The Department of Real Estate (DRE) now requires licensees to self-report disciplinary actions or convictions from any state or licensing authority. Read the details below.

Business and Professional Code §§ 27, 10004,10166.12, 10175.2, 10236.2, 10450.6, 10470, 10470.1, 10471, 10471.1, 10471.3, 10471.5, 10472, 10473, 10473.1, 10474, 10474.5, 10475, 10476, 10477, 10479, 10481, 11318, 11360, 10050.1, 10083.2, 10100.4, 10106, 10186, 10186.1, 10186.2, 10186.9, 11310.1, 11313.2, 11317.2, 11319.2
Amended by S.B. 706
Effective date: January 1, 2012

Self-reporting required

This law requires real estate licensees to report in writing to the Department of Real Estate (DRE) within 30 days if they:

  • are charged or indicted with a felony;
  • are convicted, plead a verdict of guilty or no contest to a felony or misdemeanor; or
  • have been the subject of a disciplinary action by any other licensing entity or authority of any  state or federal agency.

If the licensee fails to provide a written report within 30 days of receiving the charge, conviction or disciplinary action, the DRE can take disciplinary action against the licensee.


Instead of issuing an accusation, the DRE can enter into a settlement with a licensee or applicant, identifying the factual basis for the settlement and the violated statutes. The licensee or applicant may file a petition to modify the terms of the settlement. A settlement is considered a reportable disciplinary action.

Cost awards

If a licensee, including a corporation or partnership, is found to have committed a violation, he may be required by the DRE to pay for the reasonable costs of his investigation and enforcement. To arrive at the reasonable costs of investigation, a certified copy of the actual costs or a good faith estimate of costs must be signed by the commissioner or commissioner’s representative. The commissioner is able to reduce or eliminate the cost award. If the cost award is not paid, it may be enforced in court. The licensee will not be reinstated or renewed until the award is paid, unless he demonstrates financial hardship or enters into a formal agreement with the department to reimburse the costs within one year.

If the license has been reinstated as a restricted license, the commissioner may require the restricted licensee to pay the costs associated with monitoring his licensed activities. The licensee may also be required to pay restitution to any person damaged by the actions leading to discipline. If the licensee does not pay these costs, the commissioner shall not reinstate an unrestricted license.

All cost awards will be deposited into the Real Estate Fund.

Felony conviction and imprisonment

If a licensee is imprisoned after being convicted of a felony, regardless of whether the conviction is being appealed, the licensee’s DRE license will be suspended automatically. The DRE will notify the licensee they may have their suspension reviewed at a hearing. If the hearing determines the felony was related to the qualifications, functions or duties of a licensee the commissioner shall suspend the license.

The hearing may also determine any other penalty. If no appeal is made or the judgment has become final by the time for appeal has elapsed, the license shall remain suspended.

A hearing will not be granted for violations of any statute regarding dangerous drugs or controlled substances, or a conviction of murder or sexual crime.

Public information

This law makes the protection of the public the DRE’s highest priority. An agent’s address of record and license status, including license suspensions, revocations and accusations is to be made available to the public on the internet.

DRE review

The DRE will be subject to review by the Legislature beginning January 1, 2015.

The renaming of the Recovery Account

This law changes the name of the recovery account to the Consumer Recovery Account.

Editor’s note – Just what constitutes a “disciplinary action” by another licensing, state or federal authority is not addressed here. When in doubt, report any disciplinary action by another authority to the DRE to avoid further disciplinary action.

The DRE received criticism in the aftermath of the housing crisis, which is why this new law includes the legislature’s ability to review the DRE beginning in 2015.