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Are California real estate agents and brokers held to different standards?

On Behalf of | Sep 18, 2020 | Firm News |

Many people believe that an error must be egregious for a Californian real estate agent or broker to lose their license or have a complaint filed.

In fact, seemingly small mistakes can end up being major issues if not dealt with promptly and with prudence.

Getting the terms correct for California real estate professionals

The first thing that needs to be understood is that there are three distinct professions that fall under real estate sales. These are real estate agent, Realtor and real estate broker. Here’s what each term actually means:

  • A California real estate agent always works for a company or for someone else. There are currently nearly 207,000 licensed real estate agents in California according to the California real estate publication ftJournal.
  • A Realtor is a real estate professional who is also a member of the National Association of Realtors (NAR). A Realtor is bound by the NAR code of ethics. Currently, there are over 1.3 million NAR members in the US.
  • A broker has more training than an agent and can work for themselves, employ agents and own and run a real estate office. Some California real estate brokers are also real estate attorneys. The ftJournal states that in 2019 there were about 95,000 active real estate brokers in California.

It is important to understand the difference in terms and use them correctly as each professional is held to a different professional standard.

The 3 top errors that can harm a California real estate professional’s career and license

The number one error or misstep a California real estate professional can make is misrepresentation. This is a somewhat vague term that can range in meaning from an egregious mis-characterization to a misstatement (not stating that the information is “according to the seller,” for example) or even a difference of option regarding a small detail or description.

The second reason California real estate professionals can face complaints is the mishandling of client’s money. As a general rule, client money should be deposited in escrow to avoid any inadvertent mishandling. Bookkeeping should be up-to-date and clearly presented.

The third reason for license revocation is a criminal conviction. California real estate license applicants must fully disclose all misdemeanor and felony criminal convictions. There are some exceptions to this requirement. Because real estate agents are fingerprinted during the application process, any charge or conviction will be registered by the Department of Justice who will then notify the California Department of Real Estate (DRE). The DRE then investigates the charges to see if they are “substantially related” to the “qualifications, functions or duties of a real estate licensee.”

California real estate licensees are strongly encouraged to contact an attorney who works in professional license defense if the licensee is concerned about a complaint or fear they will lose their professional license do to a misstep or criminal charge.



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