Key Takeaways
- AREC can investigate complaints, conduct hearings, and impose disciplinary actions
- Violations can result in license denial, suspension, revocation, fines, or civil penalties
- Common violations include misrepresentation, commingling, unlicensed activity, and disclosure violations
- Practicing without a license is prohibited and can result in criminal penalties
- Licensees have due process rights including notice and hearing before disciplinary action
License Law Violations & Discipline
AREC has authority to investigate complaints and take disciplinary action against licensees who violate Alaska Statutes Title 8 Chapter 88 and 12 AAC 64.
Grounds for Disciplinary Action
Misrepresentation and Fraud
| Violation | Description |
|---|---|
| Material misrepresentation | False statements about important facts |
| Omission | Failing to disclose known material defects |
| Fraud | Intentional deception for personal gain |
| False advertising | Misleading marketing or claims |
Trust Account Violations
| Violation | Description |
|---|---|
| Commingling | Mixing client and broker funds |
| Conversion | Using client funds without authorization |
| Failure to deposit | Not depositing funds timely |
| Poor records | Inadequate documentation |
Agency and Disclosure Violations
| Violation | Description |
|---|---|
| Agency disclosure failure | Not providing required agency disclosures |
| Undisclosed dual agency | Acting for both parties without consent |
| Breach of fiduciary duty | Violating duties to clients |
| Undisclosed interest | Failing to disclose personal interest |
Unlicensed Activity
| Violation | Description |
|---|---|
| Practicing without license | Performing activities requiring a license |
| Practicing on expired license | Working after license expiration |
| Paying unlicensed persons | Compensating unlicensed individuals for licensed activities |
Other Violations
| Violation | Description |
|---|---|
| Incompetence | Lack of skill or knowledge |
| Criminal conviction | Conviction of crime involving moral turpitude |
| Failure to supervise | Broker not properly supervising salespersons |
| Improper advertising | Not following advertising requirements |
Warning: Practicing real estate without a license is prohibited and can result in criminal prosecution.
Disciplinary Process
Investigation
- Complaint filed with AREC (or AREC initiates investigation)
- Investigation conducted by DCBPL staff
- Evidence gathered (documents, interviews, audits)
- Determination made whether to proceed
Hearing Process
If AREC proceeds with disciplinary action:
| Step | Description |
|---|---|
| Notice | Licensee notified of charges |
| Response | Licensee may respond in writing |
| Hearing | Formal hearing before Commission or hearing officer |
| Evidence | Both sides present evidence |
| Decision | Commission issues written decision |
| Appeal | Licensee may appeal to court |
Due Process Rights
Licensees have the right to:
- Notice of charges
- Hearing before adverse action
- Representation by attorney
- Present evidence and witnesses
- Cross-examine witnesses
- Appeal unfavorable decisions
Disciplinary Actions
AREC may impose various sanctions:
| Action | Description |
|---|---|
| Denial | Refuse to issue license |
| Suspension | Temporary loss of license (specified period) |
| Revocation | Permanent loss of license |
| Reprimand | Formal warning |
| Fine | Monetary penalty (up to $25,000 per violation) |
| Civil penalty | Additional monetary penalty |
| Probation | Conditional license with restrictions |
| Education | Required additional training |
| Restitution | Order to repay injured party |
Factors Considered
| Factor | Impact |
|---|---|
| Severity of violation | More serious = harsher penalty |
| Prior disciplinary history | Repeat violations = stricter |
| Harm to consumers | Consumer damage = more serious |
| Cooperation | Cooperation may reduce penalty |
| Rehabilitation | Remedial steps may help |
| Intentional vs. negligent | Intent results in stricter penalty |
License Reinstatement
After suspension or revocation, licensees may be able to reinstate:
After Suspension
| Requirement | Details |
|---|---|
| Wait period | Suspension period must be completed |
| Conditions | Must meet any conditions imposed |
| Application | Apply for reinstatement |
| Fee | Pay reinstatement fee |
After Revocation
| Requirement | Details |
|---|---|
| Wait period | Usually 3-5 years minimum |
| Application | Petition AREC for reinstatement |
| Evidence | Show rehabilitation |
| Re-examination | May be required |
| Conditions | May have restrictions |
Consumer Protection
Surety Fund Claims
Consumers harmed by licensee misconduct can file claims against the Surety Fund:
| Requirement | Details |
|---|---|
| Judgment | Must first obtain court judgment |
| Amount | Maximum $15,000 per transaction |
| Per licensee | Maximum $30,000 total |
| Time limit | 2 years from discovery |
Filing a Complaint
Consumers can file complaints with AREC:
| Step | Action |
|---|---|
| 1 | Complete complaint form |
| 2 | Provide documentation |
| 3 | Submit to AREC |
| 4 | Investigation conducted |
| 5 | Determination made |
Important: AREC investigates complaints but does not award damages to consumers. Consumers seeking compensation must pursue civil remedies or the Surety Fund.
What is the maximum fine AREC can impose per violation?
Which of the following is TRUE about licensee due process rights in Alaska?
What must a consumer do before filing a claim against the Alaska Real Estate Surety Fund?
Which action is NOT a disciplinary action AREC can impose?
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