The Department of Real Estate’s Summer 2019 Bulletin warns brokers of the possibility of being investigated at random through what the DRE calls, “Broker Office Surveys,” which appear to be a type of limited audit. See the Bulletin article titled, “What is a Broker Office Survey and How to Prepare for One.”
Selection for a Broker Office Survey does not mean that a brokerage has been reported to the DRE or is suspected of a violation. In fact, the DRE says that brokers are chosen at random from a list of brokers who have no formal disciplinary action against their license. Because a brokerage could be subject to such a limited audit at any time, brokers must remain vigilant and ensure that they are complying with the Real Estate Law.
What is a Broker Office Survey?
A Broker Office Survey consists of a special investigator from the Department’s Enforcement section meeting with a broker, usually at the broker’s main office, to review and ensure that the broker’s operation is in compliance with the Real Estate Law in the following areas: 1) Licensing 2) Trust account/record keeping 3) Required disclosures and 4) Broker supervision.
During the Broker Office Survey, the special investigator will ask the broker a series of questions including but not limited to:
- Basic business information
- Number of broker associates/salespersons retained
- Branch office locations
- Type of licensed activity conducted
- Trust account information and
- Most importantly, their supervision of their brokerage.
In addition, the special investigator will ask to review a minimum of three transaction files. If violations are found, the special investigator will advise the broker of such and that follow-up will be required.
How to Prepare
The DRE specifically recommends that a broker should prepare for a Broker Office Survey by reviewing the following DRE publications:
The manual contains many of the questions that a broker will be asked during a Broker Office Survey. Additionally, the DRE recommends that the checklist should be used in conjunction with the manual.