Key Takeaways
- Violations of Maryland license law can result in fines, suspension, or revocation
- Civil penalties may be up to \$25,000 per violation
- Common violations include trust account mishandling, failure to supervise, and misrepresentation
- The Real Estate Commission investigates complaints and conducts audits
- Licensees have the right to a hearing before disciplinary action is taken
Last updated: January 2026
Maryland License Law Violations and Discipline
The Maryland Real Estate Commission has authority to discipline licensees for violations of the Real Estate Brokers Act and Commission regulations.
Types of Violations
Common Violations
| Category | Examples |
|---|---|
| Trust Account | Failure to deposit timely, commingling, conversion |
| Supervision | Inadequate oversight of salespersons |
| Disclosure | Failure to disclose material facts |
| Misrepresentation | False statements about property or transaction |
| Advertising | Misleading ads, failure to identify broker |
| Unlicensed Activity | Practicing without valid license |
| Agency | Failure to provide required disclosures |
Specific Prohibited Acts
Under Maryland law, violations include:
- Fraud or misrepresentation in obtaining a license
- Dishonest or fraudulent dealings
- False advertising or misleading statements
- Failure to account for funds or documents
- Commingling of client and personal funds
- Splitting fees with unlicensed persons
- Failure to disclose interest in property
- Violating fair housing laws
- Conviction of crime involving moral turpitude
- Practicing while impaired by drugs or alcohol
Disciplinary Process
Investigation
MREC initiates investigations based on:
- Consumer complaints
- Routine audits
- Referrals from other agencies
- Self-reporting by licensees
Resolution Options
| Severity | MREC Action |
|---|---|
| Minor/Technical | Letter of warning or education |
| Moderate | Fine and/or probation |
| Serious | Suspension |
| Severe | License revocation |
Penalties and Sanctions
Civil Penalties
| Violation Type | Maximum Penalty |
|---|---|
| Per violation | $25,000 |
| Multiple violations | Cumulative penalties possible |
Important: Maryland's $25,000 maximum penalty per violation is higher than many other states.
Other Sanctions
| Sanction | Description |
|---|---|
| Probation | License remains active with conditions |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Denial | Refusal to issue or renew license |
| Education | Required completion of courses |
| Audit | Required periodic trust account audits |
Hearing Rights
Licensees facing disciplinary action have the right to:
- Written notice of charges
- Formal hearing before the Commission
- Present evidence and witnesses
- Legal representation
- Appeal adverse decisions
Real Estate Guaranty Fund
Maryland maintains a Real Estate Guaranty Fund to compensate victims of licensee misconduct:
| Feature | Detail |
|---|---|
| Maximum per transaction | Varies |
| Source of funds | Licensee contributions |
| Condition | Licensee must be unable to pay judgment |
| Effect on License | Suspension until fund is reimbursed |
How the Guaranty Fund Works
- Consumer obtains judgment against licensee
- Licensee fails to pay judgment
- Consumer applies to Guaranty Fund
- Fund pays consumer (subject to limits)
- Licensee's license suspended until fund reimbursed
Grounds for Automatic Denial or Revocation
Certain offenses may result in automatic license action:
| Offense | Action |
|---|---|
| Felony conviction (certain types) | Denial or revocation |
| Fraud in obtaining license | Revocation |
| Practicing while suspended | Additional penalties |
| Failure to reimburse Guaranty Fund | Automatic suspension |
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Test Your Knowledge
What is the maximum civil penalty per violation that the Maryland Real Estate Commission can impose?
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Test Your Knowledge
What happens if the Real Estate Guaranty Fund pays a claim against a licensee?
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D