4.2 License Law Violations & Discipline
Key Takeaways
- NREC can investigate complaints, conduct hearings, and impose disciplinary actions
- Violations can result in license denial, suspension, revocation, probation, or fines
- Common violations include misrepresentation, commingling, unlicensed activity, and disclosure violations
- Practicing without a license is a criminal offense in Nebraska
- Licensees have due process rights including notice and hearing before disciplinary action
Last updated: January 2026
NREC has authority to investigate complaints and take disciplinary action against licensees who violate the Nebraska Real Estate License Act.
Common Violations
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 (72 hrs) |
| Poor records | Inadequate documentation |
Agency and Disclosure Violations
| Violation | Description |
|---|---|
| Agency disclosure failures | Failing to provide required 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 | Continuing to work after expiration |
| Paying unlicensed persons | Compensating unlicensed individuals for licensed activities |
Warning: Practicing real estate without a license is a criminal offense in Nebraska.
Disciplinary Process
Investigation
- Complaint filed with NREC (or NREC initiates investigation)
- Investigation conducted by NREC staff
- Evidence gathered (documents, interviews, audits)
- Determination made whether to proceed
Hearing Process
If NREC proceeds with disciplinary action:
| Step | Description |
|---|---|
| Notice | Licensee notified of charges |
| Hearing | Formal hearing before Commission |
| Evidence | Both sides present evidence |
| Decision | Commission issues written decision |
| Appeal | Licensee may appeal to court |
Subpoena Power
NREC has subpoena power for hearings:
- Can compel testimony
- Can require document production
- Enforceable through the courts
Due Process Rights
Licensees have the right to:
- Notice of charges
- Hearing before adverse action
- Representation by attorney
- Present evidence and witnesses
- Appeal unfavorable decisions
Disciplinary Actions
NREC may impose various sanctions:
| Action | Description |
|---|---|
| Denial | Refuse to issue license |
| Probation | Conditional license with restrictions |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Reprimand | Formal warning |
| Civil fine | Monetary penalty |
| Education | Required additional training |
Factors Considered in Discipline
| 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 |
Criminal Penalties
Certain violations may result in criminal prosecution:
| Violation | Potential Consequences |
|---|---|
| Practicing without license | Criminal charges, fines |
| Fraud | Criminal prosecution |
| Conversion | Criminal charges, potential imprisonment |
2025 Advertising Regulation Changes
NREC has adopted new regulations relating to advertising. Key points:
| Requirement | Description |
|---|---|
| Truthfulness | All advertising must be truthful |
| Identification | Licensee and brokerage must be identifiable |
| No misleading claims | Cannot make false or misleading statements |
| Team names | Must comply with NREC rules |
Consumer Protection
Complaint Process
Consumers can file complaints with NREC:
- Submit complaint in writing
- NREC reviews for jurisdiction
- Investigation if warranted
- Disposition - dismiss or proceed
- Resolution - discipline if appropriate
Consumer Remedies
| Remedy | Description |
|---|---|
| Civil lawsuit | Consumer can sue licensee |
| NREC complaint | Administrative action |
| Damages | Recovery of actual damages |
| Attorney fees | May be recovered in some cases |
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Test Your Knowledge
Which action is a criminal offense in Nebraska?
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Test Your Knowledge
What rights does a Nebraska licensee have before NREC takes disciplinary action?
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B
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D
Test Your Knowledge
Which of the following is NOT a disciplinary action NREC can impose?
A
B
C
D
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