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Real Estate Licensing Issue

 

As Furtado Law PC handles many aspects of property law we recently took on a client with a real estate licensing issue before DORA. This issue may arise when a Public Adjuster is applying for a license when one’s character is at issue. The following blog talks about the issue we are currently handling.

What is good character when applying for licensure in the state of Colorado? Depending on the license you are applying for, it could mean different things. Currently, there is a case before the Office of Administrative Courts regarding the denial of a real estate broker’s license. An applicant had formerly held a mortgage loan originators (MLO) license and a real estate broker’s license, and voluntarily surrendered his MLO license six years ago. The applicant voluntarily surrendered his license after an MLO investigation found some possible violations of Title 12 Art. 61 Sec. 9 of the Colorado Revised Statutes. After six years, the applicant applied for a real estate broker’s license and was denied on character grounds which were based exclusively on findings that precipitated applicant’s surrender of his MLO license. The question is, did the Colorado Real Estate Commission have the authority to make these character determinations.

Unlike the broad authority granted to the MLO board by the legislature under C.R.S. § 12-61-905, there is no extensive statutory list by which the Colorado Real Estate Commission may deny an applicant. Its sole authority in denying applicants appears to be limited to C.R.S.§ 12-61-102 which states in pertinent part”

“No person shall be granted a license until such person establishes compliance with the provisions of this part 1 concerning…truthfulness and honesty and otherwise good moral character; and, in addition to any other requirements of this section, competency to transact the business of a real estate broker in such manner as to safeguard the interest of the public and only after satisfactory proof of such qualifications, together with the application for such license, is filed in the office of the commission. In determining such person’s character, the real estate commission shall be governed by section 24-5-101, C.R.S.” (emphasis added).

When it comes to character determinations, the Real Estate Commission appears to be governed by “24-5-101, C.R.S.” This statute pertains to individuals who have been convicted of felonies or crimes of moral turpitude. It states that such convictions should not in and of itself prevent a person from applying for and receiving licensure. Additionally, the Commission should consider the time between the application and the time of the conviction, and should consider any evidence of rehabilitation and applicant’s good conduct.

In the present case the applicant was not convicted of any felony or crime of moral turpitude. In fact, the Real Estate Commission made no allegations that the applicant had ever been convicted of any crime in its notice of denial. Rather, the Commission’s denial was based solely on violations of rules governing MLO licensees. Violations which were due to financial constraints and inexperience, not any willful or deceptive conduct. Regardless, the applicant was denied even though in the time since their MLO license was surrendered applicant was pursuing higher education in real estate, had run a successful business, was a community advocate, and named multiple professional and personal references that could speak to his character. So the question is, did the Real Estate Commission follow the statutory parameters in making its decision? It is our belief that they did not.

While C.R.S. § 12-61-103(3) states that the Commission is authorized to “require and procure any such proof as is necessary in reference to truthfulness, honesty and good moral character” when read in conjunction with C.R.S. § 12-61-102, this must be limited to those convicted of a felony or other offense involving moral turpitude. If the legislature wished to empower the Commission with the same latitude as the MLO board in denying applicants, it could have done so by enacting legislation similar to that found in Title 12 Art. 61 Sec. 9. In the absence of such latitude, the Commission’s authority to deny applicants should be viewed as more narrow, not more expansive, than that offered to the MLO board. Therefore, as the applicant was never convicted of any crime, the Commission was not permitted to deny applicant on character grounds alone. At the very least the Commission should be required to give applicant the same considerations extended to convicted felons.

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    Dominick Ryals Written by:

    Mr. Ryals is licensed in Colorado and Florida, and has represented clients in both criminal and civil matters throughout the state. Mr. Ryals was admitted to the Florida Bar and worked as a legal editor/researcher in Tallahassee, Florida before relocating to Colorado, where he was admitted to practice before the U.S. District Court for the District of Colorado and the U.S. Tax Court. Mr. Ryals received his undergraduate degree from Florida State University before going on to graduate with honors from Stetson University College of Law in 2010.

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