Key Takeaways
- Violations of Washington license law can result in fines, suspension, or revocation
- DOL can impose civil penalties up to $5,000 per violation
- Common violations include trust account mishandling, failure to supervise, and misrepresentation
- DOL investigates complaints and conducts audits of firm operations
- Licensees have the right to a hearing for disciplinary matters
Last updated: January 2026
Washington License Law Violations and Discipline
DOL has authority to discipline licensees for violations of the Real Estate Brokerage Law and DOL rules.
Types of Violations
Common Violations
| Category | Examples |
|---|---|
| Trust Account | Failure to deposit timely, commingling, conversion |
| Supervision | Inadequate oversight of brokers |
| Disclosure | Failure to disclose material facts |
| Misrepresentation | False statements about property or transaction |
| Advertising | Misleading ads, failure to identify firm |
| Unlicensed Activity | Practicing without valid license |
| Agency | Failure to provide pamphlet, undisclosed dual agency |
Specific Prohibited Acts (RCW 18.85.361)
Under Washington law, violations include:
- Fraud or misrepresentation in obtaining a license
- Dishonest dealing with clients or customers
- False advertising or misleading statements
- Failure to account for funds or documents
- Commingling of client and personal funds
- Conversion of trust funds
- Failure to disclose interest in property
- Violating fair housing laws
- Conviction of crime related to honesty or real estate
- Failure to supervise affiliated licensees
- Acting without license or employing unlicensed persons
- Guaranteeing profits from real estate transactions
Disciplinary Process
Investigation
DOL initiates investigations based on:
- Consumer complaints
- Routine compliance audits
- Referrals from other agencies
- Self-reporting by licensees
Resolution Options
| Severity | DOL Action |
|---|---|
| Minor/Technical | Warning letter |
| Moderate | Statement of charges, fine |
| Serious | Formal hearing, suspension |
| Severe | License revocation |
Penalties and Sanctions
Civil Penalties
| Violation Type | Maximum Penalty |
|---|---|
| Per violation | Up to $5,000 |
| Continuing violations | Per day penalties possible |
| Trust account | Higher penalties may apply |
Administrative Sanctions
DOL may impose:
| Sanction | Description |
|---|---|
| Warning | Written notice of violation |
| Fine | Civil penalty up to $5,000 |
| Probation | Conditions on license |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Denial | Refusal to issue or renew |
| Education | Required completion of courses |
Hearing Rights
Licensees facing formal sanctions have the right to:
- Written notice of charges
- Hearing before administrative law judge
- Present evidence and witnesses
- Legal representation
- Appeal adverse decisions
Recovery Account (Education Program Account)
Washington has an Education Program Account that may provide compensation to victims of licensee misconduct:
| Feature | Detail |
|---|---|
| Purpose | Educate licensees; may compensate victims |
| Funded by | License fees |
| Conditions | Licensee unable to pay judgment |
Note: Washington's program focuses on education. Check current DOL rules for any victim compensation provisions.
Common Compliance Issues
Trust Account Violations
| Issue | Consequence |
|---|---|
| Late deposit | Fine, possible suspension |
| Commingling | Serious violation |
| Failure to reconcile | Violation, audit required |
| Conversion | Criminal referral possible |
Supervision Failures
| Issue | Consequence |
|---|---|
| Inadequate oversight | Firm and designated broker liable |
| Unlicensed activity | Serious violation |
| Improper advertising | Fine, correction required |
| Missing disclosures | Violation, training may be required |
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Test Your Knowledge
What is the maximum civil penalty DOL can impose per violation?
A
B
C
D
Test Your Knowledge
Which of the following is NOT a violation of Washington license law?
A
B
C
D