4.2 Virginia License Law Violations and Discipline
Key Takeaways
- Violations of Virginia license law can result in fines, suspension, or revocation
- Civil penalties may be up to $2,500 per violation
- Common violations include escrow mishandling, failure to supervise, and misrepresentation
- The Real Estate Board investigates complaints and conducts audits
- Licensees have the right to a hearing before disciplinary action is taken
Last updated: January 2026
The Virginia Real Estate Board has authority to discipline licensees for violations of the Real Estate License Law and Board regulations.
Types of Violations
Common Violations
| Category | Examples |
|---|---|
| Escrow 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 Virginia Code and regulations, 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
The REB initiates investigations based on:
- Consumer complaints
- Routine audits
- Referrals from other agencies
- Self-reporting by licensees
Resolution Options
| Severity | REB 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 | $2,500 |
| Multiple violations | Cumulative penalties possible |
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 escrow audits |
Hearing Rights
Licensees facing disciplinary action have the right to:
- Written notice of charges
- Formal hearing before the Board
- Present evidence and witnesses
- Legal representation
- Appeal adverse decisions
Transaction Recovery Fund
Virginia maintains a Transaction Recovery Fund to compensate victims of licensee misconduct:
| Feature | Detail |
|---|---|
| Maximum per transaction | Varies |
| Source of funds | Licensee fees |
| Condition | Licensee must be unable to pay judgment |
| Effect on License | Suspension until fund is 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 satisfy judgment from Recovery Fund | Automatic suspension |
Loading diagram...
Test Your Knowledge
What is the maximum civil penalty per violation that the Virginia Real Estate Board can impose?
A
B
C
D
Test Your Knowledge
What happens if the Transaction Recovery Fund pays a claim against a licensee?
A
B
C
D