California BRE FAQ regarding removal of license restrictions
Following an accusation made by the California Bureau of Real Estate (“CalBRE”) the case often gets settled with the broker (or sometimes a salesperson) settling the case with a “restricted license.” A restricted license basically means that the real estate licensee has handed over their “due process rights” (i.e. a right to a hearing if there is a complaint affecting their real estate license), which makes it ultra important that the broker not commit any further real estate law violations during the restricted period (sometimes 2 years, 3 years or 4 years). Having a restricted license is not the end of the world, but it removing the restrictions is something every licensee should consider doing. You want your due process rights back for one. You also don’t want to explain to clients why you have a “restricted license.” When you want to apply for your real estate broker’s license, removing restrictions is a showing of good faith and can be considered as a mitigating factor in reviewing the salesperson for character and fitness for the broker’s license. This blog provides a few tips if you are seeking to remove your licensing restrictions.
Free Checklist for agents and brokers thinking of filing a petition
Tips to avoid being denied removal of licensing restrictions
In order to make the required showing of rehabilitation to the DRE, the following, at a minimum should be considered in submitting your package and application to remove restrictions:
1. Get as many character reference letters as possible. Letters attesting to your character are very important to show that you have the right associations and circle of friends, and these people are in the best position to attest to your good character and reputation. Some possible letters to be thinking about are:
- Clergy, priest, religious and spiritual advisors
- Business associates
- Spouses and partners
- Leader of volunteer activities you have been involved with
- Past business clients
These letters should talk about your reputation for honesty and integrity, reputation, change in character, maturity levels, work habits, and/or sharing a special “wonderful moment” story that highlights what a great man or woman (person) you are.
2. Clear up any outstanding criminal law issues (pay any outstanding restitution order or seek expungement of crimes that are eligible to be cleared from your record) and have copies and proof that all conditions to probation have been satisfied and all fines and fees paid in full. Showing you “paid your debt to society” often goes a long way. We all make mistakes, but clearing up your past and making amends to victims is usually a required element to show your good character. Whether you prior conviction is a felony or misdemeanor, (such as theft, burglary, embezzlement, rape, DUI, reckless driving, shoplifting, copyright infringement of some other crime), you owe it to yourself to make sure all loose ends are tied up and cleared up BEFORE you apply to remove your restrictions.
3. Pay all traffic tickets and fines (get certified copies of paid in full). The CalBRE will pull a Lexis Nexis report to see what you have in your background. This includes traffic tickets that might come up, which again would need to be taken care of to make sure there are no outstanding arrest warrants, fines due, etc.
4. If you have any outstanding court cases or monetary judgements (ex. a HOA lien that was never paid or a default judgment that was entered against you), you may need to report the details of your case 9especially if it involves any allegations against you as a Defendant for fraud, dishonest dealing, misrepresentation, or other issues that impact your moral turpitude) and you will need to get any outstanding judgments taken care of. For example, if you owed a $50,000 debt due to a second mortgage that was foreclosed on, you may need to seek amends. The same holds true for spousal support or child support payments. You may need to have these taken care of as well.
5. Do you have any volunteer, charitable or religious activities? If not, get some, you will want some reference letters from persons who head up these activities as referenced above. If you are not involved in any charitable or volunteer activities, you may want to join one. As I tell many of my Clients, this is something that will help you with real estate networking and so this is important whether or not you were seeking to remove license restrictions.
6. Be prepared to show evidence of financial responsibility. If you have filed bankruptcy (Chapter 7, 11, or 13) you may need to explain the circumstances surrounding the filing. Foreclosures may need to be explained. You may also want to pull your credit report to see what your FICO score is. If you have a solid credit report with high scores (ex. 700+) you may want to submit a copy of your credit report with the submission of your application to remove licensing restrictions.
7. Make sure all FTB lines, IRS liens, County tax liens etc. are paid in full (or at least be able to show you are making payments on these items). Having outstanding tax liens is never something that looks good, so try to get these issues taken care.
Click on the picture to watch general information about restricted licenses in California by BRE Defense Attorney Steve Vondran. Make sure you SUBSCRIBE to our business and real estate youtube channel for future legal updates.
How long does the process take?
The process of removing real estate license restrictions can take several months. It is not something that is going to happen overnight. Figure 60-120 days depending on the workload of the BRE.
Will there be a face-to-face personal interview process?
Yes. Normally the licensee will be called in for a personal interview with the BRE investigator. You will be asked questions about your past, what you are doing now, and will be probed to explain how you have “rehabilitated” your character since the discipline was previously imposed. You want to be sharply dressed for this interview, and show up on time. You also want to make sure you are prepared for the types of questions you might get (our real estate lawyers can help you prepare with a mock interview).
How much does it cost to apply to remove restrictions from your license?
The application fee is currently $800. You can find the RE 506 form here. We offer affordable flat rate fees that are predictable and without the shocking and surprising legal bills. We offer payment in some cases.
If I cannot get approved, can I withdraw my application?
Yes. Sometimes things pop up after your interview (such as a BK, liens, foreclosures, traffic tickets, etc.) that require immediate attention, but sometimes cannot be easily fixed. You can withdraw your petition to remove restrictions without penalty. However, this will become part of your public record maintained in your file and also on the BRE public records database. Once you withdraw your petition, you can re-apply again in one year once everything is fixed and cleared.
Bonus Materials: Click on the picture above to watch Attorney Steve Vondran discuss the importance of removing real estate license restrictions in California. Click on the RED “V” to subscribe to free real estate law updates.
Contact a California real estate licensing lawyer
For more information about our real estate law services contact us at (877) 276-5084. To have one of our CalBRE compliance attorneys contact you please fill out the contact form below. MAKSE SURE TO LEAVE YOUR PHONE NUMBER.
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