D.O.L. Compliance – Understanding the

System

Samuel M. MeylerMeyler Legal, PLLC8201 164th Ave. N.E., Suite 200Redmond, WA 98052425-881-3680samuel@meylerlegal.com

D.O.L.?!?!?!COMPLAINT?!?!AUDIT?!?!?!

Course Objectives» Understanding the structure of the DOL.» Understanding DOL Procedure for handling and

investigating complaints.» Recognize common issues that result in

disciplinary action.» Understanding what sanctions are.

D.O.L. Organizational Chart

Pat Kohler

Business and Professions Division -Real Estate, Appraisers, Timeshares, Camp

Resorts and Home Inspectors Section

Jerry McDonaldAdministrator

70019373

Sally AdamsAdmin Asst 3

70019755

Terry Rodgers WMS

Assistant Administrator 70019228

Department of LicensingBusiness and Professions Division

Real Estate, Appraisers, Timeshares, Camp Resorts andHome Inspectors Section

February 2014

Real Estate EducationHome Inspectors

Timeshare/Camp Resorts Appraisers Regulatory & Compliance

Vacant UFCust Svc Spec 2Home Inspectors

John GuthrieLic. Svcs. Mgr. 1

70019397

VacantCust Svc Spec 2

71009633

Rhonda MyersWMS Mgr.70018891

Dolores CasitasProf. Lic. Mgr. 2

70019781

Georgia SchmidtCust Svc Spec 2

70019440

Art AbrahamsonWMS Invest. Mgr.

70019521

David PierceInvestigator 3

70019711

VacantInvestigator 3

70018913

Michelle YotterInvestigator 3

70018905

Mary PorterInvestigator 3

70019721

Shannon TaylorInvestigator 3

70019420

Robin Jones Investigator 3

70019652

Bill DutraInvestigator 4

70087401

Bruce SlocumInvestigator 3

71010825

Vincent LesterInvestigator 3

71010826

V. Daniels Johnson Investigator 3

70019713

Vacant UF Investigator 3Home Inspector

Brittany GilmanCust Svc Spec 2

70018821

Debbie WrightProf. Lic. Mgr. 2

70019375

Dorothy PlunkettMgmt Analyst 2

70018734

Anthony PorterCust Svc Spec 2

70019234

Michael LeonardCust Svc Spec 2

70018738

Jill KelleyCust Svc Spec 2

70018917

Mary ChavezCust Svc Spec 2

70018764

Lindsey VanderlugtCust Svc Spec 2

70018914

Stacie EdwardsCust Svc Spec 2

70018761

Lynell McKnightProf. Lic. Mgr. 1

70019719

Lona PriceCust Svc Spec 2

70019720

Karen JarvisWMS Prog.Mgr.

70019417

Nathaniel MooreCust Svc Spec 2

71024595

Trena BradleyBPD Auditor 3

70019715

VacantBPD Auditor 3 UF 70018892

Doug PetersonBPD Auditor 3

70018906

Sunny WongBPD Auditor 3

70018894

VacantBPD Auditor 3

71010925

Patrick RusherBPD Auditor 3

70018889

Sandra HowardBPD Auditor 3

70018655

Cathleen McDonaldBPD Auditor 3

71010926

Jung Young KimBPD Auditor 3

70018890

Melicent KiserBPD Auditor 4

71014405

Angela HineAdmin Asst 3

70019316

Audit / Investigations

Doug GibbProf. Lic. Mgr. 1

70019237

Ryan GrimesProf. Lic. Mgr. 2

70087409

Julie HamiltonProf. Lic. Mgr. 1

70018805

Licensing / Customer Service

Dee SharpWMS Prog. Mgr.

70018762

Tambra McCowan

Prof. Lic. Mgr 170018928

Jennifer LingleCust Svc Spec 2

70018760

VacantMgmt Analyst 2

70018818

VacantAdmin Asst 3

71031450

Regulatory & Compliance and Audits/Investigations

COMPLAINTS» In order to investigate a complaint it must fall

under the jurisdiction of the Real Estate Unit of the Department of Licensing.

» Must be a violation of License Law or the Law of Agency.

» Approx. 60% of complaints are closed before investigation.

» Unlicensed Activity » Misrepresentation » Deal Honestly and In Good Faith » Exercise Reasonable Care and Skill » First Applicant/ Conviction» Civil » Failure to Respond to the Department » Property Management Agreements » Advertising without Company Name » Trust Account Prop Mgmt., Sales, General.» Ethics » Conversion » Statements/ Negligence » Fraudulent/Dishonest Dealing » Incompetency

COMPLAINTS

Regulatory & Compliance and Audits/Investigations

DART CHECKLIST» LICENSE HISTORY » HISTORY OF PREVIOUS VIOLATIONS; INCLUDING WHEN AND RELATIONSHIP TO

CURRENT ALLEGATIONS » HARM AND SEVERITY OF HARM TO CONSUMERS OR OTHERS » NATURE, EXTENT, AND TIME FRAMES OF THE ACTS » HOW VIOLATION WAS SOLVED AND/OR CORRECTED » EVIDENCE OF DUE DILIGENCE ON THE PART OF THE LICENSEE » LEVEL OF SUPERVISION INVOLVED FROM MANAGING OR DESIGNATED

BROKER(S) » LICENSEE INTENTION, ACCOUNTABILITY AND ACKNOWLEDGEMENT » PERSONAL GAIN OR BENEFITS OBTAINED BY LICENSEE OR OTHERS INVOLVED » COOPERATION BY RESPONDENT » CRIMINAL OR CIVIL JUDGMENTS/CONVICTIONS » MONETARY JUDGMENTS » OTHER MITIGATING CIRCUMSTANCES » OTHER AGGRAVATING CIRCUMSTANCES

Statement of Charges» What is it?

˃ Statement regarding jurisdiction and venue˃ License History˃ Statement of Charges (Allegations)˃ Request for Sanctions

» Matters subject to B.A.P.˃ Disciplinary Action to be taken˃ Reasons for disciplinary action˃ How to dispute˃ What happens if you don’t dispute

Statement of Charges Final

Order Agreed Order Dismissal

SOC Cease & Desist

51

42

29

31

104

44

2826

1

2012 2013

Compliance Statistics

THE NUMBERS

Complaints Received Complaints

Closed by Program

Complaints Referred to

InvestigationsComplaints Referred to

AuditsComplaints Referred to Compliance

668

335297

10 14

637

275 323

93

639

309302

280

2013 2012 2011

Regulatory & Compliance Statistics

Cases Received from Intake

Investigations Closed / No Action

Investigations sent to Legal

Investigations Completed

Letters of Education Issued

343

267

41

318

27

76

63

29

77

17

10

6

4

1

17

7

1

4

2

6

3

7

Timeshares/ Camp Resorts

Home Inspec-tors

Appraisal Mgmt Companies

Appraisers

Real Estate

448 74349 410 45

2013 Statistics for Investigations & Compliance

AUDITSWAC 308-124I-050Audits.

(1) Real estate firms are subject to routine audits. Routine audits are scheduled approximately every three years.

(2) Audits will be conducted at the location the real estate firm is licensed to conduct real estate brokerage activity or a facility chosen by the department.

(3) All requests for records will be issued by an authorized representative of the director, such as auditors, investigators, program staff or other designee.

(4) An audit can be initiated at any time based upon the results of the previous audit or complaint.(5) Audits are not scheduled, but they are normally done between the hours of 8:00 a.m. and 5:30 p.m.,

Monday through Friday, excluding state holidays. An auditor may not forcibly enter a licensed business location unless accompanied by law enforcement personnel pursuant to a valid search warrant. Licensees are advised that refusal to permit access may result in disciplinary action under chapters 18.85 and 18.235 RCW.

(6) An auditor may appear at a licensed business location, unannounced, during the hours described above. A licensee may be required to produce to the auditor at that time all records the licensee is required to keep by the statutes and rules governing licensees. Licensees are advised that refusal to permit access may result in disciplinary action under chapters 18.85 and 18.235 RCW.

(7) The department may not charge for the cost of routine audits to the licensee. Audit costs may be charged to the licensee pursuant to RCW 18.235.110(2) when the department has audited pursuant to a complaint, violations have been found, and the director has issued an order imposing any of the sanctions described in RCW 18.235.110(1).

(8) An auditor and licensee may mutually agree to complete or continue an audit outside the time and date limitations.

94

1029

318 337

133228

9

1272

597

214

110

256

11

1042

416330

113

236

5

Real Estate Audits Report

2011 2012 20131,0291,272 1,042Total Audits

COMMON VIOLATIONS»Failure to Maintain Transaction Records»Failure to disclose relationship with service providers»Failure to Retain Records»Failure to Notify office Change of Address»Failure to keep records up to date. »Failure to Perform Monthly Trial Balance»Failure to Identify Client Funds as Trust»Failure to do Business in the Name as Licensed»Failure to keep the Trust Account in Balance»Failure to Deliver Funds within One Banking Day

SANCTIONS» What can they do to you and what are the considerations?» Goal to change licensee behavior. » Repeat or habitual offenders - Propensity to reoffend » Actions that are a high risk of harm to the:

˃ Public ˃ Agency ˃ Staff ˃ Industry ˃ Individuals

» Nexus of actions to the program and their practice to the reason the program exists. » Identify who or what has been or may be harmed.

˃ Public at large ˃ Individual person ˃ Industry integrity ˃ Property ˃ Money

» Identify the nature, extent, and time frames of the violation. » Previous investigations, inspections or audits » Following a consistent process used to determine sanctions. » Consistency within a program and the division. » collateral consequences of our decision or action.

WHAT’S THE SANCTION?» Fact pattern 1» Fact pattern 2» Fact pattern 3» Fact pattern 4

Samuel M. MeylerMeyler Legal, PLLC8201 164th Ave. N.E., Suite 200Redmond, WA 98052425-881-3680samuel@meylerlegal.com