Topic 6.1: Disciplinary Procedures
Learning Objectives
After successfully completing this topic, you will be able to
• list the eight steps in the disciplinary process,
• describe the organization of the probable cause panel, and
• list the qualifications for a person to be an administrative law judge.
The legal bases for investigations and hearings
The statutes and rules that control investigations and discipline are based on
• Chapter 120, F.S. (Administrative Procedures Act),
• Chapter 455, F.S. (Regulation of Professions and occupations),
• Chapter 475, F.S. (Florida Real Estate License Law),
• Chapter 28, Sections 101 through 110 (Administrative Hearings), and
• Rule 61J2, F.A.C. (Rules of the Florida Real Estate Commission).
The Eight Steps in the Disciplinary Process
There are eight steps in the complaint process. Each will be discussed separately.
- Filing the complaint
- Investigation
- Probable Cause
- Formal complaint
- Informal proceeding
- Formal hearing
- Final Order
- Judicial review (appeal)
Filing the Complaint
Any person may file a complaint with DBPR. The alleged violations need not pertain specifically to real estate transactions and need not have taken place in Florida. A complaint with only a corporate name is not sufficient. The complaint must include the name of a person who holds a real estate license.
A complaint is “legally sufficient” if it alleges a violation of a Florida statute, a DBPR rule, or a FREC rule. Once a complaint is determined to be legally sufficient, the DBPR will assign an investigator to the matter. If a complaint analyst finds the complaint is not legally sufficient, (“The salesperson was very rude…”) the file will be closed.
There is a five-year statute of limitations for the Department to file an administrative complaint against a licensee.
Anonymous complaints
An anonymous complaint is more difficult to prove. The DBPR will investigate only if the complaint is legally sufficient, a substantial violation, and deemed by DRE to be true. An example might be an anonymous complaint about a blind ad that includes the printed advertisement.
The Investigation
An investigation may be started based on a complaint, or may be started if the Division of Real Estate believes that a licensee has violated a statute or a rule.
When an investigation begins, the DRE forwards a copy of the complaint to the subject unless the DRE is investigating a crime. The subject may submit a written response that must be considered by the probable cause panel. The DRE may question complainants, respondents, and witnesses. It can take depositions and issue subpoenas for documents.
The DRE must keep all complaint information confidential until at least ten days after probable cause has been found unless the subject of the investigation waives the right to confidentiality.
If an investigator learns that a licensee is a danger to the public by, for example, stealing trust funds, the Secretary of the DBPR can issue an emergency, or summary, suspension.
If a Consumer Withdraws the Complaint
If the complainant later withdraws the complaint, DBPR may decide to continue the investigation.
After the investigation is complete, the Department sends the investigator’s report to the FREC Probable Cause Panel.
Probable Cause Panel
The probable-cause panel is made up of at least two members. It should include one consumer member. A former member of the Commission can sit on the panel, but there must be one current member.
Meetings are not open to the public. The remaining FREC members may not be present. The panel acts like a grand jury. It does not determine the guilt or innocence of the subject, just whether there is reasonable cause to hold a hearing.
If the panel votes to dismiss the charges, the panel has the option of issuing a “letter of guidance” (also called a letter of reprimand) to the licensee. If the panel finds that there is probable cause of a violation, it will direct the DBPR to file a formal complaint against the subject.
Formal Administrative Complaint
A formal complaint, also called an administrative complaint, details the charges against the subject. The complaint is sent to the licensee’s address of record (Chapter 455.225, F.S.). The respondent will be given an election of rights, and must respond within 21 days, selecting one of these options:
- elect to meet with the DRE attorney and agree to a stipulation. “I will admit guilt if you’ll agree to a $500 fine.” It’s like a plea agreement. The FREC must agree before a stipulation is finalized.
- not dispute the charges and request an open meeting of the FREC where an agreement may be reached. This is called an informal hearing, and does not include members of the probable cause panel. If the parties reach agreement, a final order is prepared for signature. If the parties cannot reach agreement, a formal hearing is scheduled.
- dispute the charges and request a formal hearing. If any fact is disputed, the formal hearing is mandatory.
Waiver Hearing
If the licensee fails to respond within 21 days, the licensee is considered to waive the election of rights. The case proceeds and the FREC takes it up in an informal hearing.
Settlement Stipulation
If a licensee decides to not contest the facts of the case, the licensee may agree to a settlement stipulation. The stipulation agrees to the facts of the charges and agrees to an appropriate penalty. The stipulation must be approved by the FREC. The licensee and the licensee’s attorney should attend the FREC disciplinary meeting to answer any questions the members may have. If the FREC denies the stipulation penalty, the FREC will usually give the DRE attorney guidance on the penalty it deems appropriate.
Voluntary relinquishment
Sometimes a licensee doesn’t want to go through the disciplinary process and may surrender the license voluntarily. This is called voluntary relinquishment for permanent revocation.
Formal Hearing
An administrative law judge (ALJ) presides. To become an administrative law judge, a person must have been a member of the Florida Bar for at least five years. The judge is an employee of the Division of Administrative Hearings.
All parties must receive at least 14 days’ notice of the hearing. A hearing notice is not a subpoena. If the subject does not appear, the hearing will continue.
The administrative law judge may issue subpoenas. Persons who fail to appear when subpoenaed may be found in contempt of court. Licensees who fail to appear may face disciplinary action.
The administrative law judge submits a recommended order to DBPR which includes both findings of fact and recommendations for discipline based on the Commission’s disciplinary guidelines.
Final Order
Members of the FREC who did not serve on the probable cause panel make up the final order panel. The FREC may accept, reject, or modify the recommended order.
The final order must be written. It must detail the charges, include the facts of the case, show the FREC’s action, and advise the licensee that the final order may be appealed to the District Court of Appeal if done so within 30 days. The final order becomes effective in 30 days, but the licensee can continue to practice during the 30-day period.
Judicial review (appeal)
When filing an appeal, the licensee may request a stay of enforcement. If the court agrees, it will issue a writ of supersedeas which supersedes the FREC’s order and allows the licensee to continue to practice real estate.
If the court finds that the disciplinary process was correctly handled, it must affirm the FREC’s final order. If the court finds that there was a material procedural error during any part of the disciplinary process, it will send the case back for corrective action. If the court reverses a final order, it may award attorney fees and court costs to the respondent.