STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1502

)

THOMAS A. THAYER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, at 1:00

1. on November 5, 1975, at the offices of the Real Estate Commission in the Las Olas Building, 305 South Andrews Avenue, Fort Lauderdale, Florida.

   
   

   APPEARANCES:

   
   

   For Petitioner: Mr. Louis B. Guttman

   2699 Lee Road

   Winter Park, Florida 32789

   
   

   For Respondent: Mr. James F. Spindler, Jr. and

   Mr. James R. Eddy

   EDDY AND SPINDLER, P.A.

   700 East Atlantic Boulevard, Suite 201 Pompano Beach, Florida 33060

   
   

   ISSUE

   
   

   By an information filed by the Florida Real Estate Commission, respondent Thomas F. Thayer was charged with fraud, dishonest dealing and breach of trust in a business transaction in violation of Florida Statutes s.475.25(1)(a). In essence, the information charges that respondent, as the real estate broker for the Jacobs and in order to obtain a ninety percent loan commitment for the Jacobs, falsely represented to a mortgage corporation that the Jacobs Intended to move into the duplex they planned to purchase and sell their present home.

   
   

   FINDINGS OF FACT

   
   

   1. At all relevant times to this proceeding, respondent was a registered real estate broker. Respondent had been an acquaintance of Mr. and Mrs. Richard Jacobs for a period of four to five years. Some two years before the transaction in question, Jacobs had expressed to respondent his desire to purchase property containing a duplex for purposes of a tax shelter. Mr. Jacobs testified that he intended the purchase to be an Investment somewhere in the neighborhood of $5,000.00. There was also evidence that Mr. Jacobs understood that there were tax shelter benefits from living in half the duplex and depreciating the other half.

   2. In April of 1974, respondent showed the Jacobs a duplex. At the time, the Jacobs were living in a two bedroom, two bath waterfront home with a swimming pool, valued somewhere in the neighborhood of $60,000.00. The location of the duplex was in a lower rent neighborhood near some railroad tracks. However, the front portion contained three bedrooms, two baths, a thick shag carpet and a built-in bar. There were also two large screened-in patios. The Jacobs were impressed with the duplex, and on April 19, 1974, they signed a deposit receipt contract prepared by respondent to purchase the duplex for

      $41,000.00. This contract was subject to the Jacobs being able to obtain ninety percent financing at 9.25 percent annual Interest within fifteen days from the date of acceptance by the sellers. The contract also contained certain conditions regarding inspection of the rear apartment; electrical, plumbing, roofing and appliance defects; termite damage and the inclusion of a metal storage shed. Such conditions were included in the contract at the request of Mr. Jacobs.

      
      

   3. In order to obtain ninety percent financing, it was necessary that the lender be assured that the borrower actually intends to reside on the mortgaged property. This assurance comes about through either an affidavit executed by the borrower at the time of closing and/or the filing with the lender of a sales listing on the present home of the borrower.

      
      

   4. From this point forward, disputes in the testimony arise. Respondent testified that Mr. Jacobs was aware of the financing requirement that he would have to indicate an intent to sell his present home. Jacobs acknowledged that he was so aware, but testified that he never had any intent to move from his waterfront home to the duplex, and so informed respondent. However, when he went in to make the loan application with the mortgage company, he told its representative that he would be living in the duplex. Respondent then informed the mortgage company that he would be sending them a multiple listing form on the Jacobs' present residence. Jacobs stated at the hearing that he and his wife never intended to reside in the duplex and that he followed respondent's advice regarding the filing of a multiple listing only because he had faith and trust in respondent, who told him such things were done all the time.

      Respondent testified that the Jacobs never informed him that they did not intend to live in the duplex or that they did not intend to sell their present home.

      In fact, there was testimony from Mr. Jacobs that between the time of the deposit receipt contract and the first letter approving the mortgage loan commitment, he and his wife were looking at other homes on the water in which to live. The multiple listing form was signed by the Jacobs and delivered to the mortgage company by respondent, but it was never turned in to the multiple listing service.

      
      

   5. Sometime subsequent to receiving the mortgage loan commitment on May 29, 1974, Jacobs inspected the rear apartment of the duplex and became very upset and disgusted with its condition. Repairs were estimated at $1,000.00 and the sellers only offered to contribute approximately $75.00 toward such repairs. Jacobs then went to an attorney who advised him that it would be illegal to continue with the purchase because of the misrepresentation as to the Jacobs' intent to reside in the duplex. Jacobs then called the mortgage company and told them he did not intend to live in the duplex. Thereafter the mortgage company informed Jacobs that they were unable to obtain a mortgage commitment. Respondent testified that he first became aware that the Jacobs did not intend to live in the duplex the night after Jacobs inspected the rear apartment and spoke with his attorney.

   6. In summary, the testimony in this case is conflicting with respect to respondent's knowledge of the Jacobs' intent as to where they would actually reside. In order for respondent to be found guilty of fraud, dishonest dealing and breach of trust in a business transaction, as prohibited by Florida Statutes s 475.25(1)(a), the Real Estate Commission must prove by clear and convincing evidence that respondent actually knew that the Jacobs never intended to reside at the duplex property. That proof is lacking in this case.

      
      

   7. Here, the substance of the matters in dispute are as readily susceptible of proving respondent's innocence as they are susceptible of proving guilt. Jacobs testified that he originally wanted the duplex as an investment which would provide a tax shelter and that he did not intend to live in it.

      Yet, he verbally represented to the mortgage company that he did intend to live in the duplex, signed a multiple listing agreement and actually did look at other homes to live in during the period of time between signing the deposit receipt contract and obtaining knowledge of the original loan commitment. There was no evidence that respondent had any knowledge of or was involved in the Jacobs' search for another home in which to live. Jacobs was willing to go through with the purchase of the duplex until he became aware of the extent of damages to the rear apartment. It was at this time that he Informed the mortgage company that he did not have any intention of living in the duplex or selling their house. And, it was at about this same time, according to respondent, that respondent first learned that the Jacobs did not intend to reside in the duplex.

      
      

   8. There is no clear and convincing evidence in this record that proved that respondent knew that the Jacobs did not plan to live in the duplex at the time respondent forwarded the multiple listing to the mortgage company on April 30, 1974. The most credible evidence tending to show such knowledge on respondent's behalf is the fact that after the multiple listing agreement was signed and delivered to the mortgage company, the house was never actually put up for sale, was not shown to anyone, and the agreement was not filed with the multiple listing service. Yet, this is consistent with the evidence that the Jacobs did not receive word of the loan commitment until after May 29, 1974 (later to be rescinded on July 5, 1974) and the fact that the Jacobs were in the process of looking for yet another home to purchase. It is logical to assume that they were not yet ready to sell their present home with the uncertainties that existed, and this Instructed respondent to delay the selling process.

      
      

   9. In summary, it is concluded that the Real Estate Commission failed in its burden to prove, by clear and convincing evidence, the misconduct charged; to wit: fraud, dishonest dealing and breach of trust in a business transaction. It is therefore

RECOMMENDED that the information charging respondent with a violation of Florida Statute 475.25(1)(a) be dismissed.

Respectfully submitted and entered this 30th day of December, 1975, in Tallahassee, Florida.

DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Louis B. Guttman, III, Esquire Staff Counsel

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

James F. Spindler, Jr., Esquire and James R. Eddy, Esquire

EDDY AND SPINDLER, P. A.

700 East Atlantic Boulevard Pompano Beach, Florida 33060

Docket for Case No: 75-001502

Orders for Case No: 75-001502