A prior version of this article stated the effective date after which a CalBRE licensee may petition the CalBRE to remove disciplinary actions from their record as January 1, 2018. This has been revised to July 1, 2018. Changes are indicated in red.

This quarter, the California Bureau of Real Estate (CalBRE) reviews its activity during the 2016-2017  fiscal year, provides resources for the new broker associate reporting requirements and lays out the costs and process for removing disciplinary action from your CalBRE record.

Overview of CalBRE activity

In 2016-2017, total revenue from all sources was $52,639,000, up $1.1 million from the prior year. Expenditures totaled $51,254,441, up roughly $600,000 from 2015-2016.

CalBRE employs around 326 people.

Related article:

A primer on the California Bureau of Real Estate

Audit

CalBRE performs two types of audits:

  • investigative audits, which are related to complaints received or prior disciplinary action taken; and
  • proactive routine audits.

Proactive routine audits focus mainly on brokerages that handle a high volume of trust funds. Last year, the Audit Section completed 364 investigative audits and 234 routine audits.

The audits uncovered more than $10.2 million in trust fund shortages, with 65% of those audited involved in property management.

Seventy five percent of the audits uncovered at least minor violations.

When it comes to trust funds, it doesn’t hurt to be too thorough.

Enforcement

The Enforcement Section investigates complaints of violations of the Real Estate or Subdivided Lands Laws.

After complaints are received, CalBRE reviews for whether:

  • the issue at hand is under CalBRE’s jurisdiction; and
  • clear and convincing evidence indicates a violation has occurred.

If CalBRE determines a violation has occurred, it can:

  • take disciplinary action;
  • issue a desist and refrain order; and
  • issue a citation to impose fines.

Related article:

Agent vs. Agent: Complaints between CalBRE licensees

In 2016-2017, CalBRE received 4282 complaints. 1,265 complaints were referred to CalBRE’s Legal section for administrative action against the licensee or subdivider. 714 complaints resulted in minor fines.

Information Technology Systems Section

CalBRE’s Information Technology Systems Section (IT Section) is working on enhancing CalBRE’s database system to implement changes required for broker-associate reporting and disciplinary action removal.

Legal Section

Last year, CalBRE revoked 362 licenses, suspended 105 and denied 232 license applications.

For more on what to do if you’re involved in a disciplinary action, see this article:

Reinstating your real estate license after disciplinary action

Licensing Section

The Licensing Section administers the sales agent and broker State Exams, original CalBRE licenses, renewals and mortgage loan originator (MLO) endorsements.

For current CalBRE licensing and MLO endorsement statistics, check out our handy charts here, here and here.

Education and Research

Last fiscal year, CalBRE reviewed and approved 373 applications for licensing and continuing education courses, a 21% decrease from the prior year. The decrease is explained in part by last year’s mandatory addition of the Office Management and Supervision course.

As of June 30, 2017, licensees were able to choose from 118 continuing education providers offering 665 approved courses and 325 pre-licensing course providers offering 1,980 courses.

first tuesday’s CalBRE-approved course offerings can be found here, here and here.

Mortgage Loan Activities Section

Finally, the Mortgage Loan Activities Section provides additional administrative support for MLO endorsements and reports.

CalBRE reports there are:

  • 432 private money mortgage, or threshold brokers;
  • 135 multilender servicing brokers; and
  • 5,882 residential mortgage brokers required to submit Mortgage Call Reports.

Not sure which is which? We have a continuing education course that lays out all the details for you here.

Plus, you can bundle it with your 8-hour MLO renewal course to save some bucks.

Broker-associate reporting draws near

Beginning January 1, 2018, all brokers who employ broker-associates will need to report the employment to the CalBRE. This applies to all broker-associates, including those who were employed by brokers prior to the January 1, 2018 roll-out.

Brokers need to file a written Broker-Associate Affiliation Notification (RE 215) form to notify CalBRE when a broker-associate is hired or leaves their employment.

Brokers who willfully fail to report broker-associates in their employ are guilty of a misdemeanor and may be subject to fines and/or imprisonment. [Calif. Business and Professions Code §10185]

We’ve got some questions in to the CalBRE on how this will roll-out – stay tuned for an article in the coming weeks.

Petitioning for a clean slate

Beginning July 1, 2018, CalBRE licensees with disciplinary actions on their public records can petition CalBRE for removal of those disciplinary actions.

The criteria for disciplinary action removal can be found here:

CalBRE licensees may petition for removal of disciplinary actions

Further, only licensees with license rights (i.e., licensees who are not restricted or suspended) may petition.

CalBRE is working on a template form which can be used when petitioning for removal of disciplinary history, but the burden is on the licensee to include sufficient evidence to prove they are no longer a risk to the public.

The fee to petition for removal is set at $1,275, whether or not the petition is successful.

Read the full Fall 2017 CalBRE Bulletin here.

Happy Pumpkin Spice season, for those of you who partake.