurred while you were a minor must be disclosed unless the record has been sealed under Section 1203.45 of the California Penal Code or Section 781 of the California Welfare and Institutions Code.

4. DO Keep in Mind the DRE Completes Background Checks on ALL License Applicants.

Before issuing your license, the DRE will conduct a thorough background check including on all license applicants. This includes reports from the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI). Keep in mind that the DRE will continue to receive reports on criminal violations committed even after your license is issued. Subsequent violations may result in disciplinary action being taken against the license after you’ve received it.

Remember, it’s better, safer and more cost efficient to complete the application correctly the first time. If you need help, CALL OUR OFFICE! (310) 416-9800.

Check back next month for an article  explaining what it means to hold a “Restricted” real estate license from the California DRE and how restricted real estate licenses differ from non restricted licenses.