6 Common Violations for Real Estate Brokers in California

Violations of real estate law are unfortunately very common in California, often because brokers don’t know that they’re committing a crime.

Below you’ll learn about six common enforcement violations that result in disciplinary action for real estate brokers. You’ll also find out when you should take the initiative to speak to a lawyer about your case.

Trust Fund Violations

Two types of trust fund violations are likely to result in disciplinary action: record keeping violations and shortage violations.

Shortage violations occur when brokers handle trust monies on behalf of another person and the broker or their employees convert them for their own use, or co-mingle funds with their business or operating accounts. Violations also happen when brokers who don’t have sufficient accounting knowledge improperly maintain their records. These cases will almost always result in disciplinary action and potentially in criminal prosecution.

Failure to Supervise

Failure to supervise violations occur in two scenarios. First, when it is discovered that a real estate broker has failed to properly supervise a salesperson’s activities. Second, when the broker is an officer of a corporation and fails to properly supervise the corporation’s real estate-related activities that require a license. It is perfectly legal for real estate brokers to act as designated officers of corporations they don’t own, but they must supervise the licensed activities of the organization.

Unlicensed Activity

When it is discovered that a real estate license has paid or employed an unlicensed individual or a real estate agent not officially employed by the broker to perform actions requiring a real estate license, they may be subject to disciplinary action, fines, and penalties.


Any time a real estate broker misrepresents material facts during a transaction where a real estate license is mandatory, they have committed a misrepresentation violation. This includes failing to disclose facts that the principal should know about. It also includes incorrectly portraying any material fact through a direct statement.

Criminal Conviction

A final common reason that real estate licenses are disciplined or denied is that the agent or broker is convicted of a crime that the agency believes is substantially related to real estate.  This could be drug and alcohol related crimes, in addition to crimes with elements of fraud, dishonesty, and misrepresentation.  In addition, failure to report a conviction on an application or to the agency once licensed can be grounds for denial or discipline.

If you find yourself in any of these scenarios, it’s a good idea to work with an experienced license defense attorney.

If you are in need of a lawyer to help with defending your professional license, contact California license defense attorney Scott J Harris. Click to schedule a free, 30-minute consultation or call us at 323-794-0701 or 877-865-6218.

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When dealing with these complex issues, you need legal representation that has a long track record of success in these types of cases. Scott Harris and the rest of our team at S J Harris Law will be ready to help you pursue any option available that allows you to keep your license and continue working, no matter what industry you are in.


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