A Continued Commitment to Supporting Licensee Compliance: DRE’s Cite and Fine Program

Published: December 11, 2025

DRE's Cite and Fine Program Since 2014, the California Department of Real Estate (DRE) has used citations as an effective tool to address relatively minor and technical violations of the Real Estate Law-particularly when little to no consumer harm occurred or where the violation posed little to no risk to the public. Now, more than a decade later, the Department's Cite and Fine Program remains strong, and its primary focus continues to be assisting licensees in understanding and complying with their legal obligations.

The goal of this program has never been to punish, but rather to help licensees take corrective action, reinforce professional standards, and avoid more serious violations. The funds collected from these citations are deposited into the Recovery Account, which compensates consumers who have suffered losses due to licensee misconduct. The program continues to support the Department's broader mission: ensuring public protection while promoting licensee education and compliance.

When Is a Citation Warranted?

Citations are most often issued for low-level violations that do not rise to the level of formal discipline such as suspension or revocation. These types of violations often signal a need for correction or increased awareness, and the citation process is intended to provide exactly that.

Some common citation-worthy violations include less-serious instances of:

Failure to adequately supervise affiliated licensees
Failure to notify DRE of an address change
Improper or missing license disclosure in first point-of-contact materials
Not reporting newly affiliated salespersons or associate brokers
Failing to properly register a fictitious business name
Delinquent filing of threshold or business activity reports
Trust fund handling or recordkeeping deficiencies

As a licensee, it's important to remember that a citation is an opportunity to identify and correct these issues early, before they cause greater consumer harm or escalate into formal disciplinary action.

What to Expect If You Receive a Citation

Each citation provides a detailed explanation of the violation(s) and outlines how you can satisfy the citation. Depending on the circumstances, the citation may include an administrative fine and/or an Order of Correction. The amount of the fine is determined based on:

The seriousness of the violation
Whether there is a history of similar violations
Whether consumer harm actually occurred and the extent of such harm
Whether the issue was corrected
Your cooperation during the audit or investigation

For licensees, fines may range from up to $2,500 per case. In addition to paying a fine, you may be required to take specific corrective actions to ensure compliance moving forward.

Substantial Penalties for Unlicensed Activity

As real estate professionals, you are held to standards that reflect your licensure and training. The Department takes unlicensed activity seriously, and citations for unlicensed individuals are assessed differently.

Unlike citations issued to licensees, unlicensed persons may be fined up to $2,500 for each unlicensed act or transaction. This is not per case but per action.

For example, if an unlicensed individual:

Advertises properties for sale
Hosts open houses
Negotiates lease terms
Collects rent
Accepts referral fees
Offers property management services

Each of these could be cited as a separate violation. Ten unlicensed acts could easily lead to $25,000 in fines. If the activity is extensive, fines could exceed $50,000.

These consequences are meant to protect the public and reinforce the value and responsibility that come with licensure.

As a licensee, if you become aware of individuals performing unlicensed activity, we encourage you to report it. It protects both consumers and the integrity of your profession.

Appeals and Review Process

If you receive a citation and disagree with it or believe there is mitigating information, you have the right to contest it. But time is critical.

You must respond to the citation by the due date indicated. Your options include:

Paying the fine and satisfying the Order of Correction
Requesting a Citation Review Conference (CRC)

The CRC is an informal opportunity to present your case and documentation to a DRE representative. Based on the discussion, the Department may uphold, modify, or dismiss the citation.

Important Reminder:

Under Business and Professions Code section 10080.9, if you fail to respond by the deadline, the citation becomes final and can no longer be appealed. Unfortunately, the Department often hears from licensees months or even years after a citation has become final, only to find there is no longer any ability to contest it. Timely action is essential. Don't miss the opportunity to resolve the issue when it arises.

If you still disagree with the citation or the assessed fine, you may then seek a hearing before an administrative law judge at the Office of Administrative Hearings. That step comes with additional risk, however: DRE may ask the judge to add the cost of the investigation and prosecution on top of the assessed fine if the citation is upheld.

What Happens If You Ignore a Citation?

Failure to satisfy a citation can lead to more serious consequences, including:

A hold on your license if you are a licensee, preventing renewal or issuance of a new license or endorsement
Referral of unpaid fines to the Franchise Tax Board or outside collections
Civil judgment or formal disciplinary action

These outcomes can affect your ability to continue practicing and may result in longer-term consequences for your license record. If you need help understanding your citation or what steps to take, please contact the Department; early communication is key.

Reinforcing Professional Compliance

The Cite and Fine Program is not about punishment-it's about partnership. The Department uses citations to help licensees take corrective action, stay informed, and ensure the Real Estate Law is followed in a way that benefits both consumers and the real estate community.

If you have questions or need assistance regarding a citation, please contact the Citation Section at Citations@dre.ca.gov. We're here to help you remain in good standing and continue building trust as a licensed real estate professional in California.