Bar News - December 15, 2006
Real Estate Law: Highlights of the NH Real Estate Commission Disciplinary Process
By: Robert S. Stephen
Attorney Robert S. Stephen, the attorney member of the NH Real Estate Commission, gave a presentation to the Governor and Executive Council on Oct. 25, 2006 regarding the functions of the NH Real Estate Commission disciplinary process. The following excerpts from the presentation are published to give the readers some background on what to expect if appearing with a client before the Commission.
As the attorney member of the NH Real Estate Commission, I am the presiding officer over the disciplinary hearings of real estate salespersons and brokers. As presiding officer, I take care of the procedural issues and the decorum of the hearing, but all commissioners do participate in the hearings. We typically have at least one disciplinary hearing a month as part of our regularly scheduled monthly meeting. Last year we held 13 meetings, eight disciplinary hearings, two pre-hearing conferences and one discovery hearing.
When a formal complaint is received from the public, a copy of the complaint is sent to the licensee whom the complaint is filed against. The licensee has 30 days to respond in writing. The commission investigator completes an investigative report and provides the report along with the investigative file to one “evaluating commissioner.” The evaluating commissioner presents the case to the full commission at public hearing. After a discussion, the evaluating commissioner makes a recommendation of determination, specifically that the case should be heard, should not be heard or that a settlement agreement should be offered. A vote is taken. If the determination is that the case should be heard, a hearing is scheduled. The complainant will either be the NH Real Estate Commission itself or a complaining party, which can be another licensee or non- licensee consumer who perhaps has a complaint to make arising out of a transaction. The licensee usually appears pro se, with attorneys entering appearances approximately about 10-20 percent of the time. [See NH Administrative Rules, REA 205.06, for requirements for entering appearances at the NH Real Estate Commission].
We handle the disciplinary case just as if we were in a courtroom, although it is a bit less formal. As mentioned, the prosecutor is either the NH Real Estate Commission investigator or the complaining party him or herself. It is important to note that even though the investigator is an employee of the commission, we sit independently as a tribunal and we decide each case as a commission impartially. Whether it is the investigator or a complainant bringing the case, they must prove the case by a preponderance of the evidence for us to find violations. Every bit of testimony is recorded by a court reporter. We often deliberate in front of the parties. It takes a majority vote to find a violation and there must be a quorum of three commissioners to hold a hearing. We know how important the license is to the licensee and we believe it is important to give them a decision as soon as possible.
In some cases, we use our discretion to enter into a settlement agreement with the licensee where we offer a settlement prior to a hearing. Often, the settlement agreement will require the licensee to pay a disciplinary fine or attend a training course in an area of concern, such as ethics or a core course of competency. If a hearing takes place and a finding of violation occurs, the penalty ranges from mandatory training, a suspension or loss of license and/or a fine of up to $2,000 per occurrence as set forth in RSA 331-a:28. [All of the laws regarding real estate practice are set forth in Chapter 331-A. In addition to Chapter 331-A, there are rules regarding the hearing process and those can be found in NH Administrative Rules Rea 200 et seq.] We are seeing more and more complaints and what appear to be increasingly complicated complaints.
As commissioners, we have a duty to protect the consumer from unscrupulous or dangerous salespersons or brokers. We ask every applicant if they have been convicted of a misdemeanor or felony and we don’t take their answer as fact; we do a background check to double check as required by RSA 331-A:10. It is amazing how many times we have an applicant who has answered “no” to that question and then the results of the background check show that they have convictions. When that happens, we require the applicant to appear before the commission to explain their convictions and/or their answer to the question. We take the incorrect answers very seriously because if they are lying on the application, it could indicate a pattern where they may push the envelope in a real estate transaction at the expense of the public. We make a judgment call when it comes to the conviction and balance the interests of the applicant in furthering their professional goals with the interest of the public. We often will require that an applicant, where they may have convictions of violence, for example, provide proof from a counselor that he or she is not a danger to the public and we always require that the supervising broker be informed of the convictions and supervise the applicant more closely.
I would like to mention a couple of cases that demonstrate our role in protecting the consumer. In one case, we found that the broker forged the signature of an elderly couple and we took his real estate license for life, in addition to fining him $8,900. In another case involving forgery by a broker, we ordered fines of $23,000 in addition to taking the license for life. Most cases, however, are not so egregious and often involve either a finding of no violation or a finding of a violation with a minimal fine and training. The penalty is factually driven; the more serious the offense, the stiffer the penalty will be. It is the exception rather than the rule for us to take someone’s license away.
Robert S. Stephen is the attorney member of the New Hampshire Real Estate Commission, appointed on Sept. 17, 2003. He is also Special Justice of the Derry District Court. Stephen is also the managing attorney of Stephen Law Group in Manchester.