"Bad facts make bad law", they say, and the recent case of Robbins v. Davi, heard by California's Second Appellate District Court of Appeal, drives that point home for real estate licensees.

Did I say the facts were bad? Try this: Real estate broker and attorney, Lance Robbins, both owned and managed numerous "slumlord" apartments in the city of Los Angeles. This, as acknowledged by Robbins's attorney, was an extremely lucrative business. The record suggests, though, that Robbins took less than adequate care of the apartments under his control. Between 1985 and 1995, Robbins had been convicted of some 50 municipal building code violations. He was twice disciplined (1991 and 1994) by the State Bar for "facts and circumstances surrounding habitability violations in properties" that he owned.

In January of 2001, Robbins pleaded nolo contendere and was convicted of three misdemeanor violations of the fire protection and prevention provisions of the Los Angeles Municipal Code. He was fined $100 and placed on summary probation for 18 months. In March of 2003 the Department of Real Estate filed an accusation alleging that Robbins's convictions constituted cause for the suspension or revocation of his license as a broker.

The original charges involved issues of moral turpitude, but subsequent rulings have effectively removed that as a cause of action. Nonetheless, charges remained based on the claim that Robbins's crimes were "substantially related to the qualifications, functions or duties of a real estate licensee."

According to California law, if a crime is so related to a licensee's qualifications, functions, or duties, the license may be revoked. But, "licensing authorities do not have unfettered discretion to determine whether a given conviction is substantially related to the relevant professional qualifications." The authorities are required to develop criteria to aid them in making that determination.

The Department of Real Estate has developed such criteria in a manner that many think is distressingly broad. Namely, a crime shall be considered substantially related "…if it involves…doing of any unlawful act with the intent of conferring a financial or economic benefit upon the perpetrator…" Presumably, then, for example, an attempt to fix a horse race, or a high school basketball game, might be considered "a crime substantially related to the qualifications, functions or duties of a real estate licensee."

Because Robbins's violations were related to a profit motive, the court agreed that they fit the criteria for license revocation. This is a result that many concerned licensees think is too broad. Any illegal act aimed at making a profit will fit the definition. It need not have anything to do with the profession in question. Presumably, failing to pay a traffic fine might result in a license revocation. That seems excessive.

While many concerned real estate professionals were inclined to protest the court's decision, those sentiments were overcome by the egregiousness of Robbins's actions. Who would want to appear to be on his side? Regrettably, this is the way that bad law sometimes gets made.

Published: January 19, 2010

Use of this article without permission is a violation of federal copyright laws.

Bob Hunt is a director of the National Association of Realtors and is author of the recently published book, "Real Estate the Ethical Way." A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at .