Director's Corner
You Have Had a Complaint Filed Against You – What Happens Next?
When the Division receives a written complaint about one of our licensed professionals, we are required by law to investigate the activities of the licensee, or a person who is purportedly acting in a licensed capacity. On occasion, we can initiate an investigation on our motion. Complaints that we open on our own motion are significantly outnumbered by the complaints that we receive from consumers. The purpose of this article is to give you some information about how the Division manages the investigative process so that you know what to expect if you become the subject of a complaint.
When we receive a complaint, we conduct a cursory investigation of the complaint to determine whether the allegations are within the jurisdiction of our regulatory programs. If the complaint is outside of our jurisdiction, e.g. “my real estate professional was rude”, the complaint is dismissed with no further action taken. Dismissed complaints are not a matter of public record and are not displayed on the Division’s website or in the licensing database.
If the allegations appear to be within the jurisdiction of one of the Division’s regulatory programs, the complaint is assigned to an investigator. The licensee will receive a letter from the Division explaining that a response to the complaint is required by regulation. We will also provide the licensee with a copy of the complaint. Responses are generally required to be submitted to the Division within 21 days of the licensee being notified of the complaint. If an extension of time is necessary, that needs to be communicated to and approved by the assigned investigator. Depending on the program and the nature of the allegations, the Division may request copies of the transaction files or work files. In some instances, we will request bank records. If there is confusion about what documents the investigator is seeking, the licensee should have a discussion with the investigator so that he or she is clear on what documentation to provide. It is really important that the licensee responds to the complaint and provides the requested documentation. Failure to do either of those actions can result in a disciplinary action being taken against the license. In addition to the written response provided by the licensee, the investigator will conduct interviews of the parties involved and may gather additional documentary evidence as necessary to either prove or disprove the allegations in the complaint. However, the scope of the investigation is not limited to the allegations made by the complaint. The Division does not expect consumers to be experts in the different practice acts. It is fairly standard that during the course of an investigation, the investigator will identify additional, potential violations of the license law.
Once the investigator has completed the complaint investigation, the investigator will prepare a report on the findings. For the sake of time and resources, we generally use letters to succinctly summarize investigations that do not substantiate violations of the license law and result in complaint dismissals. If the investigation does substantiate violations of the license law or corresponding regulations, a narrative report is prepared which is presented to the appropriate regulatory body (e.g. a board, commission or the Director) for a disciplinary decision. Once a disciplinary decision is made, the licensee is provided with a copy of the report and a stipulation. The stipulation memorializes the terms of the disciplinary decision. The licensee may decide to sign the agreement or pursue the matter through the hearing process in front of an Administrative Law Judge. Settlement negotiations are conducted with staff in the Division’s Expedited Settlement Program or the Division’s attorneys at the Office of the Attorney General. A majority of the Division’s disciplinary cases are resolved without the matter going to hearing. Most of the discipline imposed by the boards and commissions within the Division involve remedial education and the payment of a fine, but there are cases that result in the suspension or revocation of the license. The discipline imposed is specific to the facts and circumstances of the case.
Division staff understands that having a complaint filed with us can be scary and the process may be frustrating. The Division strives to complete investigations within eight months. Our goal is to complete thorough and accurate investigations so that we can appropriately protect consumers and maintain a healthy and productive real estate market. With that said, a majority of the complaints that the Division receives result in dismissal because there was either no violation of the license law or insufficient evidence of wrongdoing on the part of the licensee.
Director, Marcia Waters
About the Director
Marcia Waters has been with the Colorado Division of Real Estate since August 2005. Marcia started with the Division as a Criminal Investigator for the Real Estate Commission and was promoted to Chief Investigator in 2006. In 2007, she was promoted to the position of Investigations and Compliance Director. In that capacity, she managed the investigatory and settlement programs for the Division. On October 15, 2010, she was promoted to the position of Division Director. The Division of Real Estate licenses and regulates approximately 50,000 real estate professionals. Ms. Waters serves as the administrator for the Real Estate Commission, the Board of Real Estate Appraisers, the Board of Mortgage Loan Originators, the Conservation Easement Oversight Commission and the HOA Information and Resource Center. Ms. Waters manages the Division’s $6.5 million budget, oversees a staff of approximately 57 full-time employees, and establishes the direction of Division programs based on market and industry trends.