Home » MBJ FEATURE » New law uncovers secrets: 10 to 15 percent of real estate applicants have criminal convictions

New law uncovers secrets: 10 to 15 percent of real estate applicants have criminal convictions

By BECKY GILLETTE 

Starting July 1, regulations went into effect that were passed by the Mississippi Legislature to provide more protections for consumers by requiring real estate agents in Mississippi to have fingerprinting and a background check before being licensed. Mississippi Real Estate Commission Administrator Robert Praytor said background checks are showing about ten to 15 percent of applicants have some type of criminal conviction not disclosed on the application.

One week recently when they processed 127 background checks, 15 weren’t readable and have to be redone. There were 12 applicants who came back with convictions not disclosed.

“We had one convicted of 11 offenses who had been in the penitentiary twice,” Praytor said. “Those are not the type of people you typically want walking around your house or having access to your deed. Without background checks, we wouldn’t have known. They don’t always tell the truth on applications.”

Of the 12, there were a total of 34 convictions for offenses such as driving under the influence, domestic violence, impersonating a police officer, manufacture of a controlled substance and sale of a control substance. Some were felonies and some were misdemeanors.

A felony conviction is grounds for refusal to issue a real estate license.

Praytor said the number one reason given for not including the offenses on their application was, “I forgot.” The second most common response was that it happened a good while ago, and the applicant thought it was expunged.

“One guy insists it never happened, but it is his name, his fingerprints and his Social Security number,” Praytor said.

Fingerprints are forwarded to the Mississippi Department of Public Safety and the Federal Bureau of Investigation Identification Division to check against criminal history databases.

“An applicant found by the commission to possess a background which calls into question the applicant’s ability to maintain public trust shall not be issued a real estate license,” the bill said.

Praytor said the process is working very well, and fulfilling the intention of improving safety for the public.

“I think it is going to work out exceptionally well for members of the public to know that the real estate agents who are going into houses when the owners are not there or agents who have deeds to their houses are not convicted felons,” Praytor said.

In addition to a felony, other grounds for denial of a permit are if the person has lost any professional licenses in any state in the past five years.

Praytor said the Mississippi Real Estate Commission supported the legislation proposed by the Mississippi Association of Realtors. Praytor said all of the surrounding states were doing background checks. And throughout the nation, it was being found that people with all types of felonies were being able to get real estate licenses.

“They have access immediately through the MLS to thousands of individuals’ homes,” Praytor said. “MAR came to Mississippi Real Estate Commission and asked for our support of that particular bill. The Mississippi Real Estate Commissioners agreed such a bill was necessary and would help the general public. It has increased our paperwork, but we are taking care of that now. In the next legislative session, we are asking the legislature to allocate one person to do this full-time. We either need to have another person or get someone on a contractual basis to do it in-house.”

The commission is also in the process of getting scanners at the office and electronic fingerprint machines in case someone wants to come by the office and have fingerprints done electronically.

Praytor said they average about 450 renewals per month. Licenses must be renewed every two years.

Wednesday morning, Praytor added: “With all of the presidential election news you may have missed this news flash about a real estate licensee in South Carolina who did not have to pass a background check but has been arrested for kidnapping, multiple murders, and various other crimes.  He was also the Principal Broker of a real estate firm and was awarded a Five-Star rating by his clients.”

MAR brought the legislation forward to raise the bar professionally for the members of the profession, said Ron Farris, Farris Law Group, Madison, who is general counsel to the MAR and acted as the organization’s lobbyist for that particularly legislation. Farris said MAR members supported the legislation to self-impose a higher standard on themselves as members of a profession that regularly puts them in a position of being in people’s homes.

“The deal was written with the public in mind to afford even more protection on a professional level,” Farris said. “This mirrored the laws already applicable to real estate appraisers, who are also regulated by the Mississippi Real Estate Commission. When you look at the law, you will see this background check is provided in confidence to the Real Estate Commission that is charged with protecting the public trust. Anything revealed by the background check will be considered by the commission.”

The background check is just part of an overall application process. The Mississippi Real Estate Commission uses it along with a lot of other information such as completion of continuing education requirements to determine whether to grant a real estate license.

Applications can be denied if the applicant “has failed to demonstrate character and general fitness such as to command the confidence of the community and to warrant a determination that the real estate broker or salesperson will operate honestly, fairly and efficiently within the purpose of these criteria.”

The commission may also upon receiving a verified complaint in writing hold a hearing for the refusal of license or for the suspension or revocation of a license previously issued. Grounds for refusing a license include making any substantial misrepresentation in connection with a real estate transaction; making any false promises of a character likely to influence, persuade or induce; pursuing a continued and flagrant course of misrepresentation or making false promises through agents or salespersons or any medium of advertising or otherwise; any misleading or untruthful advertising; acting for more than one party in a transaction or receiving compensation from more than one party in a transaction, or both, without the knowledge of all parties for whom he acts; and failing, within a reasonable time, to account for or to remit any monies coming into his possession which belong to others, or commingling of monies belonging to others with his own funds.

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About Becky Gillette

One comment

  1. When I first started working on Wall Street in the ’80s, the brokerage firms always required fingerprinting and urinalysis–sometimes even a lie detector test. (above the lie detector at Smith Barney was a picture of John Houseman saying “We make money the old fashioned way…we earn it.”)

    One of my bosses told me that about that same percentage–15%–of potential brokers had criminal records. Some did things like steal mink coats; it was hilarious.

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