In order to avoid conflicts of interest, the California Department of Real Estate (DRE) commissioner and designated DRE employees are prohibited from receiving honoraria and a limited amount of gifts. The DRE commissioner is also required to disclose all investments, business interests and positions in real property and income.
But DRE employees and the DRE commissioner are not prohibited from maintaining membership in real estate trade associations while in office.
Limiting DRE involvement in real estate trade unions draws firmer lines between the DRE’s mission to safeguard public interests and the interests of private enterprise.
first tuesday proposes to prohibit the DRE commissioner from maintaining memberships with a real estate trade association.
We feel a change is needed, given the DRE’s history of appointing commissioners with deep ties to the state’s trade union. For example, Jeff Davi served as CAR’s director before being appointed to the role of DRE commissioner. He served in this role from 2004-2011.
What’s the harm in CAR and the DRE having strong ties?
CAR is a member-supported organization — since it doesn’t receive state funding, without members, it doesn’t have the financial ability exist. Therefore, their goal is ultimately to grow their membership base.
On the other hand, the DRE’s goal is to protect the public’s interest with regards to real estate matters.
These two missions don’t always align. While CAR officials might want to see more licensees flood the market to increase their membership pool, a glut of licensees — who may be less experienced and offer less quality — is against the public’s interest (and the DRE’s mission).
The DRE needs to focus on its goal to safeguard consumers — buyers, sellers, renters and landlords — rather than protect CAR’s interests — agents and brokers. It all starts with the commissioner, whose ties to CAR ought to be limited.