Violations, Penalties & the Complaint Process

This area follows a complaint from start to finish and asks what can happen to a licensee along the way. Keep two tracks apart. Administrative discipline is imposed by FREC against the license. Criminal penalties are imposed by a court for violations of s. 475.42. The Recovery Fund is a third track, built to repay injured consumers.

The complaint process in seven steps

1. Complaint. DBPR investigates a complaint that is in writing, signed and legally sufficient, meaning it alleges facts showing a violation. An anonymous complaint may also be investigated if it is written, legally sufficient and substantial, and a preliminary inquiry suggests it is true.
2. Investigation. The licensee receives a copy of the complaint and may respond in writing within 20 days.
3. Probable cause. A probable cause panel reviews the investigative report and decides within 30 days. Instead of finding probable cause it may issue a letter of guidance. The licensee's broker is notified 10 days after probable cause is found.
4. Formal complaint. If probable cause exists, the department files a formal (administrative) complaint and prosecutes it under Chapter 120.
5. Hearing. If material facts are disputed, a formal hearing is held before an administrative law judge of the Division of Administrative Hearings, who issues a recommended order. Without disputed facts, an informal hearing may be used; if a party raises a factual dispute there, it converts to a formal hearing.
6. Final order. FREC issues the final order. Panel members who reviewed the case are excused from that vote.
7. Appeal. A final order may be reviewed by the courts.

An administrative complaint must be filed within 5 years of the act, or of when it was or should have been discovered.

Grounds for denial, suspension and revocation

• Denial: an applicant whose conduct would have justified discipline can be found unqualified. DBPR may not license anyone under investigation elsewhere for conduct that would be a violation here.
• Common discipline grounds (s. 475.25): fraud, misrepresentation, concealment or breach of trust; failure to account for or deliver escrowed property; false or misleading advertising; a crime involving moral turpitude or relating to real estate, even with adjudication withheld; failing to report a felony plea or conviction within 30 days; and a listing without a definite expiration date or not delivered within 24 hours.
• Incapacity: a suspension for drunkenness, drugs or temporary mental derangement lasts only as long as the incapacity.

Types of penalties

FREC may deny, reprimand, fine up to $5,000 per count, place on probation, suspend for up to 10 years, or revoke, alone or in combination. The disciplinary guidelines rank penalties from lowest to highest: letter of concern, reprimand, fine, probation, suspension, and revocation or denial. Revoking or suspending a broker's license makes every sales associate registered under that broker involuntarily inactive until they find new employment.

Criminal penalties: operating without a valid, current, active license is a third-degree felony. Most other violations of s. 475.42(1) are second-degree misdemeanors.

The Real Estate Recovery Fund

• It reimburses a person who holds a Florida civil judgment for damages caused by an active licensee acting as a licensee in a brokerage transaction, and who cannot collect.
• Limits: $50,000 per transaction, no matter how many claimants, and $150,000 total for any one licensee.
• The claim must be made within 2 years of the act (or its discovery), and never more than 4 years after the act.
• When the fund pays, the licensee's license is automatically suspended until the amount is repaid in full, plus interest.
• It is funded by $1.50 a year on sales associate licenses, $3.50 a year on broker licenses, and all fines FREC collects.

Legal terms to know

Legally sufficient

A complaint containing ultimate facts showing a violation occurred.

Probable cause

The panel's finding that the case should proceed to a formal complaint.

Recommended order

The administrative law judge's proposed decision after a formal hearing.

Final order

FREC's decision in the case; it is final agency action.

Nolo contendere

A no-contest plea; it counts under s. 475.25(1)(f) regardless of adjudication.

Where this shows up on the exam

Violations of License Law, Penalties and Procedures is 3% of the exam in the DBPR booklet (January 2025), about three questions. Know the seven steps in order, the $5,000/10-year limits, and the $50,000/$150,000 Recovery Fund caps.

Sources

North Carolina law as published by the General Assembly and the Office of Administrative Hearings, checked 2026-11-05:

• s. 455.225, F.S.
• s. 475.181, F.S.
• s. 475.25, F.S.
• s. 475.31, F.S.
• s. 475.42, F.S.
• ss. 475.482-475.484, F.S.
• Rule 61J2-24.001, F.A.C.
• Rule 61J2-24.002, F.A.C.
• Rule 61J2-24.003, F.A.C.
• DBPR Sales Associate Candidate Information Booklet (Jan 2025)