In March, California officials were cracking down on the illegal activity of those who wanted to sell fake home certificates, and it got a lot of attention.
But what was a very rare, expensive mistake turned into a massive problem, as people started taking advantage of the state’s lax regulations and fraud laws.
The California Real Estate Board (CREB) announced a temporary ban on the practice in the state last week, and the Department of Finance (DF) is now looking into whether the temporary ban could be lifted.
In order to purchase a virtual certificate, users must first visit the Real Estate Council’s website and fill out a few forms, including a rental agreement and a “property description” form.
The rental agreement is a document that states how many bedrooms and bathrooms the property has, and includes a breakdown of the property’s estimated value.
The description is a series of photos and a description of the home’s features.
In California, real estate boards and real estate agents can issue the virtual certificate in a number of different ways, such as through the “Buyer’s Premium” service, which requires the seller to pay a fee to the real estate board.
These services can range from $40 to $200.
When you purchase a certificate, the realtor is essentially buying the property, as the buyer is not the actual owner of the house.
A lot of people who purchased these virtual certificates in California ended up with real estate brokers selling them at inflated prices, and those brokers were later caught using them to illegally resell their homes, according to the California Department of Real Estate and Finance (DREF).
The DREF was looking into a report about a broker who had been running fake virtual certificates and used them to sell houses, and when the broker was arrested, the company that issued the virtual certificates also paid a fine.
The DLEF has not yet released the report, but in a statement, the agency said the investigation was ongoing and that it was aware of the recent report.
“While we do not have the final results, we are continuing to closely monitor the situation, and will review the findings and any potential policy changes if appropriate,” the agency stated.
When the DLEG received a complaint from a real estate broker, it reached out to the CREB, which is a division of the DREB.
The CREB was asked to investigate and issued a temporary suspension on the sales of virtual certificates last week.
The temporary suspension applies to the entire state, and CREB staff members will be visiting virtual certificate sellers in a series over the next two weeks.
The agency has also asked a local real estate association to contact the sellers of virtual certificate listings to inform them of the suspension, and to notify them of potential penalties.
When asked about the suspension by Ars Technic, CREB said that it does not comment on specific investigations.
In a statement to Ars, CREW Executive Director Jim Schlossberg said the agency is continuing to investigate, and that its goal is to protect consumers from the practice of fake virtual certificate sales.
“This suspension will not affect any existing real estate sales that are currently underway, as these actions were taken immediately following a report from the Department on this matter,” he said.
The investigation into the virtual card issue will be the DFLP’s first public investigation into virtual certificate fraud.
The association, the Association of Realty Agents, has issued a statement saying it is “committed to the protection of our members and the integrity of our market.”
“We are cooperating with the Department to ensure the integrity and safety of the real-estate industry and are cooperating in any future investigations,” the statement continued.
A representative for CREB did not immediately respond to Ars’ request for comment.