The Commission receives 800 to 1,400 complaints annually, covering every aspect of real estate brokerage plus unrelated issues such as criminal convictions. So, what should you do if a complaint is filed against you?
• First, don’t panic. The Commission does not automatically assume that the allegation(s) in a complaint are true. Real estate brokers are considered innocent until proven guilty. However, to fulfill its mission to protect the interests of consumers, the Commission investigates each complaint to determine whether there has been any wrongdoing by a licensee.
• Second, if you receive a Letter of Inquiry from the Commission regarding a complaint, you must respond within fourteen (14) days of its receipt. If you need more time, contact the staff member who sent you the letter and ask for an extension of time to respond. Staff will usually be able to accommodate reasonable requests.
• Third, when responding to a Letter of Inquiry, provide a factual description of the transaction or incident described in the complaint and provide copies of relevant documents to support your statements. The Commission has the authority to expand investigations beyond the allegations described in complaints and may ask you for information and/or documentation regarding other aspects of a transaction or matter. You should fully answer the Letter of Inquiry before the deadline.
• Fourth, you may hire an attorney to represent you in responding to a Letter of Inquiry or when meeting with an Auditor/Investigator; however, it is not a requirement. If you are unsure about whether to obtain legal representation, you may want to discuss your situation with an attorney before deciding.
Cases which cannot be investigated by a Letter of Inquiry or where the broker fails to respond are assigned to a field investigator who performs face-to-face interviews, audits trust accounts and gathers information and documentation that may be needed to evaluate a complaint. In this type of investigation, the Auditor/Investigator typically will contact you to set up an interview.
After receiving your written response to the Commission’s inquiry, it is evaluated it to determine any need for additional information and/or further investigation. Once the file provides a clear understanding of the facts, or in the case of a field investigation, after the report is completed, a decision is made to close the file with or without a warning or to forward the case to the members of the Commission to order its closing or to order an evidentiary hearing. Only Commission members can order a hearing against a broker or licensed firm. If the file is closed, you and the complaining witness will receive notification in writing of the decision.
When the Commission orders a hearing, the case is assigned to a staff attorney to prosecute on behalf of the Commission and you (or your attorney, if you have one) will be contacted to discuss your options for settling the matter.
If a settlement cannot be reached, then the Commission will hold the hearing, which is similar to a trial, except that the nine members of the Commission preside instead of a judge. After evidence is presented by the Commission’s staff attorney and by you (or your attorney), the Commission members will decide whether the evidence warrants disciplinary action and, if so, the appropriate action (reprimand, suspension, or revocation).
All disciplinary actions are published in the Commission’s Real Estate Bulletin, which is sent by mail or email three times annually, and distributed to the North Carolina Association of REALTORS®, the Better Business Bureau in the area where the violation occurred, and the local board.
The Commission retains records of complaints filed against its licensees, and under state law, those files are public records. In the event that someone contacts the Commission to inquire about complaints filed against a broker, the Commission’s staff will report the number of cases and their disposition, and will provide copies if requested to do so.
When a case is closed without any disciplinary action, the Commission’s staff informs callers that the evidence of a violation was insufficient to warrant disciplinary action and that the mere fact that a complaint was filed does not necessarily mean that a broker engaged in misconduct.
In summary, the Commission takes an objective, open-minded approach to investigating each complaint. Only cases involving sufficient, admissible evidence of a violation of the Real Estate License Law (Chapter 93A of the North Carolina General Statutes) or the Commission’s rules result in disciplinary action. If a broker has not committed a violation, there is nothing to fear from a complaint. Moreover, conducting your business with a focus on integrity and customer service will go a long way toward protecting you from ever receiving a complaint.
This article came from the February 2014-Vol44-3 edition of the bulletin.