Restricted License

Probationary License

A restricted real estate license is a type of probationary license that is imposed by the DRE as an administrative action when a complaint is filed against a licensee for violating real estate laws or regulations. In some cases, when settling an accusation or desist and refrain order, the DRE may permit a licensee to continue practicing real estate with certain restrictions on their license. You can refer to BPC §10156.5 and Regulation 2930, as well as DRE’s License Status/Comment Definitions, to learn more about the different types of license statuses.

Different Ways of Restrictions

A license can have restrictions that limit:

  • Its duration
  • The employment to a specific real estate broker, if it’s a salesperson’s license
  • The scope of authorized real estate activities
  • The requirement to obtain a surety bond

In addition, restricted licenses may have certain conditions and limitations. For example, a licensee with a restricted license is typically required to:

  • Complete and pass a continuing education course within nine months
  • Notify DRE by certified mail within 72 hours of an arrest.

No Due Process

A salesperson with a restricted license has the same job responsibilities as a regularly licensed salesperson, but with limited due process rights. In case of any subsequent violation or complaint, the licensee may face suspension or revocation of their license without a hearing. Restricted salespeople must use the Restricted Salesperson Change Application to inform DRE of any changes in their personal information, such as a new sponsoring broker, employment status, personal name, mailing address, telephone number, email address, or activation.

Not Allowed to Renew License

A licensee with a restricted license has no guarantee of license renewal. DRE has the discretion to deny a license renewal application based on the licensee’s past conduct, including any violations committed while practicing real estate. Additionally, if a licensee with a restricted license fails to comply with the conditions and limitations placed on their license, they may be subject to further disciplinary action, including license revocation.

In order to renew their license, a licensee with a restricted license must first file a petition for an unrestricted license. The minimum time period set by the disciplinary action must elapse before such petitions can be filed, which is generally up to two years from the time of the offense, but may vary at the discretion of the DRE. The petitioner must also pay an $800 fee for the petition.

Supervising Restricted Licensees

If a broker has a restricted licensee working under their brokerage, it is their responsibility to review the decision that led to the issuance of the restricted license. Additionally, individuals with restricted licenses must provide an employing broker affidavit signed by their broker indicating that the broker has read the decision and will exercise reasonable supervision over their licensed activities. It is important to note that licensees with a restricted license are not eligible to be appointed as a branch manager.

Each Case is Unique

DRE has the discretion to award a limited license to an individual based on factors such as their personal history and the specific details of their case. For instance, in the case of Marie, who acted as both the buyer’s and seller’s representative in a real estate deal, he neglected to inform the seller of higher offers in order to earn a larger commission. Consequently, DRE decided to revoke her license but also allowed her to apply for a restricted license.