The State Laws Governing the Real Estate Profession in Maryland
The real estate profession in Maryland is governed under Title 17 of the Annotated Code of Maryland. Real estate professionals are also under the regulatory control of the Maryland Real Estate Commission (MREC). The MREC is under the Department of Labor, Licensing and Regulation (DLLR). The MREC and DLLR serve both consumers and licensees conducting business in the real estate industry. The MREC has also legally adopted the Code of Ethics of the National Association of Realtors and may discipline a real estate professional for Code of Ethics violations.
A licensed real estate professional works to serve the public in all manner of real estate dealings, and a professional license is the key to being an active professional under the law. If you find your Maryland professional license under threat, then seek help from the dedicated legal professionals at the Lento Law Firm Professional License Defense Team. The Lento Law Firm Professional License Defense Team has helped professionals in all areas of Maryland, including the larger cities and towns of Baltimore, Columbia, Germantown, Silver Spring, and Bethesda. The Professional License Defense Team stands ready to answer your questions concerning license defense. Call 888-535-3686 today or schedule a consultation online.
Licensing Issues for Real Estate Professionals in Maryland
The Maryland Real Estate Commission regulates approximately 40,000 active real estate licenses in Maryland. Your professional real estate license can be threatened by any violation of professional rules, regulations, standards, or ethics established by the Maryland Real Estate Commission. The MREC has jurisdiction over real estate agents and other real estate license holders, and it has the legal authority to initiate disciplinary actions, impose fines against agents, and suspend or even revoke licenses.
The Maryland Real Estate Commission (MREC), on its homepage, states, “We are here to serve both the consumers of Maryland and the real estate licensees that we regulate. The Commission was created to protect the health, safety, and welfare of the public through examination, licensing, and regulatory activities, to uphold and apply the governing real estate laws and regulations equally to all, to provide courteous, reasonable, and professional assistance, and to impartially conduct disciplinary actions.”
Below are some of the common issues that can threaten a professional real estate license in Maryland.
- Misleading a Client - Misrepresentation or lying to a client is a serious violation of professional standards. However, allegations of misrepresentation against a real estate professional can also occur when the agent is not intentionally lying. Some common complaints can include exaggerating the positive aspects of a property and /or diminishing the negative aspects of a property or transaction. Failure to correct material misunderstandings and failure to attend to important details can also come under the category of misrepresentation or misleading a client. The line between assertive salesmanship and negligent misrepresentation can be difficult to draw. However, a suspension or revocation of your license could result, so it is essential to contact the experienced attorneys at the Lento Law Firm Professional License Defense Team so they can evaluate your case and strategize a strong defense.
- Failure to Disclose - This allegation is closely related to misrepresentation but is based on the failure to disclose material facts, either intentionally or negligently. An example could be failing to disclose known defects or environmental hazards. An allegation is only actionable if the fact is “material,” and determining if a fact is material may sometimes be difficult. It should be left to the professionals at the Lento Law Firm to evaluate your case.
- Misappropriation/Mismanagement of Funds - Unfortunately, negligent bookkeeping and money management can lead to unintended results such as the comingling of funds, which can lead to a serious allegation of misappropriation of client funds.
- Criminal Convictions - Any criminal conviction, even if completely unrelated to your professional real estate practice, can threaten your professional license. Your license can be suspended or even revoked if you have been convicted of a felony in any state. Even a criminal misdemeanor can threaten your license if it is directly related to your capability as a real estate professional.
- Deceptive Advertising/Marketing - Real estate professionals cannot use deceptive or misleading advertising or marketing materials in the promotion of a property. An example would be using photos that do not accurately represent a property's condition or features.
- False Promises - Making future guarantees or promises about the potential rental value, future value, or other speculative statements without supporting evidence is considered unethical practice and can lead to disciplinary action.
- False Documentation - If any documents such as contracts, addendums, inspection reports, or appraisals related to the sale of a property are inaccurate or untruthful, disciplinary action may result.
- Acting beyond the scope of their expertise - If an agent gives advice on legal matters, taxes, finances, or other matters beyond their expertise, and that advice harms a client, the real estate agent can face disciplinary action.
- Discriminatory Practices - Agents may be investigated by the MREC if they violate state and federal fair housing laws. Penalties can include fines, fair housing training, or suspension or revocation of their real estate license.
Disciplinary Procedures Against a Real Estate Professional in Maryland
Part of the job of the Maryland Real Estate Commission is to process and investigate any complaints against a Maryland real estate professional.
- Complaint - The disciplinary process begins with the filing of a complaint against a licensed real estate professional. A person represented by a Maryland real estate agent or broker can file a complaint in writing on the forms provided, and the allegations should center around the leasing, sale, or purchase of real property in Maryland. The individual will provide their contact information, their reasons for the complaint, and any supporting documentation. Once the complaint is filed, the MREC will determine if it has the legal authority to handle the matter. If so, the real estate professional involved will be given a copy of the complaint and a chance to reply to the allegations in the complaint. After any responses are made, the MREC will review the filed materials and determine if further investigation is merited. A complaint may also be filed against a real estate professional by the MREC on its own motion.
- Investigation of a Complaint - The investigator assigned to the case will investigate all the evidence and may interview all parties to the complaint. Once the investigation review is complete, the MREC will determine if the investigation shows a probability that the acts of the licensee justify disciplinary action.
- Dismissal of a Complaint - If the MREC concludes that no violations have occurred, they will close the complaint, dismiss the complaint, and notify all parties.
- Referral to the Maryland Attorney General's Office - If the investigation reveals that violations did occur, then the matter will be referred to the Office of Administrative Hearings, but only after the Maryland Attorney General's Office has reviewed the charges for legal sufficiency.
- Referral to the Office of Administrative Hearings - Once a determination of the legal basis for taking disciplinary action has been made, then the case is sent to the Office of Administrative Hearings, and a hearing date is scheduled.
- Pre-Hearing Conference - The case can be referred for a pre-hearing conference with both parties present. At the conference, both parties have an opportunity to reach a settlement agreement.
- Administrative Hearing - The hearing is usually before an administrative law judge and will include an assistant attorney general for the state of Maryland presenting the MREC's position. The licensee then has an opportunity to present a defense and be represented by an attorney. Both sides will submit evidence and call any witnesses who will be testifying at the hearing. In rare circumstances, the MREC may decide to revoke or suspend a professional license prior to the hearing. In that case, the licensee still has the right to a full hearing to challenge that decision.
- Recommendations by the Administrative Law Judge - After the hearing, the judge will make a recommendation as to the disciplinary sanctions, if any, to impose. The MREC then has the option to modify any of these recommended sanctions. The MREC must find that the evidence presented at the hearing was substantial enough to establish that it is more likely than not that the misconduct occurred.
- Exception to Findings- If the licensee disagrees with the proposed sanctions, they can file exceptions contesting the proposed findings of fact and proposed sanctions. The filing of exceptions may result in another hearing and a chance to submit new evidence subject to MREC's discretion.
- Ruling on Sanctions/ Appeal - If any hearing results in penalties against the real estate professional, they may appeal the MREC's decision to the appropriate Maryland Circuit Court. This request for appeal ( called a request for judicial review) must be filed within 30 days of the mailing and final order from the MREC.
- Timeline for Actions - The established timeline for bringing a disciplinary action by the MREC is within three years of discovering the alleged misconduct by a real estate professional
Types of Disciplinary Sanctions Imposed by MREC
In general, the MREC will consider several factors in applying sanctions, such as the severity of the violation, the history of misconduct, mitigating circumstances such as cooperation with the investigation, and harm to the public. Each case is evaluated on its merits based on the evidence presented at a hearing. It is important to remember, however, that these are administrative hearings. Although the stated purpose of the MREC is to protect both licensees and the public, a regulatory agency is created for the regulatory protection of the public, and it is empowered to discipline its licensees. It will be essential, therefore, for a real estate professional threatened with sanctions to secure help from the experienced professional attorneys at the Lento Law Firm Professional License Defense Team in order to vigorously protect their legal rights. Here are some of the potential penalties that may be imposed for violation of Maryland real estate laws.
- Civil Fines - Fines against a real estate agent can be as little as $1,000 or in excess of $10,000.
- Severe Fines and License Suspense or Revocation - Fines may also be imposed along with suspension or even revocation of a professional license in severe circumstances. An example of a severe sanction would be when a real estate agent collects money for rent on a property but does not disburse the funds to a client. This constitutes theft of money that belongs to a client. A revocation means that the agent would no longer be able to practice real estate in Maryland.
- License Reprimand - For minor infractions, the MREC may issue a license reprimand and /or require education classes in areas like ethics. A reprimand is still a formal warning that goes on an agent's record and may affect their ability to renew their license in the future.
- Mandatory Education or Training - Sometimes, an agent may be required to complete additional education or training in areas such as advertising regulations as part of their penalty.
Circumstances Leading to Revocation or Suspension of a License
Some, but not all, of the grounds for suspension or revocation of a license in Maryland are as follows:
- Violations of the Maryland Insurance Code or regulations of the Maryland Insurance Administration;
- False, misleading, or incomplete Information on an application for licensure
- Fraudulent or dishonest business practices
- Unfair trade practices
- Failure to comply with record-keeping and reporting requirements
- Conviction of a felony or crime of moral turpitude
- Misappropriation of funds or premiums held in trust for clients
Get the Help You Need from the Lento Law Firm's Professional License Defense Team
It is essential to get legal help when your professional license is on the line. The possibility of losing your professional license is a real threat. You need to act as soon as you have been notified of a complaint allegation against you. Experienced legal representation is essential in administrative law hearings, and the Lento Law Firm Professional License Defense Team can help you mitigate the risks to your career and reputation and vigorously prepare defense strategies on your behalf.
Remember that you are not alone in this difficult situation, and our dedicated attorneys will represent you at every step of the proceedings. We will also engage in any negotiations and settlement conferences on your behalf. The Lento Law Firm Professional License Defense Team is committed to helping real estate professionals in Maryland navigate the complaints against them and vigorously defend their professional licenses. Call 888-535-3686 today for help, or schedule a consultation online.
