BUREAU OF REAL ESTATE WON'T PURSUE ETHICS VIOLATIONS

Just last week the California Bureau of Real Estate (CalBRE) sent out a news flash entitled, "CalBRE Releases Guidance on Professional Responsibility for Real Estate Licensees". It noted two new web postings by the Bureau: (1)Professional Responsibility: An Overview and (2) Professional Responsibility Course Booklet. The purpose of these postings is "to clarify a licensee's responsibility under the Real Estate Law."

The first document was written by the current Real Estate Commissioner, Wayne S. Bell. Much of it consists of an almost verbatim reproduction of an article that appeared in the winter, 2012, edition of the Real Estate Bulletin (a publication of the Bureau's). This is acknowledged by the author. It certainly couldn't be considered plagiarism. That is because the same Wayne Bell, then the chief counsel, is also the author of the 2012 article.

The title of the 2012 article was, "Violations of Real Estate 'Ethics' Rules Alone Do Not Form the Basis for Discipline Against Licensees: There Must Be Identifiable 'Unlawful' Conduct". Now, that is certainly more of a mouthful than "Professional Responsibility: An Overview", but, frankly, it is considerably more revealing as to the content and emphasis of both articles. The main point of both is summarized in this:

"While a violation of a rule of ethics may be appalling and inexcusable, and wholly unacceptable business conduct, the Bureau can only take disciplinary action and impose penalties against licenses based on violations of the California Real Estate Law, including the Regulations of the Real Estate Commissioner."

Both articles note that "some confusion on this law vs. ethics issue may have arisen due to prior Commissioner Regulations." They go on to say,
"Prior to its repeal after 1996, Commissioner's Regulation 2785 did have lengthy guidelines pertaining to a 'Code of Ethics and Professional Conduct', and that title might have caused readers who did not closely read all of the regulation to incorrectly conclude, believe or assume that the Ethics Code applicable to Realtors was made a part of the Real Estate Law."

The author points out that the suggestions for ethical conduct were not intended to be "statements of duties imposed by law nor as grounds for disciplinary actions..."
Both publications include a rather lengthy list of those laws and regulations that are most frequently violated and that result in the imposition of discipline by the Bureau.

"Why," one might wonder, "has the Bureau seen fit to address this issue twice in a period of less than a year and a half?"

In both articles it is noted that "On many occasions CalBRE receives calls, inquiries or complaints from individuals who want to report 'unethical' behavior or ethics violations by real estate licensees in order to start the disciplinary process." One suspects it might be accurate to say that the Bureau is overwhelmed with such calls and complaints. It has got to be costly, time-consuming (and likely frustrating) to have to respond to such complaints only to tell the aggrieved party that "we really can't do anything about it" if the behavior - albeit unethical - is not in fact unlawful. (Of course there will be some cases where it is both unethical and unlawful.)

Ironically, the problem faced by the Bureau - who is charged with enforcing the law - is not dissimilar to the problem faced by Realtor Associations - who are charged with enforcing the Realtor Code of Ethics. That is, many, many complaints received by local Realtor Associations involve behavior that - though it may be rude, offensive, boorish and appalling - does not constitute a violation of the Realtor Code of Ethics. Like many professional codes, the Realtor code deals with a variety of actions and behaviors that are specifically related to the real estate business. The Realtor Code is not a general-purpose manual of do's and don'ts. It isn't akin to the Boy Scout Oath. It doesn't entail or substitute for the Ten Commandments. It prohibits making false statements about a property you are trying to sell, but it doesn't apply against false statements made to impress someone at a singles' bar.

So there you have it: A violation of the law - go to the BRE. A violation of the Code of Ethics - go to the Realtor Association (if the perpetrator is a member). But, generally bad behavior? I don't know. Seek out their parents, tell your neighbors, write something on Yelp. Whatever helps.
Bob Hunt is a director of the California Association of Realtors. He is the author of Real Estate the Ethical Way.