Dierenfield

Appellant, Real Estate Commissioner of the State of California (Commissioner) appeals from a judgment in favor of respondent Dennis Dierenfield (Dierenfield) directing payment in the amount of $20,000 from the Recovery Account of the Real Estate Fund. The judgment was made pursuant to Business and Professions Code section 10471. We reverse.

Facts

Joseph M. Stabile (Stabile) was a real estate salesperson licensed under section 10132. A salesperson may act in a professional capacity only during his employment by and on behalf of a licensed real estate broker.

Between late August and October 19, 1981, Stabile was employed in a mortgage brokerage business owned by Donald Lee Obrecht, a licensed broker. During this period Dierenfield invested through Stabile in two loans secured by real property. Both loans were repaid without incident.

On October 19, 1981, Stabile’s employment with Obrecht ended. He did not disclose to Dierenfield that he was no longer employed by a real estate broker.

In late November 1981, while Stabile was not employed by any licensed broker, he arranged for Dierenfield to make two loans secured by real property in the total principal amount of…