DRE is Formalizing the Citation and Fine Process

The California Department of Real Estate (“DRE”) is in the process of adopting proposed regulations Section 2907.1, 2907.2, 2907.3, and 2907.4 within Chapter 6, Title 10 of the California Code of Regulations. The proposed sections relate to the issuance of citations and the associated fines to real estate licensees in California. Below, please find a breakdown of what these new regulations intend to do:

  • Section 2907.1 offers the basic rules regarding citations that render any disciplinary matter enforceable – the “who, what, when, where, and how,” without which a person or entity subject to discipline may attempt to challenge the DRE’s action as unfair or arbitrarily enforced.
  • Section 2907.2 functions much like the “Criteria for Rehabilitation” that appear in Section 2911 and 2912 of the Regulations.  It offers guidance regarding those factors that will be considered when establishing the relative seriousness, and therefore cost to the violator, of the offenses subject to citation. Absent such a set of criteria, a person (or entity) subject to this level of discipline may attempt to challenge the DRE’s action as unfair or arbitrarily enforced. However, such criteria allow needed flexibility (within the very limited confines of a $0 to $2,500 penalty range) to deal with the wide variety of facts and circumstances that may occur in any particular violation.
  • Section 2907.3 sets out the aspects of a citation that are subject to challenge via appeal.  It describes, in chronological order, the due process for appeal of a citation and/or fine. In doing so, the regulation provides two opportunities to challenge the discipline. The first is an informal conference with a person designated by the Commissioner for this role, designed to keep the appeal process for this low level of discipline economically efficient for both the respondent and the DRE. The second is the formal hearing process applicable to all discipline matters.
  • Section 2907.4 sets out the time frame for payment of an administrative fine, depending (as appropriate) upon whether a citation and/or fine is subject to appeal and the length of the appeal process. This section also reinforces the statute’s requirement regarding a person (or corporate entity) who fails to pay an assessed fine or otherwise fails to comply with the terms of a citation.

The DRE has not scheduled a public hearing on this proposed action but it will do so if it receives a written request for a public hearing from any interested person no later than 5 p.m. Monday, July 1, 2013. The request may be made by regular mail to the Department of Real Estate, Attn: Daniel E. Kehew, Sacramento Legal Office, 2201 Broadway, Sacramento, CA  95818, an email to DRERegulations@dre.ca.gov, or by facsimile to (916) 227-9458.