4.2 License Law Violations & Discipline
Key Takeaways
- WVREC can investigate complaints, conduct hearings, and impose disciplinary actions
- Violations can result in license denial, suspension, revocation, or fines
- Common violations include misrepresentation, commingling, unlicensed activity, and agency disclosure violations
- Practicing without a license is a criminal offense in West Virginia
- Licensees have due process rights including notice and hearing before disciplinary action
Last updated: January 2026
WVREC has authority to investigate complaints and take disciplinary action against licensees who violate the West Virginia 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 |
| Poor records | Inadequate documentation |
| Exceeding FDIC limits | Not properly managing excess funds |
Agency and Disclosure Violations
| Violation | Description |
|---|---|
| Disclosure failures | Failing to provide required agency disclosure |
| 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 |
| Expired license | Continuing to work after expiration |
| Paying unlicensed persons | Compensating unlicensed individuals for licensed activities |
| Aiding unlicensed activity | Helping others practice without license |
Warning: Practicing real estate without a license is a criminal offense in West Virginia.
Grounds for Discipline
Under West Virginia law, WVREC may take action for:
| Ground | Examples |
|---|---|
| Obtaining license by fraud | False application information |
| Conviction of crime | Felony or crime involving fraud |
| Incompetence | Lack of knowledge to practice |
| Untrustworthiness | Pattern of dishonest behavior |
| Violating License Act | Any violation of WV Code 30-40 |
| Violating Commission rules | Administrative rule violations |
Disciplinary Process
Investigation
- Complaint filed with WVREC (or WVREC initiates investigation)
- Investigation conducted by WVREC staff
- Evidence gathered (documents, interviews, audits)
- Determination made whether to proceed
Hearing Process
If WVREC 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 |
Due Process Rights
Licensees have the right to:
- Notice of charges
- Hearing before adverse action
- Representation by attorney
- Present evidence and witnesses
- Cross-examine witnesses
- Appeal unfavorable decisions
Disciplinary Actions
WVREC may impose various sanctions:
| Action | Description |
|---|---|
| Denial | Refuse to issue license |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Censure | Formal reprimand |
| Fine | Monetary penalty |
| Probation | Conditional license with restrictions |
| Education | Required additional training |
| Cease and desist | Order to stop specific conduct |
Factors Considered
| 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 |
| Intent | Intentional violations more serious |
Reinstatement
After suspension or revocation:
| Situation | Requirements |
|---|---|
| Suspended license | May apply for reinstatement after suspension period |
| Revoked license | May apply after period specified by Commission |
| Requirements | May include additional education, examination |
| Discretion | WVREC has discretion to approve or deny |
Reporting Requirements
Licensees Must Report
| Event | When to Report |
|---|---|
| Criminal conviction | Promptly |
| Disciplinary action in another state | Promptly |
| Civil judgment related to RE | As required |
Failure to Report
Failure to report required events is itself a violation that can result in disciplinary action.
Loading diagram...
Test Your Knowledge
Which action is a criminal offense in West Virginia?
A
B
C
D
Test Your Knowledge
What rights does a West Virginia licensee have before WVREC takes disciplinary action?
A
B
C
D
Test Your Knowledge
Which of the following is NOT a disciplinary action WVREC can impose?
A
B
C
D
Test Your Knowledge
What must a licensee report to WVREC promptly?
A
B
C
D
Congratulations!
You've completed this section
Continue exploring other exams