Clients' trust funds must be kept in proper trust/clients' accounts, separate from broker operating funds.
Before you read
Test yourself first: 5 questions
Question 1 of 5
If an Oregon licensee violates license law, which body has authority to discipline the licensee, including suspending or revoking the license?
Answer: A. The Oregon Real Estate Agency has the authority to investigate complaints and impose discipline, including license suspension or revocation, civil penalties, or other sanctions, for violations of Oregon license law.
Question 2 of 5
A principal broker uses earnest money held in trust to pay the firm's office rent, intending to repay it later. Under Oregon law this is best described as:
Answer: B. Using trust funds for the broker's own purposes is conversion, treating others' money as one's own. Intent to repay does not cure it; conversion is a serious offense subject to discipline.
Question 3 of 5
When the Oregon Real Estate Agency receives a complaint that a licensee may have violated license law, what authority does it have?
Answer: B. The Agency has statutory authority to investigate alleged violations, compel the production of records, and conduct administrative (contested-case) hearings. Based on findings, it may impose discipline such as fines, license suspension, or revocation. It does not need a prior court order to investigate.
Question 4 of 5
Which agency is responsible for administering Oregon's real estate license law and taking disciplinary action against licensees who violate it?
Answer: A. The Oregon Real Estate Agency (OREA), headed by the Real Estate Commissioner, administers the license law and is the body that investigates complaints and imposes discipline such as suspension or revocation.
Question 5 of 5
Which of the following actions by an Oregon licensee would most clearly constitute prohibited conduct subject to discipline?
Answer: B. Substantial misrepresentation and false promises made to induce a transaction are classic prohibited acts. The other choices describe proper, lawful licensee behavior.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- OREA may investigate complaints and discipline licensees for violations of Oregon real estate law and rules.
- Sanctions include reprimand, license suspension, revocation, refusal to renew, and civil penalties.
- Common grounds: fraud, misrepresentation, commingling/conversion of client funds, and unlicensed activity.
- Disciplinary action follows a contested-case process under Oregon's administrative procedures, with hearing rights.
- Clients' trust funds must be kept in proper trust/clients' accounts, separate from broker operating funds.
- Oregon does NOT maintain a real estate recovery or guaranty fund to reimburse defrauded consumers.
- Without a recovery fund, harmed parties pursue civil court remedies against the licensee directly.
- Serious or criminal conduct can be referred for prosecution in addition to agency discipline.
Oregon License Discipline, Penalties & Recovery Fund: FAQs
Is Oregon License Discipline, Penalties & Recovery Fund on the real estate exam?
Yes. State License Law is a scored domain on the Oregon real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Oregon test this differently?
Oregon applies its own license law on top of the national portion. This page covers the Oregon rules specifically, which is what the state section of your exam tests.
