vs. ) CASE NO. 78-2248
Respondent. )
A hearing was held in the above captioned matter, after due notice, at Naples, Florida, on February 14, 1979, before the undersigned Hearing Officer.
For Petitioner: Joseph A. Doherty, Esquire
For Respondent: Ed R. Miller, Esquire
Whether Respondent's license as a registered real estate broker should be suspended or revoked, or the licensee otherwise disciplined for alleged violation of Section 475.25(1)(a), as set forth in the Administrative Complaint, dated November 3, 1978.
Respondent Shirley Holland was registered with Petitioner as a real estate salesman in January, 1976, associated with Vern Duncklee Real Estate and Insurance, Inc., Naples, Florida. He is presently registered as a real estate broker. (Stipulation)
On January 5, 1976, W. H. Ragan gave the Duncklee firm a listing to sell real property consisting of approximately one and one-quarter acres located in Collier County, Florida, for a selling price of $7,500. Respondent was the listing salesman. (Testimony of Respondent, Ragan, Duncklee, Petitioner's Exhibit 6).
Respondent also was a builder who operated as Holland Investment Company. It was his practice to purchase various properties, remodel existing structures on the same, and thereafter sell them at a profit. There was a two- room shed located on the Ragan property that had no inside finishing work,
electricity, or septic tank. Respondent decided to take an option on the property in order to remodel it by adding a room and to place it in a habitable condition. He broached the subject to Ragan on January 6, 1976, and Ragan told him on January 7, that he was agreeable to such a contract. On January 8, Respondent and Ragan and his wife entered into a Sales Contract and Option to Buy for $7,500. The contract provided that closing would take place within twelve months and that the seller would give possession of the property to the purchaser on January 8, 1976. This was pursuant to an accompanying rental agreement dated January 8, 1976, between the parties for a period of twelve months which provided that Respondent could exercise his option at any time within the stated twelve-month period whereby all rents paid would be applied toward the down payment on the property of $1,900 which was to be made at closing of the sale. The rental agreement further provided that if Respondent did not exercise his option within the required time, any improvements made by him on the property during that period would be considered liquidated damages of the owner. Pursuant to these agreements, Respondent made a payment of $100 at the time they were executed, which represented an initial deposit on the contracts and as rent for first month of the term. The Option Agreement also gave Respondent authority to remodel the building on the property and it further reflected that Respondent was a registered real estate salesman and would be selling the property for profit. (Testimony of Respondent, Duncklee, Petitioner's Exhibits 5, 7)
On January 5, 1976, Respondent showed Harold and Ruby Stacy several houses in the area that were for sale. On January 9, Respondent went by the Stacy residence to see if they were interested in any of the houses he had shown them. They were not interested in those houses and Respondent told them of property that he had recently acquired which was the Ragan property. He showed it to Mr. Stacy that night and the next day Mrs. Stacy went with him to look at the premises. During the course of their conversations, Respondent offered to rent the property to them for $100 for the period January 10 to February 1, 1976. It was his intention to rent it to them for $125 per month commencing in February on the condition that they clean and fix up the property. They also discussed the possibility of purchase at a later date. Respondent told them that he would sell to them for $13,000 if Harold Stacy would do the remodeling work on the shed with Respondent supplying the materials. Respondent quoted a possible sales price of $14,500 if he was obliged to provide both labor and materials for renovating the shed and providing for utility services.
Respondent and the Stacys entered into a rental agreement on that day for the initial period of some three weeks and Ruby Stacy gave him a check dated January
10 for $100 with a notation thereon that it was a deposit on land. Respondent explained to Mrs. Stacy that he was merely renting the property at that time and added the word "rent" at the bottom of the check. (Testimony of Respondent, Petitioner's Exhibit 1, 2)
Thereafter, the Stacys proceeded to clean the premises and commence installing a ceiling in the building located on the property. They also installed a septic tank. At some undisclosed date, Ragan came to the property to obtain some of his belongings and found the Stacys there. He learned that they supposedly had purchased the property from Respondent, Ragan was of the opinion that Respondent had purported to sell the property before he had obtained the option thereon and that he had therefore defrauded the Stacys. Ragan thereupon filed a complaint against Respondent with the local Board of Realtors in latter January, 1976. About the same time, Respondent had been in the process of obtaining local permits to install the septic tank and do the other work. He discovered that the Stacys had installed a septic tank without his authorization and without obtaining a permit. He thereupon, by letter of
January 21, 1976, informed the Stacys that they had done work on the property without a building permit or approval of the County Health Department and therefore was refunding the rental payment of $100. He enclosed his check in that amount, dated January 21, 1976. Although Respondent later attempted to exercise his option to purchase the property, Ragan refused to fulfill the agreement and later sold the property to the Stacys himself for $7,500. (Testimony of Respondent, R. Stacy, Ragan, Petitioner's Exhibits 3,4)
Mrs. Stacy testified at the hearing that she was under the impression that she and her husband had purchased the property in question on January 10, 1976, and that the $100 payment had been a deposit for such purchase. She was under the further impression that they were to make a $2,500 down payment in February to consummate the deal. She further testified that they made the improvements on the land because of their understanding that they were going to purchase it. Mrs. Stacy had never been involved in a prior purchase of real property and is unfamiliar with contract documents and terminology. It is found that Mrs. Stacy honestly believed that she and her husband had a valid agreement to purchase the property. Her testimony that she and her husband entered into the rental arrangement in January to enable them to work on the property until they could make the down payment in February is deemed credible. (Testimony of
R. Stacy)
Ragan and Respondent had been involved in a prior real estate transaction and Respondent testified that Ragan had not been satisfied with that transaction, but Ragan testified to the contrary. However, Ragan talked to Respondent's broker in January, 1976, about the Stacy situation, at which time Ragan stated that he had a chance to get even with Respondent for the prior transaction and that he was going to do so. (Testimony of Respondent, Ragan, Duncklee, D. Holland)
CONCLUSIONS OF LAW
Petitioner's Administrative Complaint alleges that Respondent has been guilty of "fraud, misrepresentation, dishonest dealing, trick, scheme or device and breach of trust in a business transaction" in violation of subsection 475.25(1)(a) , Florida Statutes. Although the complaint does not specifically state the manner in which Respondent committed any one or all of the alleged derelictions or against whom, the facts alleged therein as a basis for the charge recite that he informed the Stacys on January 7 that he had just acquired the property in question, and that he showed it to them on that date. If this had been true, it could be implied from the complaint that Respondent had misrepresented the fact that he had "acquired" the property because his option agreement with Ragan was not executed until January 8.
As heretofore found, the evidence does not support Petitioner's version of the events that transpired between Respondent and the Stacys. The evidence establishes that Respondent had an option to purchase the property at the time he showed it to the Stacys on January 9 and 10, and when he entered into the rental agreement with them on the latter date. There was nothing in the option contract that precluded subleasing the property, nor any evidence to establish that Respondent intentionally deceived the Stacys with respect to the situation. There was never any written agreement between the parties to sell and purchase the property. On the contrary, only a short-term rental agreement was entered into between the parties. It is true that that agreement which was drawn by Respondent reflected that he was the "owner" of the property, but he did have a contractual interest therein by virtue of the option agreement. Although Mrs. Stacy was of the view that she and her husband had a valid agreement to
purchase, such was obviously not the case. Ragan was well aware by the terms of the option agreement that Respondent had purchased the same with the intention to remodel the premises and resell at a profit. There is no indication whatsoever that Respondent practiced fraud against Ragan in any respect.
In view of the foregoing, it is concluded that Petitioner has failed to establish that Respondent violated subsection 475.25(1)(a), Florida Statutes.
That the Administrative complaint be dismissed.
DONE and ENTERED this 8th day of March, 1979, in Tallahassee, Florida.
THOMAS C. OLDHAM
Joseph A. Doherty, Esquire Florida Real Estate Commission Post Office Box 1900
Ed R. Miller, Esquire
