Integrity and transparency are the cornerstones of the real estate industry, and nowhere are these principles more essential than advertising. Property management companies and designated brokers must operate within strict regulations to ensure their marketing practices are in compliance with real estate commission requirements.
The intricacies of maintaining ethical advertising practices can seem overwhelming at times. However, adherence to these guidelines is not merely a legal obligation. It's also a commitment to upholding the profession's integrity and fostering positive consumer experiences.
Ways to Endanger or Lose Your License
Here are a few actions that can put your firm's license at risk:
Carelessness With Client Funds
Every real estate commission has specific requirements for managing others' money. It's imperative to keep detailed records, avoid commingling funds, and converting funds.
Fraud and Misrepresentation
You need to be transparent and upfront with your clients to avoid any misrepresentation and confusion. Real estate fraud is quite common, but it's usually due to lack of knowledge and not intentional theft.
Refusal to Comply With Audits and Investigations
As a property management firm, if you are subject to an audit or investigation by the real estate commission, you are required by law to cooperate. Refusal to comply with audits or investigations and submit necessary documentation can lead to a loss of license, fines, loss of revenue, etc.
What You Need to Know About Real Estate Commission Investigations
If you're the subject of an investigation, you should be organized in how you deal with the process. Ensure that you meet any deadlines given to respond to the investigation. Requirements vary by jurisdiction.
Common Issues That Result in Investigations
There are two types of audits. One type is an investigative audit which occurs as a result of a complaint made to the commission. The second is a routine audit made when licensed entities are randomly selected.
Both kinds of audits are expensive in terms of time and money.
Lariat Realty Advisors has successfully resolved many complaints, audits, and investigations over the years. If you have questions or we can assist you in helping ensure you are operating compliantly, don't hesitate to reach out. Our team looks forward to talking with you!