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April 2015 Archives

Citations by the DRE: Top Audit Violation #2

Even though the real estate industry has moved into a new millennium with internet marketing, social media, and cloud based transactions, certain things have not changed: the most common violations found in DRE Audits. This is article #2 in a series of articles to call your attention to these common deficiencies and to provide you with procedures that you can follow to ensure compliance with these laws and regulations.

Use of False or Fictitious Name


Fictitious NameCommissioner's Regulation 2731 states that a licensee shall not use a fictitious name in the conduct of any activity for which a license is required under the Real Estate Law unless the licensee is the holder of a license bearing the fictitious name. Brokers should periodically check their license status with the Department to be sure that their license bears the fictitious name(s) they are using. Many brokers cited for violation of this regulation believed that having the dba registered with the county was sufficient to allow them to use it in their real estate business. Other brokers who are cited for this violation state that they had the fictitious name on their license at one time but may have had their license lapse for a brief period of time and failed to add the dba back on to their license.

Want to Get Cited by the DRE? Top Audit Violation #1.

The real estate industry has moved into a new millennium. New things pop up everyday changing the way we do business, such as internet marketing, social media, and cloud based transactions. Yet, certain things have not changed: the most common violations found in DRE Audits. I decided to write a series of articles to call your attention to these common deficiencies and to provide you with procedures that you can follow to ensure compliance with these laws and regulations.

Retention of Records


Office RecordsBusiness and Professions Code Section 10148(a) states that a real estate broker shall retain for three years copies of all listings, deposit slips, canceled checks, trust records, and other documents executed by him or her or obtained by him or her in connection with any transactions for which a real estate license is required. This section requires that, after notice, the books, accounts, and records shall be made available for examination, inspection, and copying by the commissioner or his or her designated representative during regular business hours; and shall, upon the appearance of sufficient cause, be subject to audit without further notice, except that the audit shall not be harassing in nature.

Commercial Leases

Commercial leaseIf you are a Ross store, and you are on one end of a shopping center, and Mervyn's is down at the other end, can you bail out if Mervyn's does? After all, you count on the people-traffic Mervyn's brings into the center. And you even have a "co-tenancy" provision in your lease that says you can. Or does it?

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