Real Estate Regulatory Bodies in California

By Ciprian Morariu Published: November 6, 2023

What Does DRE Stand for in Real Estate?

Definition of DRE

The real estate industry is vast and complex, it comprises numerous roles, responsibilities, divisions, departments, agencies and regulatory associations. 

One such agency is the DRE (short for the Division of Real Estate). You might have come across this term and wondered ‘what does DRE stand for in real estate’?

DRE is a state owned regulatory body established for protecting the rights and interests of home and property owners.

The California Real Estate Department is responsible for protecting the public and private real estate sectors of the state of California. Their mission is to ensure fair, lawful and effective reinforcement of transactions in the real estate industry.

Real Estate Regulatory Bodies in California

Use of DRE in Real Estate

Founded in 1917, DRE or Division of Real Estate, is the state owned and operated regulatory body which defines and enforces real estate laws. 

The foremost use of DRE in Real Estate is to act as the governing body which ensures the best interests of real estate owners, buyers and sellers are protected. 

DRE in real estate achieves this by enforcing strict rules and regulations, and ensuring the licensing properties are up-to-date with the changing times and trends of the real estate industry. 

DRE’s Role in California Real Estate

California Real Estate Department or DRE in California has one primary role to fulfill - to protect the interest of the public in regards to real estate transactions. 

To achieve this objective, DRE has established a specific set of standards and protocols. These standards have also been translated as knowledge and guidelines for aspiring as well as existing real estate professionals. 

Every practicing real estate agent, broker or appraiser in California must meet the minimum qualifying standards as established by the DRE. 

Importance of DRE in Real Estate Transactions

In addition to being the de facto standard for engaging in real estate transactions in California, DRE has another pivotal role to play. 

The California Real estate department is responsible for the resolution of disputes and issues arising due to a real estate transaction. They achieve this goal with the help of a Real Estate’s Complaint Resolution program which answers queries from consumers. 

DRE also works as a facilitator to resolve common issues, such as - 

  • Consumers unable to verify their documents or having trouble finding them
  • Consumers unable to cancel or write off their property loans
  • Consumers requiring assistance on resolving difficulty with a broker or a loan servicer
  • Consumers seeking advice on unsolicited or inappropriate transactions
  • Consumers inquiring about commission rates or demands set up by agents or brokers

Since its inception, DRE has successfully worked to resolve issues and complaints from property owners and buyers.  

Overview of DRE in Real Estate

Introduction to DRE in Real Estate

The Department of Real Estate or DRE was established in 1917 in the state of California as a state owned and operated authority. 

It is the leading standard of ensuring safety, fairness and truthfulness for real estate and its related professions across the industry. 

The DRE’s objective is to protect the rights and welfare of the public of the state from illegal, fraudulent, unregulated and inappropriate actions caused by any real estate professional or firm. 

Here are the six key professions and entities regulated by the DRE: 

  • Real Estate Auction
  • Appraisal Management
  • Community Association
  • Home Inspection
  • Real Estate Brokerage

Functions and Responsibilities of DRE

DRE in real estate is responsible for regulating the real estate industry and its participants, including agents, brokers, appraisers and realtors. 

DRE ensures the highest standards and guidelines are adhered to by licensure, regulations and enforcement of protocols. 

Below are some of the responsibilities of DRE in the interest of consumers: 

  1. Filing and Resolution of Complaints
  2. Verifying Education Credits
  3. Searching and Verifying of all Real Estate license holders
  4. Renewal of Real Estate License
  5. Communication and Publishing

DRE’s Contribution to Consumer Protection

Since its founding, DRE has continued to uphold the rights and welfare of the consumers participating in the real estate industry. 

Be it forming real estate regulations or enforcing licensing guidelines for real estate professionals, DRE is the benchmark standard and the first and final authority in real estate. 

DRE’s Role in the Licensing Process

DRE plays a significant role in the licensing process. Firstly, it is responsible for conducting background checks and verification on all license applicants. 

This way they screen all the applicants for criminal records before their licensure. As part of the background’s investigation of applicants, DRE determines if a crime is substantially relevant to the duties and responsibilities of a real estate professional. 

For applicants with a criminal record, DRE may deny the issuance of license. 

Thus, DRE’s role in the licensing process is to investigate, evaluate, approve or revoke the license of an applicant on the basis of their background verification and criminal history. 

Real Estate Regulatory Bodies California

California Real Estate Department

Definition and Purpose of California Real Estate Department (DRE)

The California Real Estate department is responsible for safeguarding the rights of the public of California through the enforcement of rules and regulations. 

DRE has the authority to investigate and evaluate the licensee applicants. On the basis of their background check and criminal history, DRE can grant or revoke a real estate license. 

Simply put, the DRE has a singular objective to protect, serve, and promote the public interest of the citizens in the real estate industry of the state of California

History and Evolution of DRE in California

Founded in 1917, the Department of Real Estate in California was established as a state owned agency representing the best interests of the public in the matters of real estate. 

It was the DRE which formulated the first ever real estate law in the country. 

In 2013, DRE was merged with the California Department of Consumer Affairs, and the new entity was named the Bureau of Real Estate. 

In 2018, after passing of a senate bill, the Department of Real Estate in California was made an independent agency again. 

Relationship between DRE and California Real Estate Market

In the state of California, the Department of Real Estate is the governing and regulatory authority. 

DRE is responsible for determining the licensing practices and for overseeing the approval or rejection of real estate licenses. 

The relationship between DRE and California Real Estate market is symbiotic as both are dependent on each other. Any real estate license in the state of California must only be issued by the DRE, therefore, it does more than just keep the real estate industry on track. 

DRE’s direct involvement in the regulating, administrating and protecting of real estate transactions means that it directly controls the workings of the real estate market of California. 

Licensing and Regulation by DRE

When California became the first state in the country to introduce real estate laws in 1917, it became the responsibility of DRE to ensure the laws were enforced statewide. 

Most importantly, DRE was established to administer and regulate the licensing process of real estate professionals. 

Since its inception, DRE continues to operate as a state owned authority in charge of: 

  • Evaluating license applications in the state of California.
  • Investigating the background check and criminal history of license applicants.
  • Granting, revoking or renewing the license of real estate professionals. 

DRE Licensing Requirements for Real Estate Professionals

To obtain a California department of real estate license, every applicant must meet the minimum licensing requirements established by the DRE. 

Firstly, every applicant must be a legal resident of the state of California or a lawfully admitted alien. The minimum age of the applicant must be at least 18 years or older. 

Secondly, an applicant must submit their fingerprints and other related documents for background checks and criminal history verification. Ideally, to obtain a real estate license, an applicant must have no criminal record or any history of felony against their name. 

Thirdly, the DRE in California mandates the completion of 135 hours pre-licensing education. 

It requires that every applicant must take college-level courses before applying for the final exam to prove their competence. The courses and curriculum are also determined by the department.

Applicants are required to score at least 70% in the final exam in order to obtain their California real estate license. 

Examination and Certification Process by DRE

In order to obtain their real estate license in California, individuals must appear for a final course exam. This is applicable for real estate salespeople, agents, brokers, appraisers and realtors. 

After you complete the pre-licensing education from a state approved course provider, the next step is to submit an application form for taking the final exam. 

To do so, you will need to gather all the pre-requisite documents and attach them along with your exam application. Below are the list of the documents to be submitted: 

  • Proof of completion of your pre-licensing education
  • A duly filled live scan service request form with your fingerprints for verification
  • Accommodation request form, if you need accommodation to appear for the exam. 

Once you have all the required documents, you can submit them online using an eLicensing system.

Simply log in to the website and create your user profile, if you haven’t already. Post that, you will need to answer a few basic questions and upload all your documents online. 

DRE License Renewal and Continuing Education

Wondering how to renew your DRE license in California? 

Real estate professionals renewing their license for the first time have to meet specific requirements before submitting their renewal application. 

Here are the steps to be followed: 

Firstly, they must complete a total of 45 hours of continued education from a state approved course provider. 

Out of this, applicants must complete four or five separate courses on topics such as - real estate ethics, agency, trust, fund handling and risk management. 

Secondly, applicants must complete a three hour course on fair housing, a two hour course on implicit bias training and a minimum 18 hours coursework on consumer protection. 

Please note that the continuing education requirements vary according to different real estate professions, and the part of the course hours might be different for brokers, salespersons and officers.