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Duty to report criminal convictions under Cal. B&P 10186.2

Aug 20th, 2015 | By | Category: Real Estate Broker Law

California Real Estate License Compliance Lawyers

Real Estate License Compliance convictions reporting

Introduction

Under California law, when a real estate licensee (either a salesperson or broker) must report certain crimes to the California Bureau or Real Estate (“CalBRE”) or face license discipline such as revocation or suspension.  This blog discusses the duty to disclose criminal convictions, license discipline actions, and indictments within 30 days.

Bonus Materials: Printable cheatsheet re CalBRE failure to report criminal conviction lawyer PDF.

Duty to report criminal convictions – California Business & Professions Code Section 10186.2

Here is what the text of California Business & Professions Code section 10186.2 says:

10186.2. (a) (1) A licensee shall report any of the following to the department:

(A) The bringing of an indictment or information charging a felony against the licensee.

(B) The conviction of the licensee, including any verdict of guilty, or plea of guilty or no contest, of any felony or misdemeanor.

(C) Any disciplinary action taken by another licensing entity or authority of this state or of another state or an agency of the federal government.

To reiterate, “Any disciplinary action taken” against a licensee (again meaning filed, initiated, and/or completed) must be reported to the DRE within the relevant 30 day window. If it is not, the department has the power to discipline the licensee for a violation of 10186.2.

(2) The report required by this subdivision shall be made in writing within 30 days of the date of the bringing of the indictment or the charging of a felony, the conviction, or the disciplinary action.

(b) Failure to make a report required by this section shall constitute a cause for discipline.

The BRE issued an advisory on this duty to report.  As you can see, this statute creates a duty (“shall report”) for real estate licensees of a wide variety of incidents that the BRE will want to review and evaluate to make sure you still possess the character and fitness to act as a real estate professional.  You may be called into a hearing or investigation to explain your disclosure event.

What convictions must be reported?

Crimes that related to the real estate profession must be disclosed.   When considering discipline because of the commission of a crime by the licensee, “the crime or act shall be deemed to be substantially related to the qualifications, functions or duties of a licensee” if it involves any of the following:

  •  Fraudulent acquisition of money or property.
  •  Counterfeiting, forging, or altering an instrument or the uttering of a false statement.
  •  Willful attempt to derive a personal financial benefit by nonpayment of taxes, assessments or levies.
  •  Commission of bribery, fraud, deceit, falsehood, or misrepresentation.
  •  Sexually related conduct affecting an observer or a nonconsenting participant in the conduct or convictions which require registration as a sexual offender.
  • Willful violation or noncompliance with any provision of the Real Estate Law.
  • Willful participation in any act that requires any license, without the required license.
  • Performance of any unlawful act for financial benefit or with the intent or threat of causing injury to the person or property of another.

Criteria for rehabilitation/denial.  The following criteria are to be used in determining whether a licensee is rehabilitated

(1) The passage of not less than two years (more if there is a pattern) since the most recent criminal conviction that is a basis for denial for the action sought.(2) Restitution of any person who suffered a monetary loss.

  •   Expungement of criminal convictions.
  •  Successful completion or discharge from parole or probation.
  •  Abstinence from the use of alcohol or controlled substances for at least two years if the conduct that was a basis for a denial is attributable to such use.
  •  Payment of any fine or penalty.
  •  Stability in family life.
  •  Completion of or sustained enrollment in formal educational or vocational courses.
  •  Discharge or bona fide efforts towards discharge of any adjudicate monetary judgments.
  •  Correction of prior business practices that caused injuries.
  •  Significant or conscientious involvement with community, church or privately sponsored programs.
  •  New and different social or business relationships from those that existed at the time of denial.
  •  Change in attitude as shown by testimony from applicant and others, evidence from probation and parole officers.

The rule states any felonies or misdemeanors

Yes.  Felonies are any crime that carries a prison sentence of one year or more.  A misdemeanor is one your or less.

Which crimes are “substantially related” to the “duties, qualifications, and functions” of the real estate profession

See above.

Will I lost my real estate license for sure if I was convicted of a felony?

According to one publication – Suspension or revocation of license upon conviction of a felony.

“A license will automatically be suspended during any time that the licensee is incarcerated after a conviction of a felony (even if appealed). The licensee is entitled to written notice of the suspension and his or her right to have a hearing on the issue of a penalty as further specified. Even if a felon is not incarcerated, the license may be suspended if it is determined by an Administrative Law Judge that the felony was substantially related to the qualifications, functions, or duties of the licensee. Convictions of crimes related to dangerous drugs or controlled substances or other specified crimes are conclusively presumed to be substantially related to the qualifications, functions, or duties of the licensee and no hearing is required on this issue. However, on its own motion or for good cause shown, the Commissioner may decline to impose or set aside the suspension when it appears to be in the interests of justice. Bus. & Prof. Code, § 10186.1.”

Should I hire a lawyer to represent me?

While you can probably do this on your own, as experienced real estate professionals we believe we can submit a better package than you, and tell a better story than you can.  When you write, you write subjectively.  We view your case objectively and write about it objectively and with a flare for persuasive writing and negotiation skills, we believe you should defer the case to one of our highly skilled real estate lawyers, and allow us the pleasure seeking to resolve your case.

BRE compliance Resources

1.  Cal RE 238 for Filing Criminal activity or licensing history report

Contact our real estate compliance law firm

We are specialists in the area of real estate broker and agent defense. We have a history of over ten years working with the BRE and the DBO (Department of Business Oversight).  We have helped saved many licenses, obtain broker and sales-person licenses through admission cases, help obtain over 60 advance fee agreements, help in broker audits, investigations and hearings and in responding to subpoenas.  Please contact us at (877) 276-5085 or fill out the contact form below to have one of our BRE compliance representatives contact you, normally within the hour.  Please leave your best contact phone number.

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