Disciplinary action against a broker starts with an investigation. The DRE may investigate, upon its own initiative, or when someone may file a complaint. When a verified complaint is filed against a licensed broker, the DRE is legally required to investigate. The DRE has great discretion, however, after investigating a complaint, whether or not to go forward with a discipline.

If the DRE goes forward with discipline, its first step is to file an accusation against the broker. The accusation sets forth the charges. The broker must also be served with a Notice of Defense, a form that he or she can sign and return to the DRE, to request a hearing. Failure to sign and return this form may waive the broker’s right to have a hearing held on the charges.

Discipline may not be imposed upon a broker, unless the opportunity for a hearing is provided to him or her under the California Administrative Procedures Act. Government Code Section 11500. The broker must be given at least ten days advance notice of the hearing. Prior to the hearing, the broker is entitled to see copies of all evidence against him or her, including the complaint and any statements by witnesses. At the hearing, the broker is entitled to be represented by a lawyer, and the broker or his or her attorney is entitled to present oral and written evidence on his or her behalf.

After the hearing, the hearing officer submits a recommendation to the Commissioner of Real Estate, who can adopt the recommendation and the suggested penalty, adopt the recommendation and reduce the penalty or reject the recommendation. The Commissioner may order a reconsideration of any part of the case, on his or her own motion, or upon motion of party. Ordinarily, the power to reconsider a ruling expires thirty (30) days after the mailing of the ruling, although the Commissioner may extend that deadline.