2018 California Bureau of Real Estate Compliance Updates - Attorney Steve Insights
This blog represents my personal observation and opinions as a real estate lawyer over the past 14 years. I have dealt with the BRE on many occasions (licensing issues, removing restrictions, I have had over 60 advance fee agreements approved, trust fund audits, investigations, accusations, subpoena response, etc.).
Over the years I have always tried to build great working relationships with the Bureau (formely the DRE), and we have helped many clients who made "mistakes" in their real estate business. Yes, mistakes happen and sometimes people make bad decisions. These bad decisions can lead to disciplinary action including license revocation and restriction. In some cases, brokers can be required to go from "broker" status, to "salespersons" status.
The point of this blog is to let you know that in my opinion, the BRE has becoming much less forgiving and more punitive in nature. One BRE attorney I spoke with told me there was a new committee in place that reviewed all the disciplinary cases and make a decision as to whether to grant real estate licenses (ex. to people who have prior convictions, like DUI"s, or drug possession cases), and wehther to settle accusation cases with a restricted or revoked license.
REAL ESTATE ADMISSION CASES
In license addmission cases, people with a prior conviction seem to have a much harder time getting admitted than they did in the past. Years ago, in my opinion the BRE was much more "pro work" (get people working so they can pay their taxes). Now, it seems to be "prove to me your are a saint or you don't get in." So, I just want people to know that you need to make sure you are disclosing in detail your prior convictions when you apply for a license. Don't be lazy, be detailed. The committe that is looking at your application may have a bias toward not letting people in. I cannot tell for sure but I do so teh tone that candidly even a few BRE lawyers have told me "they want to take everything to a hearing."
Another lawyer also told me that there were a lot of new people applying for their real estate license, and that they were "cracking down" trying to cleam up the profession. Remember when the financial meltdown hit, instead of blaiming the banks they blamed the brokers, and this may be an extension of that policy.
REAL ESTATE ACCUSATIONS
The same is true in accusations. Where it used to be more commonplace (in my opinion) to settle a BRE accusation case with a settlement (ex. a 30 days suspended real estate license), now the trend and preference seems to be toward pushing the case to a costly hearing in front of the California Office of Administrative Hearings ("OAH"). So it is more important than ever before to stay out of trouble with the BRE.
THE BOTTOM LINE
Be careful what you are doing out there. Make sure you are 100% compliant in your mortgage, residential, commercial, or property management business. Hire a counsultant to perform an annual self-audit. The problems you catch could save your license in the long run. Once an accusation is filed, it goes on your public record (which will likely cost you business).
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