A North Dakota real estate broker, Theresa, is under investigation by the NDREC for alleged misrepresentation. During the investigation, the NDREC subpoenas Theresa's transaction files and trust account records. Theresa's attorney advises her to refuse to produce the records, arguing that they are protected by attorney-client privilege. Which of the following best describes the NDREC's authority in this situation under North Dakota law?
Correct Answer
B) The NDREC has subpoena authority to compel production of licensee records, and the privilege claim must be evaluated by a court if Theresa refuses to comply
Under NDCC § 43-23-04 and general administrative law principles, the NDREC has subpoena authority to compel the production of records relevant to a disciplinary investigation. If Theresa refuses to comply based on a privilege claim, the proper procedure is for the NDREC to seek court enforcement of the subpoena, at which point a court would evaluate whether attorney-client privilege legitimately applies to the specific documents. Business records generally held by a broker are not protected by attorney-client privilege simply because an attorney also possesses them.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
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