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Don’t plead guilty if you have a real estate license

Oct 18th, 2014 | By | Category: Real Estate Broker Law

Real Estate Broker Accusation Lawyer

substantially related to real estate lawyer


If you are a real estate licensee in the State of California, and you are charged with a crime (felony of misdemeanor) before you plead guilty or nolo contendre (no contest) call our law firm to make sure you are not basically setting yourself up to lose your real estate license.  We have seen this scenario many times and this blog is a caution to review all circumstances before you give in to your criminal lawyer and into the district attorney or attorney general.  While this is not to say don’t trust your criminal attorney, it is to say consider the consequences of pleading guilty before you do it.  Many criminal lawyers have no clue of the impact on your real estate, appraiser, broker or mortgage lending real estate license.

Common scenario

Say you are a real estate broker and you have a “rogue agent” who is out doing deals behind your back.  The salesperson hangs their license with your real estate brokerage, and you have a “duty to supervise licensed real estate activity.”  But at the same time you have “no guilty knowledge” of what this rogue agent is up to (let’s say its a loan modification scam and the salesperson is collecting “advance fees” for modifications and then performing no work and taking the money).  Obviously the real estate agent is a fraduster and can be prosecuted for his or her role in the fraud.  But when there are many victims who are out money, the district attorney may try to bring conspiracy or aiding and abetting charges, (other other charges such os fraud, theft, petty theft, obtaining money by false pretenses, etc.).  In other words, it is a “guilt by association” type of case.  In this scenario, the prosecutor would want to seek “restitution” for as many victims as possible, and the broker could be charged with a serious of crimes and face both felony and misdemeanor charges.

What then happens is the broker retains criminal law counsel who informs them “I will fight for you and take this to trial, I am the best criminal law attorney on the planet and I have a 100 acquittals, etc.  Then, as a broker you retain the attorney and hope to get the charges dropped – only to find out the best you can get is a plea deal (dropping the felony to a misdemeanor, and asking for a large sum of money in restitution to the victims of the fraud.

While it is tempting to take the settlement offered by the DA and plead guilty to a misdemeanor (which avoids jail time), you have to also understand the potential impact to your real estate license.

In my experience, with all due respect, most criminal lawyers do not take the time to investigate this aspect of your “plea deal” and do not investigation the risks to continuing with your real estate license.  Realize, once you plead guilty, this will become a public record with the California Department of Justice, and then the BRE (Bureau of Real Estate, formerly the DRE – Department of Real Estate) will get wind of this.  You, as a licensed real estate professional, would also have a duty to disclose your criminal conviction to the real estate board.  The real estate board may then decide to restrict or revoke your real estate license.  This is where the dilemna comes in.  As the title of this article suggests, do not plead guilty until you fully understand the ramifications of a guilty plea on your real estate license.  You may think twice and want to take your case to trial, or try to get the prosecutor or district attorney to amend the complaint to include lesser or different charges (getting rid of the “theft” “fraud” and “specific intent” crimes, and possibly pleading guilty to a regulatory offense or just taking your case to a jury trial).

The dynamics of hiring a criminal defense lawyer

I started my career in the field of criminal defense.  I was a member of the National College of DUI Defense.  I understand a few things about retaining criminal counsel, here are a few insights I would like to share:

1.  There are two basic kinds of lawyers and criminal law firms (and lots of other types in between) – those that want and desire to take cases to trial, and those that like to settle cases after giving you a lot of talk about what great trial lawyers they are.  You need to understand what type of attorney you have and what you paid for.  If you paid a retainer of $3,000 flat rate fee, you cannot expect the attorney to take your case to trial.  Trials are time consuming and expensive.

2.  Going to trial is expensive and time consuming, so if you didn’t pay your lawyer a whole lot of money (or if you don’t have money to go to trial) this can be a big concern, and if you truly believe you are innocent and want to fight, you might have to seek alternative law firms to fight for you.  Again, not all lawyers want to do a trial.

3.  You might want to get a second opinion on the real estate licensing aspects of your case.  For example, if you plead guilty to rape, robbery, burglary, writing bad checks, extreme DUI, obtaining money or property by false pretenses, etc., will this result in an administrative hearing with the Bureau of Real Estate wherein your real estate license (i.e. your livelihood) is on the line.

4.  You should plan your case from outset, whether you think you are going to trial or not, and get the kind of attorney who will accommodate your needs taking into account your real estate license. Some people are surprised to learn that it could cost anywhere from $20,000 to $50,000 to take your case to trial.  This means you might have to borrow money from friends and family, obtain a loan from a bank, or sell your car, boat, truck, RV, jetskis, coin collection, sports memorabilia, stocks etc.  The key is to have a strategy mapped out in advance, while you are retaining criminal counsel.

California Business & Professions Code Section 10177

 Cal. B&P 10177 is the law that allows the real estate commissioner to suspend or revoke your real estate license when you plead guilty to a crime.  Here is what the section says:

10177.  The commissioner may suspend or revoke the license of a real estate licensee, delay the renewal of a license of a real estate licensee, or deny the issuance of a license to an applicant, who has done any of the following, or may suspend or revoke the license of a corporation, delay the renewal of a license of a corporation, or deny the issuance of a license to a corporation, if an officer, director, or person owning or controlling 10 percent or more of the corporation’s stock has done any of the following:

(a) Procured, or attempted to procure, a real estate license or license renewal, for himself or herself or a salesperson, by fraud, misrepresentation, or deceit, or by making a material misstatement of fact in an application for a real estate license, license renewal, or reinstatement.

 (b) Entered a plea of guilty or nolo contendere to, or been found guilty of, or been convicted of, a felony, or a crime substantially related to the qualifications, functions, or duties of a real estate licensee, and the time for appeal has elapsed or the judgment of conviction has been affirmed on appeal, irrespective of an order granting probation following that conviction, suspending the imposition of sentence, or of a subsequent order under Section 1203.4 of the Penal Code allowing that licensee to withdraw his or her plea of guilty and to enter a plea of not guilty, or dismissing the accusation or information.

This is what we call the “substantially related” test.  The section talks about being convicted or pleading guilty to a “felony” “or a crime…” (meaning misdemeanors are covered – note these are often the subject of criminal settlement offers).

But just what amounts to a crime that is substantially related to the “qualifications, functions or duties” of a real estate license is not always clear.  But that being said, you have to look at the BRE guidelines on this topic.  Here is a page which discusses common grounds for denial of a real estate license RE 229 and this should give you some guidance in making the determination of whether or not you should plead guilty or no contest in your criminal case, or fight it and take it to trial:

These are the Types of crimes that could cost you to lose your California real estate broker of salesperson license!!

pleading guilty to a crime real estate license consequences

Attorney Steve’s Top 5 tips before accepting the guilty plea or pleading no contest to a crime which might impact your real estate sales or mortgage NMLS license (which will also impact property managers):

1.  Discuss your real estate license with your criminal defense lawyer to make sure they understand all the implications of pleading guilty;

2.  Find out if your attorney plans to settle the case or take the case to trial;

3.  Find out in advance how much trial fees are to make sure this is understood;

4.  Have your real estate licensing lawyer discuss the impact of settling on your real estate license;

5.  If you need real estate counsel to assist in your criminal defense (real estate crimes do have some special issues involving broker standards of care, duties, and issues like advance fees and SB94 may require that you have a real estate lawyer on your criminal defense team.  We are able to co-counsel with you attorney assuming all parties can consent.

Remember, OJ Simpson made his life better by hiring a “dream team” to help him fight the criminal charges against him.  This might be the perfect fit in your case as well.

Contact a DRE / BRE real estate licensing law firm

Attorney Steve Vondran is a attorney and broker licensed in both California and Arizona.  We have offices in San Diego, Los Angeles (Beverly Hills) Orange County (Newport Beach), San Francisco (servicing bay area and Oakland, Sacramento), and Phoenix, Arizona.

We have helped over 60 brokers obtain legal “advance fee agreements,” and represented numerous real estate licensees in a disciplinary matters involving accusations involving potential suspension and/or revocation of your real estate license. and “cite and fine cases” where up to $2,500 fines can be imposed for real estate law violations.

Contact us for a free consultation at (877) 276-5084.  Or fill out the form below to have one of our real estate lawyers contact you, usually within the hour.












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