The Florida Real Estate Commission (FREC) plays a critical role in regulating the practice of real estate in Florida. Established to protect the public and ensure a high standard of professionalism within the real estate industry, FREC oversees the licensing and conduct of real estate professionals. Understanding how FREC operates, what to do if you receive a complaint, and how to avoid such complaints is essential for any real estate agent or broker practicing in Florida.
Who is Covered by FREC Rules?
FREC’s jurisdiction extends to a broad range of real estate professionals, including:
- Real Estate Sales Associates: Individuals licensed to perform real estate services under the supervision of a broker.
- Real Estate Brokers: Licensed professionals who are responsible for overseeing the actions of sales associates and managing real estate transactions.
- Brokerage Firms: Companies licensed to conduct real estate business in Florida.
- Real Estate Schools and Instructors: Institutions and individuals responsible for educating and training aspiring real estate professionals.
These individuals and entities must adhere to the rules and regulations set forth by FREC, as violations can lead to significant consequences, including fines, license suspension, or revocation.
The FREC Complaint Process
FREC has established a structured process for handling complaints against real estate professionals. The process is designed to ensure that complaints are handled fairly and that any disciplinary actions are justified.
- Filing a Complaint
Any member of the public, a fellow real estate professional, or even FREC itself can file a complaint against a real estate licensee. Complaints must be submitted in writing to the Florida Department of Business and Professional Regulation (DBPR), which acts as the administrative arm of FREC. The complaint must detail the alleged violation of Florida real estate law or FREC rules.
- Initial Review
Once a complaint is received, it undergoes an initial review by the DBPR’s Division of Real Estate to determine if it involves a violation of the real estate license law (Chapter 475, Florida Statutes) or FREC rules. If the complaint is deemed legally sufficient, it moves forward to the investigation phase.
- Investigation
An investigator from the DBPR will be assigned to gather facts and evidence related to the complaint. This may involve interviewing witnesses, collecting documents, and examining the conduct of the licensee in question. The investigation is a crucial step in determining whether there is probable cause to believe a violation has occurred.
- Probable Cause Panel
A probable cause panel, typically consisting of two members of FREC, reviews the investigation report and determines whether there is sufficient evidence to proceed with disciplinary action. If probable cause is found, formal charges are filed against the licensee. If no probable cause is found, the case is dismissed, and the matter is closed.
- Formal Hearing
If charges are filed, the licensee is entitled to a formal hearing before an administrative law judge. During the hearing, both the DBPR and the licensee can present evidence, call witnesses, and make arguments. The administrative law judge then issues a recommended order, which includes findings of fact, conclusions of law, and a recommended penalty.
- Final Order by FREC
FREC reviews the recommended order and issues a final order, which may accept, reject, or modify the administrative law judge’s recommendations. The final order may impose penalties such as fines, suspension, or revocation of the licensee’s real estate license.
- Appeal
If the licensee disagrees with FREC’s final order, they have the right to appeal the decision to the appropriate District Court of Appeal in Florida. The appeal must be based on the grounds that FREC’s decision was not supported by substantial evidence or was arbitrary and capricious.
What to Do If You Receive a FREC Complaint
Receiving a FREC complaint can be a stressful experience, but knowing how to respond can help mitigate the potential impact on your career.
- Do Not Ignore the Complaint
Ignoring a complaint will not make it go away and could result in additional penalties. It’s crucial to respond promptly to any communication from the DBPR or FREC.
- Seek Legal Counsel
Consulting with an attorney who specializes in real estate law and has experience with FREC proceedings is highly advisable. Legal counsel can help you understand the charges, navigate the complaint process, and develop a defense strategy.
- Gather Evidence
Collect all relevant documents, communications, and records that may support your case. This could include contracts, emails, text messages, and notes from meetings with clients.
- Prepare for the Investigation
Be prepared to cooperate with the DBPR investigator. However, it’s essential to have your attorney present during any interviews to ensure your rights are protected.
- Consider Settlement Options
In some cases, it may be in your best interest to negotiate a settlement with FREC rather than proceed to a formal hearing. A settlement could result in reduced penalties or an agreement to take corrective actions.
Best Practices to Avoid FREC Complaints
Preventing complaints is always better than dealing with them after the fact. Here are some best practices that can help you avoid FREC complaints:
- Stay Educated and Informed
Continuously educate yourself on Florida real estate laws and FREC rules. Regularly attend continuing education courses and stay updated on changes in the law. Understanding the legal and ethical standards expected of real estate professionals is crucial.
- Communicate Clearly and Honestly
Clear and honest communication with clients is essential to avoid misunderstandings that could lead to complaints. Always explain contracts, disclose material facts, and keep clients informed throughout the transaction process.
- Keep Detailed Records
Maintain thorough records of all transactions, communications, and agreements. Good record-keeping can provide valuable evidence if a complaint arises and demonstrates that you acted in good faith.
- Act Within Your Scope of Authority
Do not provide legal or financial advice unless you are qualified to do so. Always refer clients to appropriate professionals, such as attorneys or accountants, for advice outside your expertise.
- Adhere to Ethical Standards
Follow the Code of Ethics established by the National Association of Realtors (NAR) and any additional ethical guidelines set by your brokerage. Ethical behavior is not only a legal requirement but also builds trust with clients and reduces the risk of complaints.
Conclusion
FREC is tasked with ensuring that real estate professionals in Florida adhere to high standards of conduct. Understanding the FREC complaint process, knowing what to do if you receive a complaint, and implementing best practices to avoid complaints are crucial for maintaining a successful real estate career in Florida. By staying informed, communicating effectively, and adhering to ethical standards, real estate professionals can minimize the risk of FREC complaints and protect their licenses. If you need help responding to a complaint or have questions about FREC, call the Florida business lawyers at MSD-BD for a free consultation.
References
- Florida Statutes, Chapter 475 - Real Estate Brokers, Sales Associates, Schools, and Appraisers.
- Florida Department of Business and Professional Regulation (DBPR) - Real Estate Commission.
- National Association of Realtors (NAR) Code of Ethics.
- What Do I Do if I Receive a Cease-and-Desist from the Florida DBPR? W. Chase Carpenter. June 4, 2024.
About the Author:
Chase Carpenter is a partner in the Business Division of Law Offices of Moffa, Sutton, & Donnini, P.A. His practice revolves around business transactions and business litigation. Mr. Carpenter handles a wide range of cases including contract drafting, partnership disputes, commercial leases, and construction litigation. These cases encompass diverse industries, including healthcare, technology, real estate investment, and government contracting.
About the Firm:
The Law Offices of Moffa, Sutton, & Donnini, P.A., also known as MSD Business, is a local business law firm in Tampa, FL, serving clients throughout Fort Lauderdale and statewide. Our firm has a long history of helping clients navigate all types of complex legal matters, including local and state tax issues. In our business law practice, we assist clients with everything from mergers and acquisitions to contract disputes, business litigation, general counsel, and more.