Silence fills the room as the realization hits you: your real estate license may get suspended. Every day, you tried to stay above board. But one mistake threatens to shake your career to its core.
What happens if your real estate license is suspended? There is no one-size answer to this question. The exact extent of the consequences of a suspended license depends on your real estate misdemeanor.
But the common consequence is the cessation of real estate activities, fines, and a tattered reputation.
Below, we will explore what results from a suspended real estate license. We will dive into the consequences of such an unfortunate situation and differentiate between suspension and revocation. By reading on, you will gain insights that could help safeguard your career against unexpected pitfalls.
What Does a Suspended Real Estate License Mean?
A suspended real estate license is a temporary halt in an agent’s ability to practice real estate. It’s akin to putting your real estate license on hold, where one’s professional activities are paused. But instead of being a personal choice, this time, it’s due to certain infractions or non-compliance with set rules and regulations.
The most common type of real estate license suspension is a conditional suspension. A conditional suspension involves minor violations where reinstatement conditions are clearly defined; say completing pending educational credits or paying off late fees. Once these conditions are satisfied, the suspension will be lifted.
The consequences include losing your capacity to generate income for the duration of the suspension, damaging your reputation, and facing potential penalties when trying to reinstate your credentials.
What Does a Revoked Real Estate License Mean?
A revoked real estate license is a more serious matter with severe consequences for your professional life. License revocation means your state’s licensing body has decided to take away your permission to practice in the field.
The reasons that could lead you to lose your license are vast. But a constant violation of the code of ethics, mishandling funds, or crime make you a good candidate for revocation.
Take, for instance, an agent who consistently breaks their fiduciary duty by putting personal gain above clients’ interests. Or consider another scenario where an agent misappropriates client funds intended for property purchases into their own pocket; this is grounds for revocation.
However, not all revocations are permanent. There lies a slight distinction between temporary and permanent revocations. Temporary revocation typically serves as punitive action designed to correct behavior and lasts until specific conditions are satisfied or a certain period has lapsed.
But a permanent revocation is usually reserved for more egregious offenses. It implies that the offender will never be allowed back into the real estate profession.
What Happens If Your Real Estate License Is Suspended?
What happens if your real estate license is suspended is as scary as it sounds. If you got the chance to read: how can you inactivate your real estate license, then you know you can put your career on hold.
But when a regulatory agency does it for you, then the implications are heavy:
Lose the Ability to Practice Real Estate
Should you lose your license, you will be immediately barred from practicing. No commissions, real estate transactions, or open houses; every activity must go into sleep mode.
But if a broker’s license is suspended, the inability to practice extends to the agents working under them. Every active license under their governance will remain inactive until the reinstatement of the broker or the agents joins a different agency.
For example, according to the Virginia Administrative Code, if a designated broker’s license is suspended, all licenses associated with the broker must be returned to the Virginia Real Estate Board. They will remain with the board until it receives a written re-issuance request from another broker or the same broker upon reinstatement.
Disciplinary Actions and Fines
It goes without saying that every misconduct is followed by disciplinary action. The action taken against you will depend on the severity of your offense. You may face minor fines if you have committed what your state deems a minor offense.
For example, most conditional suspensions carry a delinquent fee.
But offenses that result from a deliberate disregard of state laws or the Administrative Code call for probation. The real estate commissioner in your state may combine the probationary period with a Continuing Education demand. The CE works to reprimand licensees and remind them of appropriate real estate practices.
A glance at the Mississippi Real Estate Commission’s disciplinary actions will reveal a course of action where agents in full suspension must submit to a probationary period. During this time, agents must also complete specified hours of Continuing Education.
Ruined Reputation and Livelihood
Of the consequences associated with regulatory misconduct, this is by far the most. Money you can pay, and continuing education courses are easy to take, but there is very little, if anything at all, you can do to regain client trust.
Reputation is one of those things that take years to build but a few minutes to destroy. Once trust is lost, it could take forever to rebuild.
In reality, any form of disciplinary action casts doubt on your capability as an agent. Clients who once held you in high regard start losing confidence and trust.
But the damage doesn’t stop there. With this dent in your professional persona comes a bigger challenge: finding another brokerage to accept you or clients to work with.
Turning Setbacks into Professional Comebacks
License revocation is a costly price to pay. I am not only talking about the fines but also the blow your image as an agent takes.
However, understanding these consequences is the first step towards avoiding them. Here are some action steps that can help:
1. Stay educated: Keep yourself updated with all the rules and regulations related to practicing real estate in your state.
2. Maintain ethical standards: Always put client interests above yours. Never mishandle funds or commit any kind of fraud.
3. Seek legal advice when needed: If you’re unsure about certain aspects of transactions or contracts, it’s better to seek legal advice than make mistakes.
Yes, losing a license is petrifying, but it’s not always permanent unless you’ve committed serious offenses. So, stay vigilant about following laws and maintaining high ethical standards.
Have you ever faced such an unfortunate situation? Or do you know someone who has? Share your experiences in the comments below. They might just help another agent avoid making similar mistakes!