The Winter 2020/21 Department of Real Estate (DRE) Real Estate Bulletin reflects on each department section’s achievements during the COVID-19 pandemic and charts a course for the choppy waters ahead.

DRE Commissioner Doug McCauley opens the year with a sobering message: wear a mask. The bulletin reminds licensees about the latest COVID-19 industry guidance for real estate transactions. This guidance includes information on:

  • establishing a workplace COVID-19 prevention plan;
  • training workers on preventing the spread of COVID-19;
  • cleaning and disinfecting protocols; and
  • physical distancing guidelines.

Licensing stats

The DRE licensing program oversees real estate license examinations, licensing and renewals for salespersons and brokers. Thanks to intermittent COVID-19-related closures of the DRE’s five exam centers, there was a dramatic drop in exams administered and licenses issued. Between the 2018-19 and 2019-20 fiscal years, the number of salesperson and broker exams plummeted 31% and 24%, respectively.

In contrast, license renewals remained steady. Seventy-nine percent of salespersons and 92% of brokers renewed their licenses during the 2019-20 fiscal year. With DRE licensing examinations hamstrung by the pandemic, maintaining an active license is more important than ever.

Editor’s note — though the DRE provides an outline of licensing figures in the bulletin, the department has abandoned its regular detailed licensee statistics beginning in May 2020.

 Enforcement and auditing

The enforcement section, the arm of the DRE that investigates complaints filed against licensees, subdividers and unlicensed individuals, focuses on violations of the Real Estate Law and Subdivided Lands Law.

During the 2019-20 fiscal year, the DRE received 6,148 complaints, and referred 4,767 to the legal section for investigation. Of those, 913 were referred for disciplinary action. Access the full catalog of the DRE’s latest enforcement actions here.

Many of these enforcement actions resulted from the 533 audits closed by the audit section during this fiscal year. The DRE focused on brokers who handle a high volume of trust funds. In fact, the section identified over $5 million in trust fund shortages this year.

Subdivision reporting

The DRE’s subdivision section, which oversees public reports, permits and registrations for subdivisions marketed in California, received 2,639 Final Subdivision Public Report applications during the 2019-20 fiscal year. This marks a nearly 15% dip from the previous fiscal year.

In addition, the subdivision section is currently working with the DRE’s information technology department to erect an online application system. The Subdivision Online Public Report Application System (SOPRAS) is expected to automate the application process for a quick and paperless application experience.

Legal section

Last, but not least, is the DRE’s legal section. This arm of the department works with the enforcement and auditing sections to pursue disciplinary actions for licensees who have been found to be in violation of real estate law.

In the 2019-20 fiscal year, the legal section revoked 162 licenses, suspended 87 licenses, accepted the voluntary surrender of 62 licenses and denied 113 license applications. This is down from the previous year, which saw 365 revoked licenses, 108 suspensions, and 217 denied applications.

This section also manages the DRE’s Consumer Recovery Fund, which is the fund of last resort for real estate fraud victims. During the 2019-20 fiscal year, the fund paid out 41 claims totaling $947,411.

Legislative update

The bulletin closes with a brief roundup of pertinent bills passed during the 2019-20 legislative session. Check out firsttuesday’s coverage and analysis of these new laws here.

And as always, you can read the full Winter 2020/21 DRE Bulletin here.