4.2 License Law Violations & Discipline

Key Takeaways

  • Under Miss. Code § 73-35-21, MREC may refuse to issue, suspend, or revoke a license for cause after notice and a hearing.
  • MREC may impose an administrative fine of up to \$1,000 in lieu of or in addition to suspension or revocation — not the \$5,000 some study aids claim.
  • Criminal penalties under § 73-35-31 for unlicensed practice are \$500–\$1,000 and/or up to 90 days for a first offense, and \$1,000–\$2,000 and/or up to 6 months for subsequent offenses.
  • Common grounds include substantial misrepresentation, false promises, commingling/conversion, undisclosed dual agency, and failure to disclose known material defects.
  • Licensees have due-process rights: written notice of charges, a hearing before the Commission, the right to counsel and witnesses, and the right to appeal to chancery/court.
Last updated: June 2026

MREC's Disciplinary Authority

The Mississippi Real Estate Commission (MREC) enforces the Real Estate Brokers License Law of 1954. Under Miss. Code § 73-35-21, the Commission has full power, after notice and a hearing, to refuse to issue, suspend, or revoke a license, and to impose an administrative fine of up to $1,000 for each offense — assessed in lieu of or in addition to suspension or revocation.

Critical correction / exam trap: A common false answer is that MREC can fine $5,000 per violation. That figure does not match Mississippi law. The administrative cap is $1,000 per offense. Separately, the criminal penalties for unlicensed practice (below) reach $2,000 for repeat offenses — but neither is $5,000.

Common Grounds for Discipline

The statute lists specific grounds. Group them by theme to recall them quickly.

Misrepresentation and fraud

ViolationDescription
Substantial misrepresentationA false statement about a material fact in a transaction
Failure to discloseConcealing a known material defect (e.g., a leaking roof)
False promisesPromises likely to influence or persuade a party
Flagrant course of misrepresentationA continued pattern through agents, salespersons, or advertising

Trust-account and money violations

ViolationDescription
ComminglingMixing client and broker funds
ConversionUsing client funds without authorization
Failure to deposit timelyMissing the next-banking-day deadline
Failure to account / remitNot promptly returning funds at consummation or termination

Agency, disclosure, and conduct

ViolationDescription
Undisclosed dual agencyRepresenting both sides without informed written consent
Breach of fiduciary dutyViolating duties of loyalty, care, or accounting
Undisclosed personal interestBuying/selling without revealing the licensee's interest
DiscriminationActing in violation of fair-housing law

Unlicensed and licensing violations

ViolationDescription
Practicing without a licensePerforming licensed acts with no license
Practicing on an expired/lapsed licenseContinuing after expiration
Paying unlicensed personsCompensating unlicensed individuals for licensed activity
License by fraudObtaining a license through false representation

Other statutory grounds include conviction of a felony or crime of moral turpitude, incompetence or untrustworthiness, making false statements or promises, and failure to complete required continuing education.

Disputed earnest money: A frequent real-world trigger for complaints is a failed sale where buyer and seller both demand the deposit. The broker may not simply pick a side. The correct procedures are to hold the funds until the parties reach a mutual written agreement, to await a court order, or to interplead the funds into court — letting a judge decide. Releasing disputed money to one party on the broker's own judgment can itself become a disciplinary ground if it later proves wrong.

The Disciplinary Process — Step by Step

Mississippi discipline follows an administrative due-process model. A licensee is never disciplined in secret; charges and a hearing come first.

  1. Complaint filed with MREC, or MREC initiates its own investigation.
  2. Investigation by MREC staff — documents, interviews, and trust-account audits.
  3. Charge determination — the Commission decides whether to proceed.
  4. Written notice of the specific charges is served on the licensee.
  5. Formal hearing before the Commission, where both sides present evidence and witnesses.
  6. Written decision issued by the Commission.
  7. Appeal — the licensee may appeal an adverse decision to chancery court.

Due-process rights

RightWhat it means
NoticeWritten statement of the charges in advance
HearingOpportunity to be heard before any adverse action
CounselRight to be represented by an attorney
EvidenceRight to present evidence and call witnesses
AppealRight to seek judicial review of the decision

Disciplinary Actions and Penalties

ActionDescription
DenialRefuse to issue or renew a license
ReprimandFormal written warning on the record
SuspensionTemporary loss of license for a set period
RevocationLoss of license; reapplication restricted
Administrative fineUp to $1,000 per offense, alone or with suspension/revocation
Probation / educationConditional license or required additional training

Criminal penalties for unlicensed practice (§ 73-35-31)

Unlicensed practice is a separate criminal matter prosecuted in court, not an MREC administrative sanction:

OffensePenalty
First violationFine $500–$1,000 and/or up to 90 days jail
Second/subsequentFine $1,000–$2,000 and/or up to 6 months jail
Profit penaltyLiability of 1× to any commission wrongfully received

Exam trap: MREC itself cannot impose imprisonment — jail comes only from criminal prosecution through the courts. On the exam, "imprisonment" is never a valid administrative MREC sanction.

Factors weighed at sentencing

FactorEffect on penalty
Severity of the violationMore serious conduct → harsher sanction
Prior disciplinary historyRepeat offenders treated more strictly
Harm to consumersGreater consumer loss → stronger penalty
Cooperation and remediationMay reduce the penalty
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MREC Disciplinary Process
Test Your Knowledge

What is the maximum administrative fine MREC can impose for a single offense?

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Test Your Knowledge

Which sanction is OUTSIDE MREC's administrative authority?

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Test Your Knowledge

A person practices real estate in Mississippi without ever holding a license. For a first offense, what does § 73-35-31 authorize?

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B
C
D
Test Your Knowledge

Before MREC can suspend or revoke a license, the licensee is entitled to which of the following?

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B
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D
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