Criminal Convictions and Licensing and Reporting… Oh My!

One fun part of the PAR Legal Hotline is that the same basic question sometimes comes at you phrased in a few different ways.

One of those basic questions is “What effect will my criminal history have on my real estate license?” Sometimes the caller is a current licensee who has had a recent run-in with the law; sometimes it’s a broker looking to recruit someone to get their license; sometimes it’s a prospective licensee wanting to know what they may be in for once they complete their pre-license courses and apply for the license.

The good news is that we can answer these questions. The better news (for us) is that sometimes the answer is “it depends.”

It Depends

Up until 2020, if someone had asked “What does this conviction mean for my license?,” our only truthful answer would have been, “We have no idea.” There was no written guidance on how the Pennsylvania State Real Estate Commission was to address past convictions and every instance was taken completely on a case-by-case basis. In 2020, Gov. Tom Wolf signed into law Act 53 of 2020. Act 53 changed how criminal history would come into play with a professional license. It required each board and commission to develop and publish a schedule of criminal offenses that may constitute grounds to deny, suspend or revoke a license. The intention for these lists is to be “directly related” to the occupation. It also created the ability for a preliminary determination, as discussed below. So while we still can’t tell you if any specific conviction would affect your license, at least there are now established procedures and standards for the commission to use when they review your case.

Current Licensees

If you currently have a license, Act 6 of 2018 states that you are required to report within 30 days of the following: 1) a disciplinary action taken by a licensing agency of another jurisdiction and 2) “a finding or verdict of guilt, an admission of guilt, a plea of nolo contendere, probation without verdict, disposition in lieu of trial or an accelerated rehabilitative disposition of any felony or misdemeanor offense” (Act 6 of 2018 Notice). In order to report a disciplinary action or criminal matter, you will log into Pennsylvania Licensing System (PALS), click on the headline “licensing services” and select “mandatory reporting by licensees.”

The Pennsylvania State Real Estate Commission has issued a schedule of criminal convictions that may constitute grounds to refuse to issue, suspend or revoke a license, certificate, registration or permit. If you face a criminal conviction, it is best to review this schedule and also discuss with your attorney what the ramifications could be on your license.

Potential Licensees

Luckily, the state has broadened the available resources for potential licensees. The state has issued a Best Practices Guide, which also includes a two-stage analysis. First, a potential licensee should review the schedule of criminal convictions as referenced above. These lists are fairly specific per type of license, so it is important to review all relevant documents. This also includes information on Act 53 of 2020. Second, the individual should perform an individualized assessment with a number of factors to determine whether granting the individual a license would pose substantial health/safety risks or further convictions.

Additionally, the state has started a procedure called a preliminary determination. Preliminary determinations are for individuals to see whether a particular conviction will be a bar to licensure. The key here is to find out prior to doing training, prior to investing time, money and energy. This is not a guarantee or a promise that binds the state for issuing the license, but it can give a general idea on whether the license would be likely to be issued. This is a completely optional step in the licensing process, but can provide some additional guidance for potential licensees and should be strongly considered based on the specific scenario.

Overall, a criminal conviction is not a bar to licensing, but it is key for all licensees/potential licensees to be aware of the requirements so they can proceed properly. Utilizing the vast resources can be key in order to enter into the process fully educated on what the requirements are.