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Virginia Real Estate Disciplinary Procedures & Sanctions

Instructor: Kyle Aken

Kyle is a journalist and marketer that has taught writing to a number of different children and adults after graduating from college with a degree in Journalism. He has a passion for not just the written word, but for finding the universal truths of the world.

There are specific guidelines in Virginia for improper brokerage commission and improper dealing. These actions can result in disciplinary action and sanctions. Learn about those punishments in this lesson.

Virginia Real Estate

As a real estate broker in the state of Virginia, there are certain guidelines that you will need to follow to avoid improper brokerage and improper dealings under the Code of Virginia. Salespersons representing brokers and associate brokers must also adhere to these guidelines to avoid disciplinary actions being taken against them.

The Virginia Real Estate Board sets and oversees these regulations for license holders. The board is overseen by the Virginia Department of Professional and Occupational Regulation (DPOR). Let's discuss some of the specifics of violations and the sanctions that can result.

Investigations and Disciplinary Procedures

The Virginia Real Estate Board is responsible for licensure and certification for brokers, salespersons, and firms. The Compliance and Investigative Division (CID) of the Virginia DPOR reviews complaints filed against licensees. A licensee is any entity such as brokers, salespersons, or firms that have received licensure from the real estate board.

If the CID finds probable cause for a violation of any laws or regulations, then an investigation begins. If any violations have taken place, then the licensee must appear at an Informal Fact Finding Conference (IFF). In some cases, a consent order may be issued before the IFF is held. This means violations and sanctions are applied to avoid the conference, which takes time and costs money.

When an IFF does take place, a hearing officer makes a recommendation for sanctions to the board. The board will review the violations and the recommended sanctions, and may administer any of the following sanctions:

  • Monetary penalties
  • Suspension or revocation of license
  • Probation
  • Additional education / continuing education
  • Denial of license renewal

The licensee that has committed the violations is allowed to continue with their brokerage practice so long as the board does not suspend or revoke their license.

Improper Brokerage Commission Violations

Licensure

If a licensee engaging in a real estate transaction offers to pay a fee or transaction-based fee to someone who does not hold a real estate license, it is considered improper brokerage commission. The broker accepting the fee must hold a license within the jurisdiction of the transaction or hold a license in a jurisdiction that has the same educational and experience requirements as the location of the transaction.

Extraneous Commissions

A salesperson or associate broker may not accept a commission, fee, or any valuable consideration for services in real estate from any individual or entity aside from their principal broker or supervising broker at the time of transaction.

Financial Benefit from Information

Consent from the principal broker is required for the use of information that is gained as a result from performance of any real estate transaction. A licensee can't act as an employee of a company that provides settlement services in real estate without written consent from the broker. They are also not allowed to offer real estate settlement services to customers or clients without written consent.

Third-Party Incentives

Licensees may not receive financial rewards or incentives from any third party that is needed for contract fulfillment. This can include appraisers, inspectors, and surveyors. This applies only when one of the principals to the contract is paying for these services and has not received full written disclosure informing them of the applied incentive/commission.

Paying for Services Needed to Fulfill Contract

Licensees aren't allowed to pay for contractual services unless written disclosure has been provided to the principals. Since the licensee has personal interest in the completion of a contract, it may appear to be 'self-serving' to pay for services.

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