A real estate license is every practitioner's lodestar. Nonetheless, thousands of real estate professionals, including sales associates and brokers, lose their licenses each year. Some are wrongdoers; others are incompetent. Still, other ex-licensees are victims of circumstance. Don't be one of them. You can avoid these problems by being more professional and transparent, documenting your actions, and keeping more thorough records.
If you face threats to your Alabama professional real estate license, do not try to navigate this alone. Talk to an experienced Lento Law Firm professional license defense attorney who can offer wise counsel and help you quickly prepare an effective strategy. Contact our Professional License Defense Team at the Lento Law Firm online or by calling 888 535-3686.
Financial mistakes are among the fastest routes to losing your real estate license. Sloppy bookkeeping, money shuffling, and “borrowing” are red flags. Brokers should avoid deducting any commissions or expenses until after a transaction closes. Licensees can also have trouble through sloppy bookkeeping. This is particularly a problem with property managers, who are charged with more complex accounting than a typical broker.
Misrepresentation, embellishment, obfuscation, and omissions can lead to license suspension. Disclosure—or the lack thereof—is a common offense leading to lawsuits against licensees. According to various sources, the most common misrepresentation offenses are in property conditions and environmental disclosures.
Different states place different levels of responsibility on the licensee's shoulders, and licensees need to learn how much disclosure they must offer. The simplest solution is “When in doubt, disclose and do it in writing.” When licensees don't disclose their true relationship to a transaction, it usually leads to license revocation.
Mortgage fraud falls in between stealing and lying. This crime is so commonly committed that many people—borrowers, mortgage brokers, appraisers, and real estate practitioners alike—don't realize it's illegal. The basis of mortgage fraud is when a lender is tricked into lending too much money against overvalued property. Sometimes, a buyer is short of cash for the downpayment, and the real estate professional reworks the deal so the buyer borrows extra beyond the cost of the house itself to cover the down payment
Even if you don't lose your license—and you weren't aware that you were participating in mortgage fraud—the results can be almost as bad. The U.S. Department of Housing and Urban Development is known to stop dealing with licensees simply because they were implicated in mortgage fraud.
The Alabama Real Estate Commission (AREC) is the government body that licenses and regulates real estate brokers in Alabama:
- Purpose. AREC aims to protect the public interest in real estate transactions by ensuring that agents are qualified and ethical.
- Membership. AREC, which is part of the Alabama Department of Commerce, consists of seven members appointed by the governor.
- Becoming an Alabama Real Estate Broker. To become a real estate broker in Alabama, you must:
- Complete a 60-clock-hour course approved by AREC
- Hold an active salesperson's license for 24 of the 36 months before application
- Take and pass the Broker's examination within six months of course completion
Problems that Licensed Alabama Real Estate Brokers May Face
Licensed real estate brokers in Alabama may face a variety of challenges, including:
- Legal regulations. Real estate brokers must comply with legal regulations, such as fair housing laws, which prohibit discrimination based on race, sex, sexual preference, gender, national origin, and other factors.
- Disciplinary actions. AREC may fine real estate brokers for penalties and damages if they violate regulations, hurt a client, or misbehave in a real estate transaction.
- Conflict of interest. Real estate brokers are prohibited from acting for more than one party without the knowledge of all parties.
How Identity Theft Could Affect Your Professional Real Estate License
As a licensed Alabama real estate professional, you are a potential target for identity thieves. They have many methods for stealing your identifying information, including credit card numbers, addresses, and Social Security Numbers. If your identity is stolen, you may be concerned about how this incident could impact your professional license. Could your license be at risk because your identity was stolen?
Identity theft happens when a thief steals your personal information without your knowledge to commit fraud or theft. Knowing how to guard your personal information is your first defense against identity theft. Identity theft is often a silent crime. Experienced identity thieves may use your information for months—even years—while you remain unaware.
Identity theft can indirectly affect a real estate license in Alabama through a criminal record generated in the thief's name. If law enforcement reports the conviction to your licensing board, they may investigate and suspend or revoke your license.
Identity theft can negatively impact a real estate license in Alabama in many ways, including:
- Using your identity to commit a crime. If someone uses your identity to create a fake ID that is used to commit a crime, your license could be denied.
- Misconduct on the job. If someone uses your identity to commit misconduct on the job, your license could be investigated.
- Fraudulent listings. Fraudsters may post your listings, name, and photograph on different platforms to attract property buyers. They may also use your image and name to attach to a fake listing for a property that isn't even for sale.
To protect yourself from identity theft, you can:
- Actively search for your name and license number to see if it is being used to market or sell real estate without your permission.
- Search multiple variations of your name, including your full name with a middle name or initial, just your first and last name, or a shortened version of your name.
- Search your real estate license number.
AREC can investigate a licensee's actions and records based on a verified complaint or on their own. If probable cause is found, AREC can revoke or suspend a license, impose a fine, or reprimand the licensee.
Alabama Investigation Process for Licensed Real Estate Professionals
AREC is responsible for ensuring that real estate professionals are trustworthy and have a reputation for honesty and truthfulness. AREC may:
- Reject applications. AREC may reject applications from people convicted of a felony or a crime involving moral turpitude.
- Revoke or suspend licenses. The Commission may revoke or suspend a license if a licensee is guilty of certain acts.
- Impose fines. AREC may impose a $100 to $2,500 fine if a licensee is guilty of certain acts.
- Reprimand licensees. The Commission may reprimand licensees if they are guilty of certain acts.
Due Process for an Alabama Real Estate Investigation
Due process is a formal way of ensuring fairness during an investigation. In the context of an Alabama real estate investigation, due process can include:
- Notice. The accused party must be given sufficient notice of the investigation, including the nature of the allegations and how they can present their objections.
- Hearing. The accused party must be allowed to be heard at a formal hearing, which can occur before an administrative panel, such as AREC.
- Evidence. The Commission will present evidence to support the allegations, and the accused party can present evidence and cross-examine AREC's witnesses.
- Appeal.Any order made by AREC can be appealed to the Alabama Circuit Court.
The Commission has the authority to enforce the license law for both licensed and unlicensed real estate professionals. AREC can impose fines, reprimands, license suspensions or revocations, and other sanctions.
Consequences of an Alabama Real Estate Investigation
The consequences of an AREC investigation can include:
- Fines: The commission can impose a fine of up to $2,500, depending on the severity of the violation.
- License suspension or revocation: The Commission can suspend or revoke a licensee's license.
- Continuing education: The commission can order the licensee to complete continuing education courses.
- Restitution: The commission can order the licensee to make restitution to accounts containing funds for other parties.
- Cease and desist order: The commission can issue a cease-and-desist order for unlicensed activity.
AREC can investigate the actions of licensed real estate agents and unlicensed real estate practitioners. AREC can investigate independently or in response to a written complaint. The Commission can subpoena witnesses and records and require a mental examination.
Any order entered by the Commission can be appealed to the Alabama Circuit Court. If a licensee is found guilty of violating License Law, the Commission may impose a fine, reprimand the licensee, and suspend or revoke the license.
What Happens If You Lose Your Alabama Professional Real Estate License?
If you lose your real estate license in Alabama, you may face many consequences, including:
- Fines. AREC can impose fines for violations of the License Law.
- License suspension or revocation. The Commission can suspend or revoke your license if you violate the License Law.
- Continuing education courses. AREC may order you to complete continuing education courses.
- Restitution. The Commission may order you to make restitution to accounts containing funds for other parties.
- Cease and desist order. If you practice real estate without a license, AREC may issue a cease-and-desist order.
In most cases, you can apply for a petition to get your license back after one year if you resolve the issues that led to the revocation and pay any related fees. You can avoid losing your license by:
- Completing your continuing education early
- Being transparent with clients
- Maintaining excellent records
- Serving all clients equally and
- Cooperating with regulatory agencies
Why Hire a Lento Law Firm Professional License Defense Attorney
AREC rules can be intricate, and an attorney must interpret them accurately to identify potential defenses and legal strategies. A Lento Law Firm professional license defense attorney with experience in real estate licensing matters can efficiently navigate the formal complaint process, including hearings and appeals. If the complaint involves potential license suspension or revocation, our attorneys can advocate strongly to minimize the impact on your ability to practice real estate.
Our Lento Law Firm Defense Attorneys know Alabama's threats to real estate professional licenses are more than administrative matters. Our attorneys help real estate brokers who are under investigation by AREC:
- Responding to a complaint:Attorneys can help brokers respond to a complaint before the deadline.
- Defending against allegations: Attorneys can help brokers defend against misconduct allegations.
- Obtaining a favorable outcome: Attorneys can aim to help brokers obtain a favorable outcome, which may be less costly at the inquiry stage than at a formal hearing.
- Working out a resolution: The Lento Law Firm has a good working relationship with AREC and can often work out a resolution without a formal hearing. Brokers can discuss their situation with a Lento Law Firm professional license defense attorney to decide whether to obtain legal representation.
Our Lento Law Firm Professional License Defense Team Can Help You
If you face threats to your Alabama professional real estate license, do not try to navigate this alone. Talk to an experienced Lento Law Firm professional license defense attorney who can offer wise counsel and help you quickly prepare an effective strategy. Contact our Professional License Defense Team at the Lento Law Firm online or by calling 888 535-3686.
