This article is about the DRE’s Complaint Resolution Program, a free mediation-like service that handles minor real estate disputes.
Ups and downs of complaint resolution
Disputes involving real estate transactions can be messy and expensive — not to mention that the time and energy expended to litigate an issue are often more trouble than they’re worth. Sometimes, disputing parties will undergo arbitration to resolve the issue, but this process has multiple drawbacks (first tuesday has covered these disadvantages in detail).
Many purchase agreements — such as those produced by the California Association of Realtors® (CAR) — even include an arbitration provision, which compels participants in the transaction to seek arbitration in the event of a dispute, regardless of context.
Realty Publications, Inc. (RPI) Forms do not, on principle, contain an arbitration provision, opting instead for a mediation provision. Mediation is a method of dispute resolution that takes the affordability and ease of arbitration and removes some of its risks. Mediated resolutions are not legally binding, and if either participant is unhappy with the outcome they have the option of appealing the decision in court.
Similar to the process of mediation is the Department of Real Estate (DRE)’s Complaint Resolution Program (CRP). This program primarily handles disputes between real estate licensees and their clients or another consumer, and may also occasionally handle disputes between licensees.
The bones of the program
Like most forms of mediation, the CRP is geared toward solving minor disputes. It is an initial, informal step an aggrieved participant may take before resorting to a more formal method of dispute resolution — such as taking their grievance to court.
The CRP covers civil and contractual issues such as earnest money or listing disputes — instances of fraud or other violations of real estate law are instead handled by other facets of the DRE.
While the number of cases the CRP fields fluctuates, it typically runs from 80 to 150 a year. That number is the result of an overall decrease in cases handled by the CRP — largely because the DRE’s complaint intake unit, which processes all complaints received by the department, has needed to refer fewer easy-to-handle issues to the CRP over time.
Approximately a dozen people have a hand in the CRP, including facilitators who specifically field complaints from Spanish-speaking consumers.
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The chief draw of the CRP is that it is voluntary, impartial, confidential and free. A licensee or consumer’s participation in the program won’t be publicized, nor will the result of the dispute. But the lack of cost is what separates the CRP from other dispute management systems like formal mediation or arbitration.
As a result, the CRP tends to be a more casual method of dispute resolution. Its primary function, CRP facilitator Carlo H-Banki explains, is to open lines of communication between consumers and licensees. “Sometimes I don’t even need to be involved,” says H-Banki.
Consequently, the CRP has no authority to demand money be paid or contracts canceled. These are formal, legal procedures that require formal, legally binding settings and are not within the purview of the CRP.
H-Banki cites a roughly 60% success rate for the program’s disputes — meaning just over half of those who go through the program are satisfied with the results and do not seek a more costly resolution like arbitration or litigation.
Before resorting to one of these more drastic measures, any participant in a real estate dispute will want to consider taking advantage of this service the DRE already provides free of charge.
“It’s a natural, organic process,” says H-Banki. “And most people want to resolve.”
How to contact the program
Clients and licensees with complaints regarding mortgage or lending services, contact:
Mortgage Loan Activities Unit at (916) 263-8941.
Clients and licensees with complaints regarding subdivisions, contact:
Subdivisions Northern California: (916) 263-8879
Subdivisions Southern California: (213) 576-6927
All other complaints may direct their call to:
State-wide Facilitation: (213) 576-6885
For more information on filing a general complaint with the DRE, see: Filing a complaint.
