FAQ for Real Estate Agents

You have invested significant time and money in becoming a licensed real estate agent. You've studied, taken courses, passed your state's licensing exam, and possibly worked under the sponsorship of a broker for a time. Now, your entire livelihood hinges on your professional license remaining in good standing. That's why it can be such a crisis when someone files a complaint against you with the licensing board, potentially putting your real estate license in jeopardy. Unfortunately, many agents end up losing their licenses simply because they don't understand how to navigate the disciplinary process or how to respond to complaints.

In short, if your license is in question, the more you know about what to expect, the better you can prepare, and the better your chances of keeping your license. For licensed real estate agents in New Jersey and New York, the Lento Law Firm has compiled the following answers to common questions about real estate licensure and how to successfully defend your license against complaints and allegations of misconduct.

What agency do I answer to when someone files a complaint?

Every state has its own licensing board that makes the rules, oversees examinations, investigates complaints, and determines disciplinary actions for real estate agents. In New Jersey, you will deal with the New Jersey Real Estate CommissionMeanwhile, agents in New York deal with the New York Board of Real Estate and the Secretary of State. If you are accused of wrongdoing in these states, these are the respective licensing boards you will answer to.

What types of offenses could cost me my real estate license?

Each state sets its own rules of accepted practice for licensed real estate agents and brokers, and violating these rules can cause your license to be suspended or revoked. However, most offenses that can jeopardize your license will fall into one of the following categories:

  • Fraudulent activity. Any sort of dishonest dealing with colleagues, clients, mortgage brokers, or other agencies can cost you your license. Examples might include misrepresenting your credentials, false advertising, falsifying records (e.g., mortgage fraud), etc.
  • Financial misconduct. Examples might include improper commingling of people's money, sloppy bookkeeping, improper paying/sharing of commissions, etc.
  • Criminal convictions. Being convicted of certain crimes, especially felony offenses or crimes related to fraud, may disqualify you from holding a real estate agent's license.
  • Failure to abide by applicable laws. Examples might include breaking client confidentiality rules, violating the Fair Housing Act, failing to keep up with continuing education requirements, acting outside the scope of your license, or selling real estate with an expired license.

Will I automatically lose my license for breaking the rules?

Not necessarily. The licensing board may choose to invoke other penalties that allow you to keep your license. Examples include:

  • License suspension. You may be temporarily or indefinitely restricted from practice with the option of reinstatement.
  • Fines. The board may penalize you financially.
  • Probation. You may be put on probation for a certain period of time and permitted to continue practicing with conditions.
  • Limitations on your license. The board may impose certain restrictions on your license for certain activities or services.
  • Formal reprimand or censure. The board may issue a written reprimand that appears on your public record.

If I don't lose my license, can these other disciplinary actions still hurt my career?

Yes, they can. Actions taken against your license are generally a matter of public record, and anyone interested can look you up online to see if you have been disciplined by the board. A negative action may affect a client's decision to work with you. It may also discourage real estate firms from hiring you.

What can I expect with the disciplinary process?

Every licensing board has its own rules and procedures for administering discipline, but generally speaking, most will follow a process similar to what we describe below:

  • Complaint. Nearly every disciplinary action begins when someone files a formal complaint against you with the board—whether it's a client, a fellow agent, an employer, or another real estate professional.
  • Investigation. The board will investigate to see whether there is any evidence to support the allegations against you. This process will likely involve asking you to respond formally to the complaint, as well as interviewing the complainant, reviewing documents, talking to any witnesses, etc.
  • Informal hearing. Some licensing boards will invite you to participate in an informal hearing to discuss the complaint, get your side of the story, and determine whether to move forward. If there is evidence to support the complaint, the informal hearing may also provide an opportunity to negotiate a consent order—a voluntary agreement in which you agree to certain disciplinary actions in order to prevent the matter from going further.
  • Formal hearing. If there is no resolution at an informal hearing and/or no consent order, the matter moves into a formal hearing, which may take place either before the board or before an Administrative Law Judge.
  • Determination and board action. At the conclusion of the formal hearing, the board makes a final decision on what disciplinary action to invoke.

Is it better to agree to a consent order to avoid a formal hearing?

That depends. A consent order is basically an admission of wrongdoing, so it will still go on your public record, even if it means you get to keep your license. It might be a good alternative to a formal hearing, especially if the board has enough evidence to support the complaint and if it saves your license. But it's also important not to agree to a consent order without knowing all your options. It's best to consult with an attorney before agreeing to a consent order.

Can I try to resolve the complaint informally without hiring an attorney?

You have the right to represent your own interests to the licensing board without an attorney—and that option might be tempting, especially if the board invites you to an informal hearing. However, you will likely not receive the best possible outcome without the help of an attorney. Here's why:

  • The licensing board is not your ally. Despite any offers at informal negotiations or consent orders, the board does not exist to protect you, but to protect the public. When a complaint is filed, the board works for the complainant, not for you. No matter how willing they seem to work with you, anything you say or do can still be used against you. Hiring an attorney ensures that someone with experience is there to protect your rights.
  • You are at a disadvantage from the outset. Regardless of any intentions to be impartial, the fact remains that the licensing board has more experience with real estate license disciplinary actions than you do—and this puts you at a disadvantage when you're the one being investigated. Having an attorney helps level the playing field and gives you the opportunity to present a fair defense.
  • Legal matters call for legal experts. Your real estate license is a legal agreement with the state, and acts of misconduct constitute of breach of that legal agreement. When a complaint is filed, therefore, your license investigation becomes a legal matter—and for that reason, it's best to have a legal expert in your corner to help you navigate what's ahead.

What happens if I choose not to cooperate with an investigation?

Your real estate license comes with an implied agreement that you will cooperate with any investigation as a matter of accountability. If you refuse to cooperate or refuse to participate in hearings, the board will likely presume your guilt and rule against you summarily. In short, your chances of having your license revoked go up exponentially if you refuse to cooperate.

That being said, cooperation with an investigation does not mean you have to say or do anything that jeopardizes your chances for a fair hearing. You have the right to have legal representation in any interactions with the board or with any investigator.

Does hiring an attorney make me look guilty to the board?

No, it doesn't. Licensing boards are well accustomed to interacting with lawyers. Hiring an attorney to represent your interests in a license investigation does not send a message that you are guilty; it sends a message that you take the allegations seriously and are working to resolve them.

How can a license defense attorney help me?

Hiring an experienced license defense attorney greatly increases your chances of keeping your real estate license, as well as improving your chances for a more favorable outcome. A good attorney can:

  • Help you understand the nature of the complaint against you, the
  • possible penalties involved, and what you can do about it;
  • Help you explore your options and develop a defense strategy;
  • Procure witnesses in your defense and gather supporting evidence;
  • Act as your official legal representative in all interactions with the licensing board;
  • Negotiate with the board at multiple points in the investigation, either to have the complaint dismissed or for a more favorable outcome; and
  • Defend your license in both informal and formal hearings.

My license was already revoked. Can a license attorney help me get it reinstated?

Yes. The state licensing board will have stipulations in place for how to get your real estate license reinstated, and an attorney can help you meet those qualifications. Each state has its own procedures, but reinstatement usually involves a combination of the following:

  • Submitting a formal application for reinstatement
  • Providing a written explanation why you are requesting reinstatement of your license
  • Paying any applicable fees and outstanding fines
  • Getting up to date on any continuing education requirements
  • Meeting any/all pre-requisites or mandated actions to qualify for reinstatement
  • Submitting to any plan of action prescribed by the board to qualify you for reinstatement

When applying for reinstatement, a license defense attorney can help coordinate the process by filing your paperwork and fees, interfacing with the licensing board regarding your application status, and negotiating on your behalf for the best terms of reinstatement.

I just found out my license is under investigation. How soon do I need to get an attorney involved?

The sooner, the better - waiting until you're in the midst of a formal hearing in an Administrative Law courtroom to hire an attorney means that you're starting out on the defensive and is a misguided approach. By involving an attorney as early as possible in the process, you have more opportunities to resolve the complaint, keeping your license intact, and possibly avoiding any long-term damage to your career.

As a real estate professional, your entire career hinges on your license. If that license is jeopardized by a complaint or allegations of wrongdoing, it can make for an uncertain future. You owe it to yourself and your hard-won career not to take unnecessary risks with your real estate license. Joseph D. Lento has an established track record of success defending licensed professionals who are in danger of losing their credentials. If you are facing disciplinary action from the real estate licensing board in New Jersey or New York, improve your chances of a positive outcome with attorney Joseph Lento's help. Call the Lento Law Firm today at (888) 535-3686 to discuss the details of your case and explore your options.


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