Senate committee advances bill changing notice, proof and timelines for real estate license actions

A state Senate committee voted to advance Senate Bill 2423 on a voice vote after a presentation from Sen. England and brief questions from committee members.

The bill would require the licensing commission to notify licensees at least five business days before any change in their license status, change the burden of proof in disciplinary hearings from a preponderance of the evidence to clear and convincing evidence, and set timing requirements for complaint handling: the commission would have 120 days after a licensee is notified of a complaint to dismiss it or issue a formal complaint and would be required to render a final decision within one year after a complaint is filed, unless the licensee requests an administrative hearing with the Attorney General’s office.

Senator England, the bill’s presenter, summarized the measure in committee. "It really just does three things," he said, and described the notice, proof standard and timelines as the bill’s core elements. England said the five-business-day notice is similar to an existing practice for attorneys and is intended to give licensees timely information about impending actions.

On the proof standard, England said the bill would change disciplinary proceedings so that "the standard of proof is no longer to be the preponderance of the evidence, but it's to clear and convincing evidence." He said many other departments have moved to that higher standard for matters that can take away a person’s livelihood and that courts have tended to treat such proceedings as penal in nature.

Committee members asked clarifying questions. Senator Super asked whether the bill sets a statute of limitations for when a complaint may be filed or only sets time limits for the complaint process after it is initiated; England replied that the bill creates the 120-day and one-year timelines for processing once a complaint is filed and said he would follow up on any filing-time limits not contained in the bill.

Another senator raised whether the change would make it too difficult to revoke a license; England responded that the clear-and-convincing standard is a higher bar than preponderance but lower than the criminal standard of beyond a reasonable doubt and that appellate review tends to treat the standard of proof as important to the result.

The committee approved the bill on a voice vote. The committee record shows a voice "aye" vote with no roll-call tally provided.

If enacted, the bill would alter administrative procedure for real estate license enforcement and appeals but does not itself spell out criminal penalties. The measure also permits an extension of the one-year timeline when a licensee requests an administrative hearing with the Attorney General’s office, a procedural point cited during the presentation.