Unit 4 CA Violations Complaints and Disciplinary Acts Lesson 1 Common California Real Estate License Law Violations Common CA Real Estate License Law Violations The most common real estate license violations are described in Sections 10176 and 10177 of Real Estate Law and Subdivided Lands Law These violations include but are not limited to Making substantial misrepresentations false promises failure to disclose Commingling a licensee s money with money received in trust for another Not including a termination date in a listing Not disclosing personal interest in a transaction or compensation received to a principal Entering into an option agreement without disclosing the amount of profit to the employer Fraud or dishonest dealing Writing up a purchase lease rental or exchange of a business opportunity property without obtaining authorization from the owner of the property to offer the property for sale lease exchange or rent Failing to disburse funds in accordance with a mortgage loan commitment when the broker is acting as the lender or lender s representative Intentionally delaying the closing of a mortgage loan in order to increase charges to the borrower Procuring or attempting to procure a real estate license or renewal by deceit Entering a plea of guilty or no contest or being found guilty or convicted of a felony related to the qualifications for the profession of real estate licensee with the appeals process exhausted Advertising that the licensee has certification designations or membership in organizations that the licensee does not have False advertising concerning a business opportunity or land or subdivision Demonstrated negligence or incompetence in performing licensed activities As a broker failure to exercise reasonable supervision over the activities of associated salespersons While employed by a governmental agency in a capacity giving access to records use of those records other than public records in a manner that violates the confidential nature of the records Fraud or dishonest dealing Violating restrictions in an order granting a restricted license Fair housing violations Violated the Franchise Investment Law Division 5 commencing with Section 31000 of Title 4 of the Corporations Code or regulations of the Commissioner of Corporations pertaining thereto Violations of the Corporate Securities Law of 1968 Division 1 commencing with Section 25000 of Title 4 of the Corporations Code or the regulations of the Commissioner of Corporations pertaining thereto Failure to disclose personal ownership interest or special relationship interest in property to a buyer of that property Spot the Violation Take a look at these actions Are they violations The licensee informs their client of any compensation they ll receive from the transaction Not a violation A licensee deposits a buyer s 1 000 check into their personal savings account for safekeeping Violation A licensee fails to disclose a material property defect they knew about Violation Vivian has a new listing In some areas of town properties sell shortly after they hit the market This property however is in a different area of town The sellers are in no rush and are willing to wait for the right buyer to come along Knowing this Vivian writes up a listing agreement for the clients with no termination date Is this a violation Yes Listing agreements must have a termination date Open ended listing agreements are not permitted A licensee represents the buyers and sellers in the same transaction Neither party knows or consented Violation A licensee represents the buyers and sellers in the same transaction Both parties know and have consented Not a violation A licensee represents the buyers and sellers in the same transaction Only the buyer knows and provided consent Violation A licensee represents the buyers and sellers in the same transaction Only the seller knows and provided consent Violation Goodwin knows an opportunity when he sees one He obtained a listing in which the seller has greatly underestimated the value of the property Rather than pricing the property higher he agrees with the seller s value and lists the property Goodwin plans to buy it at list price then resell it for at least 50 000 more He doesn t want to raise any suspicion of his plan so he uses a dummy buyer to make the purchase Is this a violation Yes because Goodwin is seeking to secretly make a profit on this property Blanca is in the process of obtaining her broker license She has one year of experience as a salesperson but her application reflects two years Violation When Patrick was 18 he was convicted of home invasion He served probation and has turned his life around but he informs California DRE of this conviction on his application anyway Not a violation Tonya gives her unlicensed assistant a list of activities to perform some of which are activities that Tonya should be performing Violation California Department of Real Estate Online Reference Book An additional resource of great value to licensees is the California Department of Real Estate Online Reference Book This resource contains a great deal of information on all topics licensees may encounter during their real estate careers and that may be on your licensing exam Here s a link to the resource Chapter one contains the information we ve been reviewing throughout this section including common real estate violations https www dre ca gov Publications ReferenceBook html Lesson 2 CA Complaint Process The Real Estate Commissioner is responsible for enforcing real estate law The commission will investigate any complaints and determine whether a violation has actually occurred Steps 1 Consumer other licensee or association files a complaint 2 California DRE determines if it has jurisdiction and if the complaint is related to a real estate law violation 3 California DRE initiates an investigation 4 An informal hearing is held by the commission 5 A formal hearing is conducted in front of a judge Lesson 3 Real Estate Licensee Disciplinary Actions Real Estate Licensee Disciplinary Actions Licensee must generally complete certain actions or conditions before license becomes active again Licensee must wait at least one year or longer if stated by the commissioner before applying for reinstatement Suspended license Revoked License Restricted License Licensee cannot renew license until the restriction is lifted Restrictions may include term employment by specific broker actions limited to specific