Defending Complaints Related to Client Representation Before the Missouri Real Estate Commission
Real estate professionals may face discipline by the Missouri Real Estate Commission (“MREC”) for a variety of conduct related to their representation of clients. Missouri law prohibits real estate agents and brokers from making substantial misrepresentations, making false promises, and omitting material facts, in the conduct of their business. § 339.100 RSMo.
Defending against such broad allegations requires a detailed understanding of the industry, related statutes and the caselaw interpreting them. For example, “[a] licensee acting as a seller’s…agent owes no duty or obligation to a customer, except that the licensee shall disclose to any customer all adverse material facts actually known or that should have been known by the licensee.” § 339.730.3 RSMo. And Missouri law specifically defines an “adverse material fact” as “a fact related to the property not reasonably ascertainable or known to a party which negatively affects the value of the property.” § 339.710(1) RSMo. The Administrative Hearing Commission (“AHC”) has also noted that, “[i]n order to constitute an omission of material fact…there must be an intent to deceive….” MREC v. Ely O. James, et al, No. 91-001029RE, 1992 WL 12008892, at *6 (Mo. Admin. Hrg. Comm. July 23, 1992); see also MREC v. Santa Fe Real Estate Corporation and Gary W. Flory, No. 06-1110RE, 2007 WL 2141576, at *8 (Mo. Admin. Hrg. Comm. May 9, 2007).
Similarly, a real estate broker or agent can be disciplined for acting counter to the requirement of good moral character and a good reputation for honesty, integrity, and fair dealing. §§ 339.100.2(16), 339.040.1(1) and 339.040.1(2) RSMo. The AHC has noted that “[g]ood moral character is honesty, fairness, and respect for the law and the rights of others.” MREC v. Vision Realty and Investment Group, Inc. and Wayne Arnold Brown, No. 09-0426RE, 2009 WL 5536827, at *3 (Mo. Admin. Hrg. Comm. Dec. 10, 2009). In addition, the AHC has observed that “[m]ore than one specific act must be shown in order to create a logical inference as to a person’s character.” Louis A. Gillotti v. MREC, No. 07-0860RE, 2008 WL 682227, at *3 (Mo. Admin. Hrg. Comm. Feb. 1, 2008); see also MREC v. Michael Britt, No. 07-1377RE, 2008 WL 2309532, at *5 (Mo. Admin. Hrg. Comm. April 22, 2008). On the other hand, the AHC has stated, “[r]eputation is the consensus view of many people.” Vision Realty, 2009 WL 5536827 at *3 (citations omitted). “Reputation is not a person’s actions; it is ‘the general opinion…held of a person by those in the community in which such person resides.’” Id.
The MREC may also seek discipline of a licensee for “other conduct which constitutes untrustworthy, improper, or fraudulent business dealings, demonstrates bad faith or incompetence, misconduct, or gross negligence.” § 339.100.2(19) RSMo. However, the AHC has concluded this “other conduct” must be “different from that referred to in the remaining subdivisions of § 339.100.2.” MREC v. Billy D. Bray¸ No. 16-3871, 2017 WL 5558378, at *4 (Mo. Admin. Hrg. Comm. Oct. 4, 2017).
Under Missouri law, misconduct is defined as the intentional commission of a wrongful act. Missouri State Bd. of Nursing v. Reynaud, 2010 WL 8043996, No. 10-0696 BN, at *2 (Mo. Admin. Hrg. Comm. Dec. 29, 2010). Misconduct must be “willful in nature,” which is defined as “proceeding from a conscious motion of the will; ... deliberate. Intending the result which actually comes to pass; ... intentional, purposeful; ... done with evil intent, or with bad motive or purpose, or with indifference to the natural consequences, unlawful....” Grace v. Missouri Gaming Comm’n, 51 S.W.3d 891, 900 (Mo. Ct. App. 2001). “[B]ad faith requires a dishonest motive.” MREC v. Michael L. Johnson, No. 97-001881, 1998 WL 34074287, at *3 (Mo. Admin. Hrg. Comm. Jan. 14, 1998). “‘Untrustworthy’ is not ‘worthy of confidence’ or ‘dependable.’” Johnson, 1998 WL 34074287 at *3. “’Improper’ means not in accord with fact, truth, or right procedure.” Id.
Missouri law requires the MREC to prove its allegations in a trial-type hearing before the AHC. Licensees accused of misconduct have the right to review the evidence, cross examine the MREC’s witnesses, testify on their own behalf, introduce evidence, and call witnesses. Procedural and evidentiary rules must be followed and written legal briefs are often required following the hearing.
Real estate agents and brokers who receive complaints related to client representation, including allegations like those discussed above, need an attorney on their side. Dolley Law, LLC counsels real estate professionals as to the best course of action to take, whether that means negotiating a settlement agreement or going to trial. Each case is different and the Firm’s attorney will design a comprehensive legal strategy that fits your needs and gives you the best chance of a successful outcome. Our attorneys have the legal and real estate knowledge necessary to help you successfully resolve a complaint from the MREC.
If you are notified that a complaint about client representation has been made against your Missouri real estate agent or broker’s license, contact Dolley Law, LLC to obtain experienced legal counsel to address the situation by calling (314) 645-4100 or by email at firstname.lastname@example.org.