Buyer wronged by unlicensed agent?

Q: I just got a notice from my state's Department of Real Estate that the woman who sold me my home was not licensed at the time. They are asking me to testify in a disciplinary proceeding. How did this happen? Is there any chance I could recover any money from this case?

A: This probably happens more than you would think. How? Well, most often, a licensed broker or agent whose license has been suspended or, less culpably, has lapsed because they haven't paid their licensing fees or kept up with their continuing education requirements is the "unlicensed individual" found performing acts requiring a license.

This also happens commonly when an unlicensed assistant to a licensed broker or agent performs activities outside the scope of what is permissible, including (in most states) showing properties or drafting and explaining contractual documents to a buyer or seller.

My guess is that one of these describes your situation. The fact that the Department of Real Estate is involved signifies that either your "agent" or their employer was or is now licensed, because the Department of Real Estate has no jurisdiction to bring a disciplinary action against an unlicensed person. If your "agent" was totally unlicensed and not affiliated with a licensed company or person, the district attorney would be the authority prosecuting the matter.

This is why many states, our shared home state of California included, are now moving to require agents to include their license number on all "solicitation materials," including business cards, Web sites, e-mail blasts and other likely points of first contact with potential real estate consumer clients. This makes it easier to double-check whether an agent is licensed, what the status of their license is at any given time, and whether an agent has a disciplinary record before you hop in the car to start your house hunt.

While this is the one foolproof method for verifying whether an agent is licensed, it does seem like overkill in the average case. The vast majority of people who represent themselves as real estate brokers or agents actually are licensed, and if you find your broker or agent by referral from a happy, recent client, the chances of them having licensing issues are even less likely. ...CONTINUED

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