Idaho's real estate professionals provide an invaluable service to clients and customers buying, selling, and leasing property throughout the state. In the effort to ensure all transactions are made in good faith and support the bests interests of parties involved, real estate professionals dedicate a significant amount of time and effort obtaining and maintaining their credentials. While a majority of state oversight involves financial disclosures and appropriate transactions, licensees risk losing their authority to conduct business even from personal issues.
When the state's licensing authority is aware of violated statutes or professional standards, licensees face investigations that can uncover sanctionable behavior. Even though fines and formal reprimands are common, suspension or revocation are not off the table. Navigating the grievance process requires a clear understanding of administrative procedures, and therefore, requires a legal professional to ensure you don't damage your personal or professional reputation.
The Lento Law Firm Professional License Defense is prepared to be your partner in protecting your ability to conduct real estate business in Idaho. Whether licensees are managing the complaint process, disciplinary hearings, or filing appeals, we can provide the assistance needed to protect your livelihood. Call the Lento Law Firm Professional License Defense Team at 888-535-3686 now or fill out our confidential consultation form, and we will contact you.
Idaho Real Estate Commission
The Idaho Real Estate Commission (IREC) authorizes individuals to conduct activities such as buying, selling, renting, or managing properties. While some states provide different levels of licensure with varying responsibilities, Idaho has a single "primary" real estate license for individuals. For businesses, each entity also needs licensing by the commission and a properly licensed individual designated broker.
Real estate brokers must complete and pass a commission-approved business conduct and office operations course. Moreover, the broker must hold the following legal position within the entity:
- Corporation: Officer
- Partnership or Limited Partnership: General Partner
- Limited Liability Company: Member or Manager
IREC also allows out-of-state real estate brokers to conduct business in the state. With an active broker or salesperson license in another jurisdiction, the commission grants a cooperative license.
There are some exceptions to licensing in regard to transactions, however. Individuals selling their own property or acting as power of attorney for another are exempt. Yet the same does not apply to licensed individuals selling their own property or acting as power of attorney for someone else—they are subject to the IREC regulations.
'Salespersons' and 'Brokers'
While IREC issues one primary type of license to those who conduct real estate business, there are differences in the responsibilities of salespersons and brokers. A salesperson is typically an entry-level licensee who must work under the supervision of a licensed broker. They cannot operate independently or manage their own brokerage; instead, they conduct real estate activities—such as listing properties, showing homes, and helping clients with transactions—on behalf of the broker.
Real estate brokers have the authority to operate a business—as a corporate officer, general partner, or company manager—and oversee other licensees. They can also work independently and take legal responsibility for transactions conducted under their brokerage.
Idaho Real Estate Licensee Prohibited Acts
Professional responsibility standards for real estate licensees are critical to maintaining public trust and ensuring ethical conduct across the industry. IREC addresses matters such as advertising regulations, conflicts of interest, truthfulness in dealings, and personal conduct. Among salespersons, brokers, and others involved with real estate activities and transactions, licensees have explicit duties to clients and customers.
For instance, in regulated real estate transactions, buyers and sellers entering into written contracts with licensees become clients. At that time and moving forward, licensees owe them the following obligations:
- Performing the terms of a written agreement
- Exercising "reasonable" skill and care with all information presented in a "timely" manner
- Promoting the best interests of the client in good faith
- Disclosing all adverse material facts about transactions or real estate assets
- Properly accounting for funds and managing them responsibly
- Maintaining client confidentiality
Anything outside of those confines is subject to disciplinary action. Additionally, acts prohibited for licensees, whether acting as a broker or salesperson, include, but are not limited to:
- Making fraudulent representations while conducting real estate business
- Failing to account for and remit any money or property that comes into the licensee's possession that belongs to others
- Misappropriating funds required to be deposited in a trust account
- Accepting, giving, or charging any rebate, "kickback," or undisclosed commission
- Failing to keep adequate records of all property transactions
- Representing a broker without their knowledge and consent
- Failing to maintain Errors and Omissions Insurance
Not only are violations while conducting real estate activities prohibited, but behaviors from a licensee's personal life can obstruct their ability to remain licensed. For instance, the commission can impose disciplinary action—such as suspending or revoking a license—when courts levy actions, even in other jurisdictions. IREC can discipline a license for:
- Felony convictions or misdemeanors involving fraud, misrepresentation, or acts of dishonesty
- Declared to have a diminished capacity or deemed "incompetent"
- Civil judgments issued against the licensee for fraud or misrepresentation
The commission requires all court actions—civil or criminal—to be reported within 20 days. Nevertheless, IREC also prohibits "gross negligence" or "reckless conduct" in a regulated real estate transaction. Idaho statutes assert that "conduct is grossly negligent or reckless if, when taken as a whole, it is conduct which substantially fails to meet the generally accepted standard of care in the practice of real estate in Idaho."
Complaints into alleged violations are sent to and handled by the commission. However, anonymous complaints are also accepted through the online form of the Division of Occupational and Professional License (DOPL).
Investigations and Audits
IREC may investigate any person engaged in the real estate business or acting in the capacity of a broker or salesperson in Idaho, including those without a license. Upon receiving a complaint, the commission's executive director performs an investigation.
The commission has the authority to impose fines not to exceed $5,000 and formal reprimands outside of hearings. If the executive director determines the violation is grounds for license suspension or revocation, the commission may have sufficient cause to proceed with a formal action, filing an administrative complaint against the licensee. Yet, complaints aren't the only source of alleged violations.
IREC conducts periodic audits of the transaction records of real estate trust accounts of all Idaho licensed designated brokers (including continuing education for brokers and salespersons). If the analysis of a broker's real estate trust account indicates a deficiency or any irregularity that cannot be resolved between the commission and the broker, the commission may order a complete audit by a certified public accountant at the broker's expense. Any potential prohibited acts uncovered are also subject to investigation and administrative complaints filed with DOPL.
Contested Case Hearings
The commission handles disciplinary matters above civil fines and reprimands through contested case hearings. The Idaho Office of Administrative Hearings (OAH) appoints a hearing officer or presiding officer to the case.
Contested case hearings do not work like criminal or civil trials in courtrooms. While the presiding officer does have the same authority as a judge, their scope includes the following:
- Scheduling prehearing conferences and hearings between the parties
- Compelling a discovery period or advance filing of expert testimony
- Accepting evidence into the record and ruling upon objections
- Issuing written decisions and recommended or preliminary orders
Before official proceedings, the licensee and a commission representative will meet in a prehearing conference. It must occur no less than seven days prior to the evidentiary hearing. The conference determines the needs of the case such as identifying or simplifying issues, establishing hearing procedures, and addressing proposed stipulations between the parties.
During proceedings, the presiding officer uses an order agreed upon during the prehearing conference but will call or examine witnesses at their discretion. The licensee (or their legal representation) and the commission representative may present evidence, call and cross-examine witnesses, and make arguments before the presiding officer.
Critically, the burden of proof is on the party requesting the hearing. Therefore, in disciplinary matters, when a licensee requests a hearing to challenge the commission's action, the licensee must prove their case to the presiding officer. In cases where the commission files an administrative complaint before presenting the licensee with proposed discipline, the burden of proof lies with them. Unless the charges involve fraud, a preponderance of evidence standard applies.
After considering all evidence and arguments, the presiding officer decides whether the licensee violated Idaho real estate statutes or regulations. The officer then recommends or directly imposes disciplinary measures through a preliminary order, which is sent back to the commission for verification.
License Suspension and Revocation
Preliminary orders become final after 14 days unless the licensee appeals the decision. Nevertheless, sanctions are effective immediately. Individuals with suspended credentials are considered the same in the eyes of the commission as unlicensed persons. Therefore, they may not engage in any real estate activities and are subject to civil fines and potential criminal charges. They may receive compensation, but only for acts performed prior to the suspension. Another broker, institution, or attorney must finalize transactions left in limbo during disciplinary proceedings.
Advertising and listings with the suspended licensee's name or credentials must be removed from public view immediately. Moreover, when the commission suspends the credentials of a broker or others with supervisory authority, all licensees associated with them or under their employ are automatically placed on inactive status within ten days unless the individual designates another broker within the statutory period.
For those conducting business on a cooperative license, suspension or revocation are grounds for disciplinary actions in the licensee's home state. Depending upon the reason for discipline, they could also have their credentials terminated.
Real Estate Discipline Appeals Process
Licensees who wish to challenge the OAH final order for suspension or revocation can appeal in two ways:
- Petition IREC for reconsideration
- Petition the district court for judicial review
Licensees may file a "Motion for Reconsideration" with the commission's executive director within 14 days of the final order. The executive director will only consider if there is emergent evidence that could change the outcome of the case or if the commission made a decision linked to bias or a conflict of interest. They will issue a ruling within 21 days, affirming or denying the appeal.
After the executive director issues a ruling or if 21 days have passed since the motion for reconsideration was filed without a ruling, licensees have 28 days to file a petition for judicial review with a district court.
Appeals are critical as real estate licensees risk losing their means of income and employment with a final order. While individuals can defend themselves before the commission or OAH alone, it's too much of a risk without professional legal representation.
Defend Your Idaho Real Estate License with the Lento Law Firm
Real estate salespersons, brokers, and others licensed by IREC deserve the best guidance and representation when they face disciplinary action. Even when the commission hands down civil fines and formal reprimands, it can negatively affect one's professional reputation. Disciplinary action is available for the public to view, and even if a licensee can continue to conduct business, it can harm their endeavors.
The Lento Law Firm Professional License Defense Team stands ready to be your inclusive defense outlet for disciplinary matters. Even first-time or minor violations warrant attention from legal professionals, as any violation could lead to a suspended or revoked license.
We leverage our extensive experience in examining and challenging violations of Idaho real estate statutes and others threatening the ability to remain licensed. Our team provides a stress-free approach to building a defense strategy for IREC investigations or OAH proceedings. Whether you are in Boise, Sun Valley, Coeur D'Alene, Idaho Falls, or elsewhere throughout the state, the Lento Law Firm Professional License Defense Team is dedicated to providing your best outcome. Call us today at 888-535-3686 or fill out our confidential consultation form, and we will contact you.
