We have noticed recently that there seems to be a rise in the number of audits, hearings, and investigations by the California Department of Real Estate ("DRE") in regard to property management companies.
In particular, since property managers often times bring in a large amount of trust funds, the DRE appears to be (this is not confirmed) cracking down on property management companies, and especially where a complaint may be triggered, they are conducting audits of the books and records and activities of the DRE licensee broker.
In our experience in handling these types of cases, here are the main items that come up:
1. Not properly designating an account as a trust account
2. Failing to keep separate beneficiary records
3. Failing to reconcile the trust account
4. Comingling trust funds with business funds
5. Misrepresentations
6. Charging hidden, secret, or un-disclosed fees
7. Failure to keep and maintain business records
8. Other violations of the commissioner regulations or real estate law
If you find yourself facing an audit, you may want to immediately retain legal counsel to review your case, and help prepare a defense.
This cannot be understated. Many people think they can wing it and represent themselves (which you can of course do, and you do not need to retain a DRE defense counsel).
However, when your license is on the line and your ability to practice in the property management business is on the line, it might be wise to have your case reviewed by a California real estate lawyer.
Our office has helped many DRE licensed salespersons and brokers defend their licenses and represent them in regard to accusations (which normally follow where compliance violations are found) and cease and desist letters.
If you are facing an audit, contact us at (877) 276-5084. More information about our real estate broker law practice can be found at DREDefenseAttorney.com.
Comments (1)Subscribe to CommentsComment