Advice if your Real Estate License is being investigated by the Minnesota Commerce Department.
Minnesota Department of Commerce enforcement personnel may contact you to investigate a complaint or compliance issue relating to your Real Estate Salesperson or Broker License. Here are several tips regarding how to handle any such conversation or investigation:
- Don’t feel obligated to answer questions before speaking to your broker or legal counsel. The Minnesota Department of Commerce may call and immediately commence questions and information gathering which they will use to build a case against a licensee. It is important that you understand you have the right to abstain from answering their questions until you consult with your broker or legal counsel. They should be providing you with confirmation of that fact, via a Tennessen Warning. You may also need to speak with your E & O insurer as soon as you’re aware of an investigation to determine whether you may have coverage for such an event. Before guessing about a file or a matter that may have occurred some time ago. ask them what file or transaction they’d like to know about, and set up a time to call them back or meet with them once you’ve had an opportunity to review your file. No matter the pressure, you have time to review the transaction and call your broker/legal counsel before answering any questions.
- You have the right to have legal representation in a Minnesota Department of Commerceinvestigation or enforcement action. Make certain you obtain the assistance of someone who has the expertise and knowledge about the enforcement process and your rights in an investigation before moving forward.
- Take the call seriously. Even if you think the inquirer is missing some facts or asking for general information. Remember the old saying “everything you say can and will be used against you…” Although some investigations or enforcement actions are the result of the Minnesota Department of Commerce having received false information or erroneous statements in a complaint, do not make the mistake of presuming you have nothing to be concerned about, such that you are too casual about what you say, or the significance of such an investigation. Since any violation of licensing law can result in a fine of up to $10,000 per violation (plus the costs of the investigation), it is important to devote adequate time and consideration to how you will handle such an investigation.
- Be proactive. The best way to stay out of trouble is to follow the rules. The best way to follow the rules is to read about them regularly and to know what you are required to do, and what you are prohibited from doing, as a real estate licensee. The five tips at the beginning of this article are a good place to start.
If real estate licensees break the law and harm consumers, they should be held accountable. There is no advantage to the industry in having bad characters in the real estate business.
However, you are innocent until proven guilty. If the DOC enforcement staff contacts you, remember it is likely they are seeking to determine whether you have violated licensing laws. They tend to focus on finding violations but are very open minded about hearing your side of the story. Know and follow real estate licensing regulations and applicable law, stay current with changes to statutes that impact your business, and if you are investigated, remember to consult your E & O provider, broker and legal counsel before engaging in a response to a Minnesota Department of Commerce inquiry or enforcement action.
Fabian Hoffner at The Hoffner Firm is a former Assistant Attorney General for the Commerce Department and has effectively represented Real Estate Agents (realtors) and Real Estate Brokers for over 20 years. He can effectively help you too. Call for a free consultation at 612-206-3777.