As a result of recent legislation it is now somewhat easier for the California Real Estate Commissioner to revoke or deny a real estate license than it was a year ago. This may be a good thing. Currently there are somewhat more than 537,000 real estate licensees in the Golden State. That's a 20% increase from just two years ago. Really, it looks like we have enough.

The legislation referred to was Assembly Bill 840 (Emmerson), which was signed into law by the Governor on July 27. It undoes an unusual provision of previous law that came to light last fall in the case of Petropoulos v. Department of Real Estate.

In that case, the Commissioner had sought to revoke the license of an agent who had pleaded guilty to misdemeanor battery against his then-girlfriend and had pleaded nolo contendere (no contest) to misdemeanor battery against his former wife. At that time, Business and Professions Code 10177(b), which applies to real estate licensees only, provided that the Real Estate Commissioner could suspend, revoke, or deny the license of a person who had "… entered a plea of guilty or nolo contendere to, or has been found guilty of, or been convicted of, a felony or a crime involving moral turpitude … ."

In the Petropoulos case, a lower court ruled that the assaults, which were misdemeanor offenses, had not involved moral turpitude. The Real Estate Commissioner did not contend this. Subsequently, California's First Appellate District Court of Appeal ruled that the Department of Real Estate could not "take disciplinary action against a licensee convicted of a misdemeanor, unless the offense involves moral turpitude."

Findings of moral turpitude, as once were findings of "bad character," are liable to be subjective, to say the least. Requiring such findings in misdemeanor cases, even if the misdemeanor is clearly related to the functions and duties of a real estate licensee, seemed an unwarranted restriction on the disciplinary powers of the Real Estate Commissioner.

Hence, Assembly Bill 840, which was sponsored by the Department of Real Estate and supported by both the California Association of Realtors® and the California Association of Mortgage Brokers. It passed without opposition.

It is unlikely, of course, that the Commissioner's newly-expanded disciplinary powers will result in much of a dent being made in the state's current enormous real estate licensee population. Market forces will probably take care of that. Applications to take the salesperson's examination were down 40 percent in the second quarter of this year compared to the same quarter last year.

Published: October 15, 2007

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Bob Hunt is a director of the National Association of Realtors and is author of the recently published book, "Real Estate the Ethical Way." A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at .