Auditor’s Corner

 

Smell a Crime?  Drop a Dime.

By Emmet R. Wood, Director, Audits and Investigations

 

You may not be the qualifying broker or broker-in-charge of a real estate office or a member of its management team. 

But, as a broker associated with the firm, it is still your responsibility to report to the Real Estate Commission any violations of the Real Estate License Law or Commission rules which you observe and to be alert to certain “red flags” which may suggest a problem with the firm’s trust account. 

 

·         Are landlords calling to complain that they have not received their rents, or their rental checks are always late, or (even worse) that they “bounced”? 

 

·         Are tenants complaining that their security deposits are not being refunded? Or have you seen trust account bank statements lying around the office unopened for days?

 

·         Have you noticed that the person responsible for the office’s trust account doesn’t take vacations or much time off (or the opposite)?

 

·         Have you noticed that the person does not return telephone calls?

 

·         Do you observe in that person an extravagant lifestyle?

 

While there may be logical explanations to some client and customer complaints, if there is a pattern of complaints accompanied by some of the other “red flags” described, it may signal a problem which requires the Commission’s attention.

If so, you are encouraged to consult the Commission’s Legal Services Division or Audits and Investigations Division where a team of highly trained attorneys, auditors, consumer protection and information specialists are available to answer your questions and determine whether further inquiry is needed.

Trust account shortages ultimately injure real estate consumers.  It may be your client whose earnest money deposit, security deposit or rents are not being safeguarded.