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DRE CAN SEEK COSTS OF INVESTIGATION IN ACCUSATION CASES B&P 10160.

By
Real Estate Attorney with The Law Offices of Steven C. Vondran, P.C. Attorney at Law



The California Department of Real Estate (“DRE”) is charged with enforcing the California real estate law and commission regulations.  They do this is DRE hearings, audits, and investigations, including issuing bar orders and desist and refrain orders.


The department has always had the power to charge real estate licensees with the costs of an audit where a violation of the trust accounting rules have been uncovered (i.e. for violations of California Business and Professions Code Section 10145), but the power to seek funds from the licensee also extends to violations that don’t involve violations of 10145 accounting rules.  Here is what California Business & Professions Code Section 10106 says:


10106.  (a) Except as otherwise provided by law, in any order issued
in resolution of a disciplinary proceeding before the department,
the commissioner
may request the administrative law judge to direct a
licensee found to have committed a violation of this part to pay a
sum not to exceed the
reasonable costs of the investigation and
enforcement of the case
....................Nothing in this section shall preclude the department from including the recovery of the costs of investigation and

enforcement of a case in any stipulated settlement.


What this means is, if you are involved in a DRE hearing, investigation, or accusation, you may be charged with the costs of audit and the DRE may seek reasonable investigation fees.  Often times where there is a DRE accusation, there are also “victims” (most often in the loan modification context) and to retain a suspended or restricted real estate license, normally the DRE is going to require the broker to pay restitution to the victims.  This means, the final bill for defending your real estate license could get quite costly.  Just something to bear in mind and more reason to make sure that your real estate company is in compliance with the various rules and regulations that affect the professions.


Our company performs annual broker self-audits and compliance examinations that are designed to detect problems before you are subjec to a DRE audit.  Contact Attorney Steve Vondran for more information.

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