Bureau of Real Estate #3: Investigation and Hearing

By BPE Law Group Senior Attorneys,
Alexander W. Munn and Robert J Enos

A BRE Investigator called. What do I do? Prior to the filing of a formal Accusation, a BRE Investigator will likely contact an agent or broker to conduct an interview to gather facts in support of, or in mitigation of, possible violations of the Business and Professions Code or Real Estate Laws. Should you receive such a call, do not panic! Simply ask the purpose of the call, obtain as much information as possible about what transaction(s), conduct or actions are in question, and state that you will review the file arrange a time in the near future to discuss with the investigator.

Should I talk to the investigator on my own? We advise agents not to talk to the investigator about specifics during the initial call. Why? By the time the investigator makes contact with you, the BRE has already received a complaint, it has likely reviewed the transaction file, and is seeking additional evidence to bolster their case. You, on the other hand, are caught off guard by the call, the facts are not fresh in your mind, and you haven’t reviewed the transaction file for months.

Do I need a lawyer? Any BRE investigation is serious business, which can impact your livelihood. We advise retaining counsel before an interview takes place. The attorneys at BPE will review the transaction file, any notes, emails, addendums or affidavits in question, and compare this evidence with the allegations against you to best prepare your defense. Only after this thorough review process should an interview be scheduled with the BRE.

What can expect at the BRE Hearing? The hearing is held in front of an Administrative Law Judge (ALJ). There is no jury. The BRE is represented by one of its staff attorneys. The allegations against an agent are set forth in a document called an Accusation. It’s like a lawsuit, which outlines the facts and law that the BRE is accusing the agent of violating. The Accusation can be challenged prior to the hearing. Also, the agent may request ‘discovery’ from the BRE – the names of witnesses, statements taken during the investigation, and investigative reports prepared for the BRE. At the hearing itself, the ALJ receives evidence in the form of documents, affidavits from people involved in the transaction, and hears testimony from witnesses. The normally strict Rules of Evidence are relaxed during the hearing. Depending on the nature and number of violations, the hearing can last a few hours or several days.

What about settlement? This is always a possibility should the accusations warrant. Settlement can be discussed at the prehearing conference, the parties can stipulate to attend alternative dispute resolution hearing, or settlement can be explored at a prehearing settlement conference. Settlement can include stipulations to payment of a fine, lesser conduct violations, or an agreement for the agent to perform acts indicating rehabilitation.

This Article is only a summary of an enforcement action. The formal rules of procedure are found in Government Code section 11500 et seq. Should you contacted by an Investigator, served with Accusations, or Notice of Hearing, contact Alexander Munn at awmunn@bpelaw.com, or Robert Enos at rjenos@bpelaw.com. If you need more immediate assistance, please call our office at (916) 966-2260 to schedule a flat fee Consultation appointment

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.