STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT ) OF PROFESSIONAL REGULATION, ) BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 80-881

) NORTH AMERICA REALITY, INC., ) and JORGE G. MENDOZA, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, H.E. Smithers, held a public hearing in the above- styled case on August 15, 1980 at Miami, Florida.

APPEARANCES

For Petitioner: John Huskins, Esquire

Department of Professional Regulation Legal Department

2009 Apalachee Parkway

Tallahassee, Florida 32301

For Respondent: Mr. Jorge G. Mendoza,

pro se and as a witness

c/o North America Realty, Inc.

3735 Southwest Eighth Street, Suite 205 Coral Cables, Florida 33134

This action arose from a complaint filed with the Petitioner by Kathleen Battah following her unsuccessful attempt to recover a $200 security deposit she had given Alfredo Colli, a real estate salesman with North American Realty, on August 1, 1977, when a one-year rental lease was signed. Upon investigation of the complaint, the Petitioner's investigator found that Colli `s license had expired on March 31, 1976 and since that time Colli had received commissions from North American for the sale of real estate. The issue is whether the Respondents should be penalized for failure to properly account for or return the security deposit, and for employing, and paying commissions to, a person (Colli) who was not a licensed real estate salesman.

In addition to the testimony of the Respondent's one witness noted above, the record consists of Petitioner's Exhibits 1 through 4 and the testimony of the complaining party, Ms. Battah, and Petitioner's investigator.

FINDINGS OF FACT

Count I

1. Respondents North American Realty, Inc. and Jorge G. Mendoza have since at least 1972 been licensed real estate brokers in Coral Gables, Florida. Until May 18, 1979, a salesman named Alfredo Colli was an associate. In July 1977, without Respondents' knowledge or approval, Colli advertised in the newspaper that North American Realty had a duplex for rent and included its telephone number. However, CalIi was handling the rental individually for the owner (Joseph Pelaez), who was a friend living in Puerto Rico; Colli had also assisted Pelaez in buying the duplex involved. The Complainant responded to the ad and on July 15, 1977, signed a Coral Gables Board of Realtors form lease for one year commencing August 1, 1977, at $325 a month, paying $200 security damage deposit.

   
   

2. According to the language typed in the blank space provided, Lessee was to make monthly checks "payable to E. Gonzales owner agent and to mail them to C/O North American Realty, Inc." The agreement also provided that repairs were to be paid by the Lessee and a brokers commission of $325.00 to be paid to North American. The lease was signed by Alfredo Colli (Agent) and Kathleen Battah, witnessed by Colli and another person. Payment for the first month's rent and the security deposit was made by check, however, the payee's name is unknown. The security deposit was forwarded by Colli to owner Pelaez but how the remaining monthly payments were handled, except one to Colli as his commission, is unknown.

   
   

3. During the discussion of the lease arrangement, Colli orally advised Ms. Battah that many repairs would be made and a new refrigerator would be provided, none of which was done. At the end of the lease, Ms. Battah's friend leased the duplex, without any repairs being made. Upon demand for a refund of the security deposit, Colli orally offered to return only $60 because many repairs were required to be made.

   
   

4. Although Mendoza admitted that he was somewhat aware of the lease situation and had failed to exercise the required supervision, neither of the Respondents were involved in the lease as they were not in the business of managing property.

   
   

5. Many of the problems in this case arose from Colli's many personal problems (lost a daughter, had a heart attack and was divorced).

   
   

   Count II

   
   

6. Respondents admitted that Colli did not hold a real estate salesman's license from March 31, 1976 to May 18, 1979. However, in mitigation Mendoza was completely surprised when informed of the fact by the board's investigator and immediately terminated Colli. Mendoza contended that he was not aware that he was required to check the status of a salesman's license and in Colli's case, did not feel a need to as Colli is an honorable person. Apparently Colli's failure to have a license was attributable to his many personal problems.

   
   

   Count III

   
   

7. Respondents also admitted that on two occasions between March 31, 1976 and May 18, 1979 North American paid commissions to Colli for his efforts in selling property. One of the commissions was the result of Colli selling his own residence involved in his divorce. The other sale involved a bankrupt business

   which resulted in a very small fee. Colli was not very active in his sales efforts due to his personal problems.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

   
   

9. Section 475.25(1), Florida Statutes (1979), provides in pertinent part:

   
   

   1. The Board . . . may suspend license may revoke a license, may impose an administrative fine . . ., or may issue a reprimand, if it finds that the

      licensee . . . has:

      1. Violated any provision of s. 475.42 . . .;

      2. Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing . . ., culpable negligence, or breach of trust . . .;

      (d) Failed to account or deliver to any person . . . upon demand of the person entitled to such accounting and delivery . . .;

      (h) Shared a commission with, or paid a fee or other compensation to, a person not properly licensed as a . . .

      salesman . . . .

      
      

      Section 475.42(1), Florida Statutes (1979) provides in pertinent part:

      
      

      (1) VIOLATIONS.--

      (c) No broker shall employ, or continue in employment, any person as a salesman who is not the holder of a valid and current license . . . .

      
      

10. Respondents have admitted to the technical infractions involving Colli's affiliation and to the lack of supervision regarding the Battah lease but assert Colli's personal problems in mitigation. On the one hand, Mendoza knew of Colli's personal problems and on the other, failed to recognize that more supervision of Colli's real estate sales activities was required during those trying times.

It is therefore, RECOMMENDED:

That the Petition of the Board of Real Estate be granted and that North American Realty, Inc. and Jorge G. Mendoza each be found guilty of the alleged violations and that each be fined the sum of $250.00, payable within 30 days of the Board's Order.

RECOMMENDED this 29th day of August, 1980, in Tallahassee, Florida.

HAROLD E. SMITHERS

Hearing Officer

Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301

904/488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of August, 1980.

COPIES FURNISHED:

John Huskins, Esquire

Department of Professional Regulation Legal Department

2009 Apalachee Parkway

Tallahassee, Florida 32301

Mr. Jorge G. Mendoza

c/o North America Realty, Inc. 3735 S.W. Eighth Street, Suite 205 Coral Gables, Florida 33134

Docket for Case No: 80-000881

Orders for Case No: 80-000881