Key Takeaways
- DSPS and the Real Estate Examining Board can investigate complaints and impose disciplinary actions
- Violations can result in license denial, suspension, revocation, or fines
- Common violations include misrepresentation, commingling, unlicensed activity, and agency disclosure violations
- Practicing without a license is a violation of Wisconsin law
- Licensees have due process rights including notice and hearing before disciplinary action
Last updated: January 2026
License Law Violations & Discipline
DSPS and the Real Estate Examining Board have authority to investigate complaints and take disciplinary action against licensees who violate Wisconsin real estate law.
Common Violations
Misrepresentation and Fraud
| Violation | Description |
|---|---|
| Material misrepresentation | False statements about important facts |
| Omission | Failing to disclose known material adverse facts |
| Fraud | Intentional deception for personal gain |
| False advertising | Misleading marketing or claims |
Trust Account Violations
| Violation | Description |
|---|---|
| Commingling | Mixing client and broker funds |
| Conversion | Using client funds without authorization |
| Failure to deposit | Not depositing funds within 48 hours |
| Poor records | Inadequate documentation |
Agency and Disclosure Violations
| Violation | Description |
|---|---|
| Agency disclosure violations | Failing to provide required disclosures |
| Undisclosed dual agency | Acting for both parties without consent |
| Breach of fiduciary duty | Violating duties to clients |
| Undisclosed interest | Failing to disclose personal interest |
Unlicensed Activity
| Violation | Description |
|---|---|
| Practicing without license | Performing activities requiring a license |
| Practicing on expired license | Continuing to work after expiration |
| Paying unlicensed persons | Compensating unlicensed individuals for licensed activities |
| Aiding unlicensed practice | Helping others practice without a license |
Warning: Practicing real estate without a license is a violation of Wisconsin law that can result in penalties and criminal prosecution.
Other Violations
| Violation | Description |
|---|---|
| Discrimination | Fair housing violations |
| Incompetence | Lack of knowledge or skill |
| Unprofessional conduct | Actions harming public trust |
| Failure to supervise | Broker fails to supervise salespersons |
Disciplinary Process
Investigation
- Complaint filed with DSPS (or DSPS initiates investigation)
- Investigation conducted by DSPS staff
- Evidence gathered (documents, interviews, audits)
- Determination made whether to proceed
Hearing Process
If DSPS proceeds with disciplinary action:
| Step | Description |
|---|---|
| Notice | Licensee notified of charges |
| Hearing | Formal hearing before Board or hearing examiner |
| Evidence | Both sides present evidence |
| Decision | Written decision issued |
| Appeal | Licensee may appeal to court |
Due Process Rights
Wisconsin licensees have the right to:
- Notice of charges
- Hearing before adverse action
- Representation by attorney
- Present evidence and witnesses
- Cross-examine witnesses
- Appeal unfavorable decisions
Disciplinary Actions
DSPS and the Real Estate Examining Board may impose various sanctions:
| Action | Description |
|---|---|
| Denial | Refuse to issue license |
| Reprimand | Formal warning on record |
| Limitation | Restrict scope of practice |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Fine | Monetary penalty |
| Education | Required additional training |
| Probation | Conditional license with restrictions |
Factors Considered
| Factor | Impact |
|---|---|
| Severity of violation | More serious = harsher penalty |
| Prior disciplinary history | Repeat violations = stricter |
| Harm to consumers | Consumer damage = more serious |
| Cooperation | Cooperation may reduce penalty |
| Remediation | Steps taken to fix the problem |
Grounds for Discipline
Wisconsin Statutes specify grounds for disciplinary action:
| Category | Examples |
|---|---|
| Criminal conduct | Felony or crime related to real estate |
| Professional misconduct | Incompetence, negligence |
| Violation of law | Breaking license law or rules |
| Misrepresentation | False statements on application or to public |
| Financial irresponsibility | Trust account violations |
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Test Your Knowledge
Which agency has authority to discipline real estate licensees in Wisconsin?
A
B
C
D
Test Your Knowledge
Which of the following is NOT a disciplinary action that DSPS can impose?
A
B
C
D
Test Your Knowledge
What rights does a Wisconsin licensee have before DSPS takes disciplinary action?
A
B
C
D
Test Your Knowledge
Which action would be considered a trust account violation in Wisconsin?
A
B
C
D
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