Violence not the only real estate peril

Editor’s Note: This article is the second of a three-part series focusing on the personal safety of real estate agents. This first article in the series focused on best practices to observe while conducting open houses. This article examines statistics on violent crime and other on-the-job hazards in the real estate industry, and regulatory efforts to weed out criminals in the licensing process. The final article in the series will highlight lessons agents have gleaned from personal experiences.

Although violent crimes against real estate agents are highly publicized, industry professionals must navigate a broader range of hazards while on the job, according to the latest figures from the Bureau of Labor Statistics.

In 2009, the latest year for which the BLS has released statistics, there were 52 workplace fatalities in a BLS-defined real estate industry subcategory, which includes lessors of real estate, real estate agents and brokers, and those who conduct activities related to real estate, such as property managers and appraisers.

The subcategory is part of a more broadly defined “real estate and rental and leasing” BLS category.

Ten fatalities were attributed to transportation incidents and another 10 to falls. The largest share, 24, were results of “assaults or violent acts.” These include assaults by others, self-inflicted injury, and attacks by animals.

Out of more than 90 industries listed in a BLS report, only 10 other industries had higher absolute numbers of violent work-related fatalities in 2009 than the real estate industry and, of those 10, only three had a higher share of such fatalities as a proportion of all work-related fatalities in that industry.

Source: U.S. Bureau of Labor Statistics

In the BLS-defined real estate and rental and leasing industry category, the incidence rate of nonfatal occupational injuries as a result of assaults and violent acts was 3.5 per 10,000 full-time workers. Among all industries in the private sector, that rate is 2.5 per 10,000 full-time workers.

Nevertheless, the vast majority of the violent fatalities (17 of 24) in the real estate industry occurred among lessors of real estate. Five occurred while engaging in “activities related to real estate,” such as property management or real estate appraisal.

There were no violent fatalities among real estate agents and brokers reported that met publication criteria, according to BLS data. Of five fatalities among agents and brokers, three were due to falls while the causes of the other two are not categorized.

In order to be included in the data, an attack had to have taken place while on the job. A cursory search of news reports calls up at least five agents whose deaths were investigated as homicides in 2009. Only one — the death of an agent in Westchester, Calif., whose body was found at a listing — might qualify as work-related.

Between 2003-08 there were 25 violent, work-related fatalities among agents and brokers, according to an analysis of BLS data from the National Safety Council.

Among the real estate industry’s 500 nonfatal work-related injuries inflicted during “assaults and violent acts” in 2009 that led to missed days of work, lessors of real estate accounted for 240 of those, while real estate property managers accounted for 220. If there were any such injuries reported among real estate agents and brokers, they did not meet publication guidelines.

Of 1,140 total nonfatal work-related injuries among real estate agents and brokers, 45.6 percent involved “contact with objects,” which included being struck by or against an object. Falls accounted for 22.8 percent of injuries, overexertion accounted for 8.8 percent, “exposure to harmful substance or environment” accounted for 10.5 percent, and “all other events,” which includes nonclassifiable responses, accounted for 6.1 percent.

When criminals want to join the industry

To protect real estate consumers and real estate professionals alike, most states have some safeguards in place to block some types of criminals from joining the industry. Fingerprinting and/or criminal background checks are the most common methods used to weed out malefactors in the licensing process.

Requirements to obtain a real estate license vary by state. About half the states require fingerprinting for prospective real estate licensees. Most states require some type of criminal background check on real estate license applicants; only 14 states and Washington, D.C., do not, according to data from the Association of Real Estate License Law Officials (ARELLO), an organization for real estate regulators.

Of the 36 or so states that do require an applicant’s criminal history, 25 check applicants against either FBI or state records, and often both.

At least 14 states and Washington, D.C., do not require either fingerprinting or a background check to obtain a real estate license, including Alaska, Illinois, Louisiana, Maine, Maryland, Massachusetts, Mississippi, Montana, New York, Pennsylvania, South Carolina, Tennessee, Vermont and West Virginia.

According to the latest edition of the ARELLO annual report, “2011 Digest of Real Estate License Laws and Current Issues,” regulators in some of these states noted that their respective states were taking steps to require fingerprinting.

Regulators in Illinois, for example, reported, “Still contemplating fingerprinting — inevitable.” Louisiana: “Working to change this.” Missouri: “Effective Jan. 1, 2011, all licensees and applicants will be required to provide fingerprints.” North Dakota: “Will be requiring FBI fingerprinting.”

Even among some states that didn’t require fingerprinting or background checks at the time the latest ARELLO report was published, regulators reported that self-disclosure of criminal convictions was required. In New York, for example, applicants are required to disclose whether they have ever been convicted of a crime in the state or elsewhere, or if there are any criminal charges pending against them.

“Conviction of a serious crime — felonies, sex offense — bars an individual from licensure as a real estate broker or salesperson unless the applicant has received and can produce a certificate of relief from civil disabilities, certificate of good conduct or executive pardon. In these cases, an evaluation process for licensure is followed, as set forth in (corrections law),” said Jorge I. Montalvo, director of strategic initiatives at the New York Department of State.

The department rejects about 6 percent of applicants based on criminal convictions, Montalvo said.

In Idaho, a real estate license may not be granted to an individual who has been convicted of or completed a sentence for a misdemeanor “involving fraud, misrepresentation or dishonest or dishonorable dealing” within five years before applying for a real estate license.

Applicants in that state are also barred from obtaining a license within five years of being convicted of any felony. After five years, the applicant may submit a request for a review to determine his or her suitability to receive a license.

California‘s Department of Real Estate (DRE) has denied an average of about 1,000 license applicants every fiscal year since 2004, mostly due to criminal convictions. The bulk of those denials occurred during the boom years — 1,384 applications were denied in 2006-07, for example, compared to 359 in 2009-10 — as a result of a drop-off in applicants after the housing downturn, said Tom Pool, a department spokesman.

Crimes involving theft and multiple drunk-driving convictions are likely the top offenses that result in denial, Pool said, though he added that he could not be sure without looking at each individual record.

“Once licensed, we are notified by the (state Department of Justice) when a licensee is arrested. We are then able to determine if the arrest results in a conviction of a crime that is substantially related to real estate — and if so, we can file an accusation to get the license disciplined,” Pool said.

“Cases are heard in front of an administrative law judge  who recommends the punishment — which could be dismissal, suspension or revocation.”

The DRE keeps track of all disciplinary actions against licensees. In May, there were some 20 licensees disciplined for a “substantially related criminal conviction.”

In the realm of safety, such a conviction includes the “doing of any unlawful act … with the intent or threat of doing substantial injury to the person or property of another.”

The Washington Department of Licensing denies an average of 15-20 applicants a year due to criminal convictions.

“We look at all gross misdemeanor and felony crimes that occurred within the last 10 years. The one exception would be if a person is a registered sex offender; we will go beyond the 10 years for denial of a license,” said Christine Anthony, department spokeswoman.

“Each applicant is looked at on a case-by-case basis. We would look at the age of the applicant when they committed the crime; whether the crime was a one-time incident; whether the crime is related to the practice of real estate; and rehabilitation of the applicant, including holding positions of trust.”

Some states frame their licensing requirements in the language of “moral character.” In Texas, for example, applicants are required to be of “high moral character,” which means they should lack convictions for felonies or misdemeanors other than minor traffic tickets.

Individuals with questionable records may file an application for “moral character determination” to establish if they are eligible for a license before taking on the expense of fulfilling educational requirements and filing other paperwork, according to the Texas Real Estate Commission.

In New Jersey,  the applicant must provide evidence of “good moral character,” and the state real estate commission must be satisfied “as to the honesty, trustworthiness, character and integrity of an applicant.” Applicants must provide fingerprints and consent to a criminal background check.

“Any conviction could, but not necessarily, result in the denial of a license. Crimes like theft, burglary, robbery, forgery, fraud and criminal conspiracy are automatic disqualifiers under (a New Jersey statute). Under that statute, no license can be issued if there has been that type of conviction within the past five years,” said Marshall McKnight, spokesman for the New Jersey Department of Banking and Insurance.

“However, we review all criminal history reports because other crimes could also disqualify an applicant where the underlying conduct demonstrates dishonesty, lack of trustworthiness, poor moral character, etc.  This is especially true where the conviction is recent, or if the applicant is on probation or parole.”

Any applicant who is denied has the right to an appeal and a hearing by the full commission, McKnight added.

According to the National Association of Realtors’ legal counsel, Michael Thiel, if a member is convicted of a crime that involves the member’s real estate-related activities and transactions, then he or she may also be charged with a violation of the NAR Code of Ethics.

“It should be noted that there would still need to be a hearing, but any hearing as to whether or not a violation of the code has occurred would happen after the completion of the criminal trial,” Thiel said.

“This is done to assure that the member’s due process and constitutional rights are not interfered with by the member’s participation in the proceeding conducted by the association.”