A Stake in the Land

by Peter A. Speek

The applicant for license must show affirmatively that he is trustworthy and competent. In the past the state took no pains to find this out. The licensing board operates as a poor man's court of redress in transactions arising out of the land business. In the past the purchaser's remedy was a more or less satisfactory suit at law.

The licensing board can make investigations and hold hearings on its own motion. In the past the initiative had to be taken by the party claiming deception.

Last year the board granted licenses to 4,600 brokers and salesmen, denied 20 applications, revoked 2 licenses, and has at present 60 hearings pending on applications for licenses in 1921.

The Wisconsin license law does not reach the owner who has worthless land to unload upon an unsophisticated purchaser. Besides this, the law has other limitations. But nevertheless it is a step ahead.

Pennsylvania, the Southern states, and cities in many parts of the country have required a license fee or an occupation tax from real-estate men, but such laws do not regulate, because, as the above-mentioned report states, "no matter how high the fee, the usual run of licensing or prosecuting official will not use his authority to establish moral standards." Furthermore, "in New York and most Northern and Western states, even the slight check of the occupation tax is absent and there is no formality to be observed in entering our profession by any person, no matter how unreliable, irresponsible, or incapable, and whatever his record."

After agitation covering a period of twelve years, the real-estate brokers of California succeeded in 1917 in having enacted a law for the regulation of real-estate brokerage. In 1918 this law was declared unconstitutional by the Supreme Court, on the ground that insurance men were exempted by the wording of the act and that such exemption made the law discriminatory.

The Real Estate Commissioner of the state gives the following synopsis of the law:

The act "provides for the issuance of licenses to two classes of persons—the broker himself, who, in addition to taking out a license, is required to put up a bond running to the state of California, and the salesman, who is defined as one in the employ of a licensed broker and ... is not required to put up a bond." The act is administered by a Real Estate Commissioner appointed by the Governor. Upon petition to the Real Estate Commissioner appointed by those aggrieved in their dealings with brokers or salesmen, a hearing is provided before the commissioner, and upon proper showing the petitioner may be granted the privilege of suing the broker on his bond.... There is also a provision for the filing of complaints against brokers and salesmen concerning their conduct and, upon investigation, if found guilty, the commissioner is empowered to revoke their licenses. The law provides a heavy penalty for a broker—a fine of $2,000 or a prison sentence of two years—and in the case of corporations, a maximum fine of $5,000. The fees for licenses are, for brokers, $10 per annum, and for salesmen, $2 per annum.

The operation of the law appears to have been extremely successful and to have been heartily indorsed by the public generally and by all the reliable real-estate dealers and salesmen in the state. The Real Estate Commissioner gives the following picture of the results of the law during the eight months it was in force:

1. It gave the realtors faith in each other, each being under bond and licensed by the commissioner with power of revocation in case of violation of the law.