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.

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

Now to your question of whether you’re likely to collect any money out of this case? I’d file that under the category "very unlikely."

First off — this "case" is actually a disciplinary matter, not a civil case for damages. An outcome against your former "agent" will impact her license or that of her employer, and might even involve a fine or penalty, but not an award to you. If you feel that you were damaged in some way by your "agent’s" lack of licensure, you certainly have the right to bring a civil lawsuit and attempt to prove how you were damaged.

However, the fact that you were not even aware that the "agent" was unlicensed suggests to me that you were not unhappy with the outcome of your transaction — until you were notified by the licensing agency.

If she were a total impersonator — meaning that she was not employed by a licensed brokerage, broker or agent and she was not just late getting her continuing education requirements completed — she could end up in criminal trouble with the district attorney. Under Section 10139 of the California Business and Professions Code, an unlicensed individual can be punished for committing acts requiring a real estate license by up to six months in jail and a $20,000 fine, and a company can be fined up to $60,000.

However, these fines are designated, by statute, to go to your county’s real estate fraud prosecution trust fund — not to you!

Of course, if she were criminally prosecuted and convicted, and if you were truly harmed by the unlicensed agent, and if you can document it, and if she were to be convicted criminally, you would have the opportunity to make the case that she should be ordered to pay you restitution.

And if she could afford to pay it, and if she paid it, then you’d get some cash out of this drama. I should point out — that was seven different "ifs" that would all have to happen, and some of them were pretty unlikely ifs.

Here’s the much more likely if: If the deal went through without a hitch and you’re happily ensconced in your new home, you might consider just being grateful you weren’t damaged by this potentially harmful situation, cooperate with the Department of Real Estate like the upstanding citizen you are, and count your blessings.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.

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