Real estate professionals conducting business in Kansas invest significant time and effort to obtain and maintain their credentials. As an essential part of their livelihoods, it's vital to acknowledge that the governing board can initiate investigations and impose discipline. While a majority of prohibited acts involve financial disclosures, authorized transactions, and legal agreements, licensees can have their judgment called into question through anonymous complaints.
Real estate licensees who violate state regulations or professional standards face the daunting possibility of fines, suspension, or even revocation. Navigating the investigation and hearing processes requires a clear understanding of administrative procedures and a tailored strategic defense to avoid damage to professional and personal reputations.
The Lento Law Firm Professional License Defense Team is prepared to be your partner in protecting your ability to conduct real estate business in Kansas. 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.
Kansas Real Estate Commission
The Kansas Real Estate Commission (KREC) authorizes individuals to conduct activities such as buying, selling, renting, or managing properties. KREC uses the Kansas Real Estate Brokers' and Salespersons' License Act as its governing document, which provides the state's licensure guidelines. Those required to maintain valid credentials include anyone directly or indirectly engaged in, conducting, or representing the business of a broker or salesperson. Other activities regulated by KREC include those who:
- Sell, exchange, purchase, or lease real estate or offer to
- Negotiate, list, or auction offers, sales, or exchanges
- Buy, sell, or offer deals in options on real estate
- Assist or procure prospects calculated to result in a sale, exchange, or lease
- Engage in the business of charging an advance listing fee
Nevertheless, there are exceptions to licensing mandates. Individuals selling their own property or acting as power of attorney for another are exempt from KERC oversight. Otherwise, most acts not tied to compensation of real property or services remain free from licensing requirements.
Differences Between 'Salespersons' and 'Brokers'
One of the most significant licensing specifications is the difference between a "salesperson" and a "broker." In Kansas, 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 company and oversee other licensees. They can also work independently and take legal responsibility for transactions conducted under their brokerage. Brokers meet additional education and experience requirements. Apart from a 60-hour education course—similar to that required of a salesperson—brokers must meet other minimum requirements established by KREC, such as being actively engaged for at least two years out of the last three years in activities requiring a license.
Once licensed, salespersons and brokers must maintain compliance with Kansas real estate statutes and regulations. While fiduciary duties are key, the commission requires licensees to act ethically in their personal and professional lives.
KREC Prohibited Acts
Professional responsibility standards for Kansas real estate licensees are critical to maintaining public trust and ensuring ethical conduct across the industry. KREC addresses matters such as advertising regulations, conflicts of interest, truthfulness in dealings, and personal conduct.
Among those prohibited for licensees, whether acting as an agent, transaction broker, or a principal, include, but are not limited to:
- Failure to account for and remit any money that comes into the licensee's possession and which belongs to others.
- Misappropriation of funds is required to be deposited in a trust account.
- Accepting, giving, or charging any rebate or undisclosed commission to someone unlicensed.
- Paying a referral fee to a licensee if they know the payment results in a rebate.
- Representing a broker without their knowledge and consent.
- Guarantee future profits that may result from the resale of real property.
- Offering for sale or lease or placing a sign on any property offering it for sale or lease without the owner's or authorized agent's written consent.
- Procuring real estate through unwritten contracts or without authorized signatures.
- Misrepresentation of true and actual sale prices or interest involved to parties involved.
- Entering into contracts with real estate professionals not licensed by the commission.
Real estate brokers have further responsibilities with their added experience and licensing. Since they employ or oversee others engaging in real estate activities, the commission prohibits them from:
- Paying commission or compensation to anyone performing the services of an associate broker or salesperson unless licensed and employed by or associated with the broker.
- Failure to properly supervise salespersons or associate brokers.
- Lending a broker's license to a salesperson or permitting a salesperson to operate as a broker.
- Failing to provide principals with a written report itemizing disbursements from advance listing fees every 30 days.
Despite the finance-heavy prohibitions for brokers, associates, salespersons, and principals, there are acts outside real estate investment and transactions the commission regulates. For instance, licensees of any kind may not threaten or engage in physical abuse or harassment or threaten to file property liens.
Realtors of any caliber must also conduct real estate business with a sound mind. KERC can intervene in cases where an individual's judgment or objectivity is allegedly impaired because of addiction to alcohol or controlled substances, and even in cases of diagnosed mental illnesses. Moreover, the commission requires a timely response from licensees in all matters, including complaints. Therefore, failure to communicate will result in disciplinary action.
Investigations and Compliance Reviews
When KREC is aware of any alleged prohibited conduct, it will launch an investigation. However, it's more common for the disciplinary process to begin with a complaint.
The commission accepts complaints through its online portal or in written form. While KREC will investigate anonymous complaints, it will only proceed if there is evidence of harm or threat of harm to the public. Generally, formal disciplinary action must be filed by the commission no more than three years from the date of violation.
When the commission receives a complaint, an acknowledgment letter is issued confirming receipt and requesting additional information if necessary. In some cases—especially when the licensee in question is a broker—KREC may initiate a compliance review. Inquiries involve commission staff examining the following:
- Real estate brokerage transactions
- Trust accounts
- Real estate contracts
Auditors may review contracts and other documents related to the previous three years of activities to monitor compliance with state regulations. While most are completed virtually, the commission maintains the authority to carry out an in-person review. Following an investigation or compliance review, KREC may send the licensee a warning letter or a commission directive.
Warning letters serve as official notices for first-time or minor violations. Commission directives alert licensees of more serious violations and typically contain instructions for a response and a corrective action plan.
Formal Hearings and Summary Proceedings
When licensees receive commission directives restricting their license or other sanctions, they may request a hearing to defend themselves. Real estate brokers, salespersons, and others receive a notice acknowledging the request and a prehearing questionnaire. Feedback allows those accused of violations to provide additional information to the commission, including the reason for the request and evidence to support the dispute.
A separate Notice of Hearing provides the date and time of the hearing, which are held at the KREC office unless otherwise noted. The commission mails the outcome within 90 days.
When violations do not require public comment, KREC can use summary proceedings to adjudicate prohibited conduct. Typically, the commission levies summary proceeding orders in the following situations:
- When a licensee repeatedly violates the same regulation or when the act is deemed egregious.
- When the commission identifies a violation during the review of an original or renewal license application.
- When the commission believes license restrictions or sanctions are appropriate.
KREC can also issue orders for licensees who lack "sufficient transactional experience" or fail to demonstrate "honesty, trustworthiness, integrity, and competence." Orders include details about the violation, the disciplinary action imposed, and the reasons for license restrictions or conditional activity. Licensees may also pursue proceedings through a "Right to Request Relief," sought before the order becomes effective.
The Office of Administrative Hearings (OAH) conducts summary proceedings with the same rules as those before the commission. An Administrative Law Judge (ALJ) will hear and decide the case, conducting it in a manner similar to a trial court but with fewer formalities. During proceedings, both the commission (typically represented by a state attorney) and the real estate licensee (or their legal representative) may present evidence, call and cross-examine witnesses, and make arguments before the ALJ.
After considering all evidence and arguments, the ALJ decides whether the real estate licensee violated Kansas statutes or regulations. While the state has the burden of proof, it only needs to show through a preponderance of evidence that the individual committed the alleged violations. The ALJ then recommends or directly imposes disciplinary measures, which are sent back to the commission for verification.
Sanctions for Kansas Real Estate Licensees
Sanctions are effective immediately—even if individuals wish to challenge the commission's decision. Fines are common sanctions levied, but often, KREC proceeds by limiting the freedom licensees have in the real estate business or curtailing their responsibility over others.
For salespersons, restrictions and conditions may include:
- Employment as an independent contractor with a specific supervising broker
- Limited to particular types of transactions for a specified period of time
- Mandatory reports or periodic and final reports regarding the status of various real estate matters
- Required counseling or psychiatric evaluations
- Completion of education obligations
- Filing a surety bond for the protection of business interests
Brokers are subject to similar conditions, such as mandatory evaluations or continuing education. However, the commission may also restrict their ability to supervise licensees. Nevertheless, there are collateral consequences for brokers with suspended or revoked licenses. When the commission levies such discipline on a broker, the credentials of all licensees associated with them or under their employ are automatically placed on inactive status within five calendar days; however, associate brokers and salespersons may transfer to another supervisor.
Even in cases where minor discipline may not change an individual's license's active status, written warnings are part of a permanent disciplinary record. License discipline can limit a business's prospects and earning potential—let alone harm one's reputation—so it's imperative to exercise all avenues of redress. Fortunately, licensees can appeal the state's findings and imposed discipline.
Kansas Appeals Process
Licensees may file appeals to the commission's decisions with the Kansas Court of Appeals within 30 days. Critically, appeals are neither a re-hearing of the entire case nor an arena for convening parties. Instead, the appellate court reviews the written record to determine whether any significant legal errors occurred during the proceedings.
The court requires the licensee to submit a brief that includes the facts of the commission's allegations and charges against them. The court studies the briefs, examines the hearing record, and may hear a 15-minute oral argument from the licensee's legal representative. The court will affirm, modify, or reverse the commission's original decision in a majority vote from the three-member bench.
Defend Your Kansas Real Estate License with the Lento Law Firm
Real estate salespersons, brokers, and others licensed by KREC deserve the best outcome when managing alleged violations. While sanctions are case-dependent, even a written warning can be grounds for trouble later in one's career. Any discipline must be taken seriously as there is no way to forecast the effects on the ability to conduct real estate business in Kansas.
The Lento Law Firm Professional License Defense Team is prepared to ensure that Kansas licensees have what they need to defend against violations in KREC and OAH proceedings. From Wichita and Lawrence to Topeka and Overland Park, our team has helped real estate professionals throughout the state. Call the Lento Law Firm at 888-535-3686 today or fill out our confidential consultation form, and we will contact you.
