Real Estate · State License Law and Commission

Which of the following is a common ground for disciplinary action against a real estate licensee under state law?

Correct answer

Misrepresentation or fraud, commingling/conversion of trust funds, acting without proper agency disclosure, practicing with an expired license, or engaging in dishonest dealing — violations of license law and fiduciary duties

  1. A Working long hours
  2. B Misrepresentation or fraud, commingling/conversion of trust funds, acting without proper agency disclosure, practicing with an expired license, or engaging in dishonest dealing — violations of license law and fiduciary duties
  3. C Selling too many houses
  4. D Advertising a listing

Why this is the answer

Common grounds for disciplinary action: State real estate commissions can discipline licensees for violations including: MISREPRESENTATION or FRAUD (lying about material facts, deceiving clients/customers); COMMINGLING or CONVERSION of trust funds; failure to provide required AGENCY DISCLOSURE; practicing with an EXPIRED, suspended, or revoked license; DISHONEST DEALING or breach of fiduciary duty; failing to deliver documents/funds; UNLICENSED ACTIVITY (or paying unlicensed persons for licensed activities); violating fair housing laws; failure to supervise (brokers); criminal convictions (certain types); incompetence or negligence; commingling personal and client funds.

Disciplinary actions: Fines, license suspension, license revocation, required education, censure/reprimand.

Process: Complaint → investigation → hearing → decision (with due process/appeal rights); the state commission protects the public by enforcing license law; knowing the common violations and that they lead to discipline is important state exam content; misrepresentation, trust fund mishandling, agency violations, and unlicensed/dishonest dealing are among the most common and serious grounds for disciplinary action.

Source: Real Estate State — Violations, Grounds for Discipline

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About this topic: State License Law and Commission

State license law and commission questions cover who must be licensed, exemptions, license types and renewal, continuing education, the real estate commission's powers and the grounds for discipline. This is one of 34 Salesperson (State Law) questions on state license law and commission, each with a full explanation on a single study page.

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