Program Areas

Department Objectives

The primary objective of the Department of Real Estate (DRE) is the protection of the public interests in regard to the offering of subdivided lands, and the handling of real estate transactions by licensees. To accomplish this, a standard of knowledge, measured by written examination, is established for licensing real estate agents and a minimum criterion of affirmative disclosure is set for qualifying subdivided lands offerings.

At the same time the Department is protecting the public interests and increasing consumer awareness, it collaterally assists the real estate industry in expanding its standards and level of professional ethics and responsibility.

Licensing

If a person wishes to engage in the real estate business and to act in the capacity of, advertise, or assume to act as a real estate broker or real estate salesperson within the State of California, a real estate license must first be obtained from the DRE.

Before an applicant for a real estate salesperson license may obtain a license, he or she must apply for and pass a real estate examination and fulfill certain real estate education requirements. In most cases, a broker applicant, in addition to required real estate education, must also have two years of real estate experience before applying for the exam. Broker and salesperson licenses are issued for a four-year period. In general, both types of licenses may be renewed by submitting the appropriate fee and application, and evidence of completion of 45 hours of DRE approved continuing education courses (to include required courses in ethics, agency relationships, trust fund handling, and fair housing).

See statistics on licensee population for more information.

Enforcement and Audit Sections

Investigations are made by the Department's Enforcement and Audit Sections on the basis of written complaints received from the public alleging possible violations of the Real Estate Law or the Subdivided Lands Law by licensees or subdividers. If an inquiry into the matter substantiates that there has been a violation, the Department may take formal disciplinary action. This action, depending on the nature of the complaint, may result in the suspension or revocation of a license, issuance of a restricted license, or filing of an order to Desist and Refrain. Some violations may result in civil injunctions, criminal prosecutions, or substantial fines.

Recovery

The Consumer Recovery Account is a separate account of the Real Estate Fund. Currently, 12% of all license fees collected is credited to this account. When a member of the public obtains a qualifying judgment against a real estate licensee as a result of fraud, misrepresentation, deceit or conversion of trust funds on the part of a licensee acting as an agent in the transaction, under specific conditions of law, that person may seek reimbursement from the Consumer Recovery Account for actual and direct loss to a statutory maximum.

Subdivisions

The purchase of real estate is the largest single investment most Californians make during their lifetimes. Subdivision laws enforced by the Department help ensure that subdividers deliver to buyers what was agreed to at the time of sale. These laws cover most standard subdivisions and various types of common interest developments (of 5 or more lots or units), time-shares, certain undivided interest developments, and out-of-state time-share subdivisions offered for sale in California. Before real property which has been subdivided can be marketed in California, the subdivider must obtain a public report from the Department. The public report discloses to prospective buyers pertinent information about a particular subdivision. Prior to the issuance of a public report, the subdivider must file an application along with supporting documents with respect to representations made in the application. If improvements to the subdivision are not complete at the time of filing the application, the subdivider must also submit evidence to the Department that adequate financial arrangements have been made for their completion.

Mortgage Loan Activities

In the area of mortgage loans, the Department monitors certain activities of real estate licensees doing business as mortgage lenders and mortgage brokers. With respect to those mortgage loan brokers whose business activity meets the statutory threshold criteria, reports are submitted to the Department to assist DRE in surveying broker compliance with the law.

Publications

The Department offers many publications on topics of current interest to the consumer and licensees, such as the Real Estate Reference Book, which provides general information on many aspects of real estate practice; and the Real Estate Law book and CD, which contains the current Real Estate Law, the Commissioner's Regulations , and pertinent excerpts from other California codes.

The Real Estate Bulletin, published quarterly, is furnished to all licensees. This highly informative newsletter keeps readers current on recent changes in the Real Estate Law, DRE policies, as well as timely industry concerns.