What happens if a desist and refrain is ignored?

Question

My property manager is practicing real estate without a license in California.  I checked her name against the CalBre database.  If I file a complaint with the BRE, and they issue a desist and refrain letter, what happens if the "property manager" ignores it and continues to practice property management anyway?

Bill B. · Answer

And you’re still using them why? I assume they are awesome or your woulda switched long ago?

I also assume you called your PM and asked them for their brokers license #?

If it doesn’t make you money and doesn’t make you happy, just stop doing it.

Account Closed · Answer

The offending individual gets a chance to respond to the notice. If warranted, a meeting is set up with the individual to discuss the details of what they are doing. Normally the assumption is that the individual has followed the cease and desist letter with little follow up from the state. If after a few months a second complaint is received by the state, the state may require a meeting in person to determine the facts. A warning is issued if warranted. If further disregard is shown for following the law a suit can be brought against the individual. That usually runs about a year and a half with delays if the individual has a good attorney. Eventually they get their wrist slapped and a fine. The amount of money involved is so little that it needs to be flagrant and egregious for AG or anyone else to take action.

If you are ticked off at your property manager, change property managers. Life's too short to wind up as a witness in a trial that runs a year and a half.

Mike Cumbie · Answer

I am not sure what the end game is here. Are you a licensed agent or broker. If you are an agent who is your broker?

Is the whole issue that your supervisor is making calls to extend leases etc? If so contact yout broker and fix it. If you are the broker fix it. As far as inviting the state into a place where I plan to continue working....... Not me. You sound more like an employee than an independant contractor so understanding the structure may help.

Bill B. · Answer

@brandon Snyder

Sorry, I did misunderstand. Maybe you can get the company shut down. I don’t know how much money is involved but as a “not a lawyer” I would assume all management fees should be refunded to the clients if they were lied to (defrauded). Most 5 person companies would probably fold if they had to hand back months of their income. Problem solved. You could email these clients and suggest they ask for a refund of all charges. I’m sure they have lawyers that would tell them for a few bucks if they’d win.

Brandon Snyder · Answer

I'm afraid you misunderstand.  This property manager is my boss.

The owners of the buildings decided to manage the buildings on their own, but they hired unlicensed individuals (except for me) to manage their residential apartment buildings.  It's only a 5-person team, not including the owners.

My supervisor is unlicensed and is overstepping her bounds, and she should not be doing that.

Brandon Snyder · Answer

Okay, I've copied text from a landlord law book, and I have annotated each of my property manager's infractions against the rules set out below.  Would CalBre have a case to investigate?

***

Licensing requirements:

Owners of real property can perform all leasing activities for their property without needing real estate broker’s license.  Similarly, if you hire a manager who lives on the property, that person need not be licensed (1).  (B&P SS 10131, 10131.01.)  However, your tenant manager can manage only the property the manager lives on (2).  If you want this person’s services at your complex across town, the manager will need to take and pass the licensing exam administered by the California Department of Real Estate (or be supervised by a broker explained below).

The rules are somewhat tricky for managers who do not live on the property.  For example, suppose you want to pay a resident manager to also manage your second property, or you want to hire your retired brother-in-law, who lives in his own home, to manage your apartment complex.  Unless each obtains a real estate license, they cannot take the job unless they will be supervised by a licensed broker or real estate sales person.  Even then, they will be able to assume only the following duties, and only at a single location (3):

*Accept signed leases and rental agreements.

*Provide information about rental rates and other terms and conditions of the rental, as set out in a schedule provided by the owner, and

*Accept deposits, fees for credit checks, and other administrative duties, security deposits, and rent

*Provide preprinted rental applications and respond to applicants’ inquiries about the application

*Show rental units to prospective tenants

As you can see, a non-licensed, non-resident manager is limited to performing rather routine tasks that don’t call for initiative or decision making.For instance, this manager would not be qualified to negotiate a lease (4), deal with late rents or other violations of the rental agreement or lease (5), or appear in court on your behalf (6).

(1) My property manager does NOT live on any of the owners properties.

(2) My property manager is unlicensed.

(3) My property manager supervises 10 different properties.

(4) My property manager has negotiated leases for 12 years without a license.

(5) My property manager has dealt with late rents and violations.

(6) Unknown

Max Gradowitz · Answer

If you are bored and want some good reading, read some of the recent desist and refrain orders and bar orders published on the CBRE website.  Good gossipy reading (hopefully you don't recognize some of those names!) and you can learn a lot about the process and penalties involved in complaints like these.

Max Gradowitz · Answer

Did you check every single name within her company?  Did you ask if she works under a broker?  I'm not trying to discourage you from filing a legitimate complaint, but I've had people confidently tell me that their property manager doesn't have a license, only to do more research and find out that they WORK UNDER a licensed broker.  Just make sure this is not the case before you pursue a lot of time and energy in to filing a complaint.  Oftentimes the property management company can provide some broker's name that the company works under.  It's like having a real estate agent: they do all the work, you contact them for everything, but they all work under a broker that you virtually never hear about or hear from unless things go bad with your agent.

With that said, if there is no licensed broker connected to the company, then you can file a complaint and the CBRE/DRE can send a desist and refrain order.  That order is published publicly.  If they do not abide by this order, they are subject to to a large fine and even jail time, and this is made clear in the order.

What happens if a desist and refrain is ignored?

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