Why are RE Agents & Brokers Losing Their Licenses?

In March alone over 60 real estate agents and brokers lost their license to practice real estate in California. But what was the cause of this? It’s important for all agents and brokers to know why so that you don’t make the same mistakes and suffer the same consequences. The California Department of Real Estate (DRE) publishes a detailed list of who and why. You can find the complete list of disciplinary actions here.

Disciplinary actions taken against real estate brokers and agents by the DRE have spiked 60% over the last three years, revealing an unsettling trend as we emerge from the depths of the real estate market crash. As the California real estate market stalled and opportunities for thousands of newly-minted (read: inexperienced) real estate professionals halted, cases of abuse began to soar.

To truly understand the significance of this list, you have to put yourself in the shoes of the buyer or seller. In most cases, it is a complaint from buyers and sellers that ultimately causes the loss of license for the professional. The most common violations are of Sections 10176 and 10177 of the Real Estate code.

Violations of section 10176 include misrepresentation, false promise, continued misrepresentation, dual agency, commingling, definite termination date, secret profit, listing-option, dishonest dealing and signatures of prospective purchasers.

Violations of section 10177 include obtaining a license by fraud, convictions, false advertising, misuse of trade name, conduct warranting denial, negligence or incompetence, supervision of salespeople, other dishonest conduct, restricted license violation, inducement of panic selling and failure to disclose ownership interest. Read a much more detailed description of both sections here.

All told, the department reviews upwards of 5,000 complaints a year, and about 20 percent of those result in the department pursuing enforcement actions.