A person applying for a California real estate license must present satisfactory evidence of his or her truth and honesty. A broker’s license may not be denied, because of lack of good moral character or other general issues relating to character, reputation of personality. The Commissioner may, however, refuse to issue a broker’s license to someone who has been convicted of a felony, or a crime involving moral turpitude, if the crime is substantially related to the qualifications, functions and duties that will be performed by the person as a broker or a salesperson. Business. & Professions. Code, Section 480, subd. (a)(3). A crime should be found disqualifying if it involved intent to defraud or the willful failure to perform services after payment.

There have been a number of decisions by the upper California courts determining whether a particular crime disqualifies someone to hold a broker’s license. These cases are somewhat unpredictable; they appear to turn a great deal of the particular facts of the case, and the emotional appeal that these facts made to those particular judges. For example, one decision found that a criminal conviction for possession of marijuana was enough to bar someone from being a broker. Golde v. Fox (1979) 98 Cal.App.3d 167, 175-187; 159 Cal. Rptr. 864. Another court found a similar drug offense to not be disqualifying, but it emphasized a number of factors, which made the person’s moral guilt less. Brandt v. Fox (1979) 90 Cal.App.3d 737, 749;153 Cal. Rptr. 683

The courts have been fairly consistent about disqualifying applicants who committed crimes involving commercial or business fraud. For example, in Harrington v. Department of Real Estate (1989) 214 Cal.App.3d 394, 400-402 ,263 Cal. Rptr. 528, an individual had been convicted of acting as a general contractor without a license and knowingly passing a worthless check. This was found disqualifying. In a similar way, Berg v. Davsi, (2005) 130 Cal. App. 4th 223, 29 Cal. Rptr. 3d 803, held that a former attorney, who had been disbarred for fraudulent billing of clients, could not be issued a broker’s license. But in Pieri v. Fox (1979) 96 Cal.App.3d 802, 804-807, 158 Cal. Rptr. 256, the Court of Appeal found that a conviction for making false written statements in order to obtain unemployment benefits did not prevent someone from obtaining a broker’s license, given the facts in his favor. )

The Department of Real Estate may refuse to issue or renew a license to any person who has failed to pay child or family support for more than thirty days. A list of such people are compiled by the State Department of Social Services and certified by the District Attorney. California Welfare & Institutions Code Section 11350.6.

If a person applying for a real estate license has one of these issues, the Commissioner of Real Estates may, if he or she wishes, issue that person a restricted license. A restricted license may be issued for a limited time, may require the person to work for a particular real estate broker or may impose other conditions upon the license holder. California Business and Professions Code, Sections 10156.5 to 10156.8.