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How Bad Can a California Real Estate Broker Be? License Suspension for Building Code Violations, after amendment of B&P 10177 to eliminate the need for showing Moral Turpitude.

Robbins was licensed both as a real estate broker and as an attorney. On January 23, 2001, he pled nolo contendere (no contest) and was convicted of three misdemeanor building code violations.

The DRE filed an action to revoke his license, based on this conviction plus a history of conviction for 50 prior violations. He also had been disciplined by the state bar. The broker argued that there was not showing of intent, and that the crimes did not involve moral turpitude.

Unfortunately for the broker, In 2008 the Legislature amended the statute to allow for revocation of a license without the need to prove moral turpitude. The court here pointed out that the law does not require a failure of honesty or truthfulness for the crime to be related to the broker’s fitness as a licensee. It also noted that the legislature found that a no-contest conviction is strong enough indicator of guilt to warrant discipline. His intent? It was to make money, and that was intent enough. His license was revoked.

The amazing thing was that this broker, having already been disciplined by the state bar for this conduct, didn’t slow down. He was in the business of buying cheap rentals, doing some rehab, and making big money, so he didn’t care. Fifty three convictions rightly got DRE’s attention. But this may be a warning to the many conscientious brokers who have arrangements with lenders to manage foreclosed property. Foreclosed properties can easily have building code violations. The brokers often are required to front the costs for rehabbing the property for management and resale, with a long wait to be reimbursed. This could be the next target rich environment for DRE regulators, once the loan modification complaints slow down.
Robbins v Davi (2009) 175 CalApp 4th 118.

Law Office of James J. Falcone