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Question: How do I reactivate a disciplined license?

Answer: The process varies on a case-by-case basis, but licensees generally need to show proof of rehabilitation.

The California Department of Real Estate (DRE) regularly restricts, suspends, and revokes agent and broker licenses through disciplinary action. Removing disciplinary actions from your license means providing proof of rehabilitation, but the terms of rehabilitation differ on a case-by-case basis. Here’s what you need to know to remove disciplinary actions from your license so you can return to work as an agent or broker.

In November 2018, 106 California licensees were subjected to disciplinary action by the DRE. Most disciplinary actions cite multiple violations per licensee. Common violations include:

  • misrepresentation and nondisclosure of material facts;
  • failure to report violations of real estate law (a breach of duty owed the state by an employing broker);
  • nondisclosure of criminal convictions;
  • performing licensed activities without a supervising broker or officer; and
  • trust find mishandling.

When a violation is found, the DRE notifies the licensee by mail or serves notice of the DRE’s investigation and intention to initiate a disciplinary action against their license. The notice also informs the licensee of their right to request a disciplinary hearing. The licensee waives their right to a disciplinary hearing when they do not request one within 15 days of receiving the notice.

As a consequence of a disciplinary hearing, the Real Estate Commissioner may:

  • restrict a license;
  • suspend a license; or
  • revoke a license.

License restrictions

A restricted license is a probationary license granting the licensee the right to limited practice. It may be limited by:

  • term of license duration;
  • employment to a particular broker; or
  • other conditions limiting the licensee’s practice, including a requirement to obtain a surety bond. [Calif. Business & Professions Code §§10156.6, 10156.8]

When a sales agent with a restricted license is required to work under a particular broker, the employing broker needs to certify their supervision complies with the Commissioner’s restrictions. [See RE 552]

A restricted licensee may not renew their license until it has been reinstated or its restrictions have been removed by the Commissioner. [Bus & P C §10156.7]

License suspensions

A suspended license prohibits a licensee from performing any licensed acts until they fulfill conditions or requirements determined by the DRE. [See RE 292]

A licensee may have their license suspended for:

  • failing to pay child support obligations [Bus & P C §490.5; Calif. Family Code §17520];
  • failing to pay over $100,000 in tax obligations due the Franchise Tax Board (FTB) or California Department of Tax and Fee Administration (CADTFA) [Bus & P C §494.5];
  • failing to disclose criminal history or disciplinary action by another state or federal agency [Bus & P C 10186.3]; or
  • violating the conditions of a restricted license. [Bus & P C §10177(k)]

Licenses may be suspended for either 90 or 150 days. If the licensee does not fulfill the conditions required to lift the suspension at the end of the designated term, the license expires and may later be withheld or denied. [See RE 292]

Otherwise, the license is reinstated upon the licensee’s completion of the conditions or tasks issued by the Commissioner.

License revocations

Licenses may be revoked for the same reasons they are suspended. The DRE may determine a licensee’s violation renders them unfit to practice and revoke their license instead of suspend it. A licensee who has their license revoked may not practice real estate.

The DRE makes disciplinary actions at their discretion on a case-by-case basis. The disciplined licensee may petition the DRE to reinstate their license no sooner than one year after the revocation of their license if they wish to return to work as a broker or agent in real estate transactions. [Gov C §11522]

Those with revoked licenses seeking to return to work as an agent or broker need to submit a petition application to the DRE. The petition is assigned to a Deputy Real Estate Commissioner, who investigates the petitioner’s behavior since the disciplinary action, including:

  • employment history;
  • criminal records;
  • bankruptcy court records; and
  • internal DRE records.

The Deputy Commissioner then interviews the petitioner to determine the success of their rehabilitation. The Deputy Commissioner’s investigative report, which includes recommended actions, is submitted to the Legal Section of the DRE. Upon review, the Legal Section submits an order to the Real Estate Commissioner to either grant or deny the petition.

A copy of the final order is sent to the petitioner. If the petition is granted, the copy outlines the terms and conditions the petitioner is required to fulfill to reobtain their license. [DRE Real Estate Bulletin, Spring 2007]

Reinstatement

Even after a license’s reinstatement, the DRE is required to keep a public record of disciplinary actions. Their website publishes a summary of disciplinary actions against licensees on a monthly basis. The DRE public license lookup also displays disciplinary history for individual licensees. [Bus & P C §10083.2]

Licensees may petition the Commissioner to request the removal of license discipline information posted for public review. To be eligible, the relevant disciplinary action needs to have occurred at least ten years prior to the petition. The licensee will also need to provide proof of rehabilitation. Note that the Commissioner will consider other violations when evaluating a petition. [DRE Real Estate Bulletin, Fall 2017; Bus & P C Code §10083.2]

Many violators lose their license out of ignorance of California real estate law. Stay in the loop by bookmarking the first tuesday journal to read the most up-to-date California real estate news.