Receiving a call from an investigator of your state real estate commission is like getting a letter from the IRS. You want o pretend it didn't happen, perhaps ignore it, perhaps
even conveniently "forget" to return the call. It's understandable,
these regulators potentially hold your license, your livelihood,
and your career in their hands.
Your first impulse — ignore — maybe even run and hide — are
the absolute worst thing you can do. You must face the issue.
Failing to cooperate and failing to respond to a request for
information and documents will surely enlarge even the smallest
issue into a potentially major problem and liability.
Article written by JAMES A.
HOCHMAN, a partner of Arnstein
& Lehr LLP law firm, James Hochman,
Esq. He practices law for a wide range
of clients in real estate and real estate
related litigation. Hochman writes
freelance articles offering some of his
best advice based on his 37 years of
experience. Jim can be reached at
WHEN THE STATE
In Illinois, just to use one example, a licensee must respond,
and is required to produce documents within 30 days or even
sooner, within 24 hours if the request includes your trust
account records and bank statements. In one case, a client of
mine, in a misunderstanding, thinking she had satisfied the
investigator, almost saw her license suspended for six months
(with a healthy fine). It turned out that a former employee
had accused her of escrow improprieties — false accusations
which (with counsel) could be resolved and the complaint
Another one of my clients faced the Commission in a settlement
conference. He admitted: "I have never had a complaint and
I have been in the profession for 30 years. If it sounds like
I am scared to death (his voice waivered), it's because I am.
You hold my career in your hands. When he explained his side
of the story, the Commission closed its file without discipline,
without even a warning.
Just as you have your accountant respond to the IRS, your
counsel can and should speak for you if the real estate
commission inquires. There are likely experienced attorneys
in your state who regularly appear in inquiries and license
complaint hearings. Between your SIOR network and state
association's counsel, you can find the right attorney.
But — please remember — when that first response, "ignore,
run and hide" hits you, calm down and face the problem.
Most real estate commission prosecutors respond well to
cooperation, in a fact finding and in a settlement oriented
process. You might be just fine, many complaints arise from
malice, or misunderstanding. With confidence, with calm,
and yes, good legal representation, you can face and perhaps
resolve the inquiry early with no blood.
Your records, your professionalism, and your trusted advisors
will usually see you through to a good result.